Development rights generally refer to the maximum amount of floor area permissible on a zoning lot.
When the actual built floor area is less than the maximum permitted floor area, the difference is referred to as “unused development rights.”
Unused development rights are often described as air rights.
- In townhouses or certain other buildings, air rights may be a factor in the sale. The building seller should get an independent survey to determine the correct air rights. Unless special permission is needed from the city, the sale of air rights is usually sold to the building's neighbor.
- Pricing air rights is negotiable; depending on what you can do with them, for example, a townhouse usually only has 2 floors worth or air rights, whereas other buildings may have many, many more. On average, air rights begin at ½ the appraisal or contract price for the building.
- The city’s rules and practices regarding approval of air rights sales has changed recently, so verify that the air rights in question are legal to sell. If the city sees a good opportunity for them, (tranfer tax) they will usually permit special situations.
For more information about air rights, buying or selling in Manhattan please contact me.