Air Rights, Historic Preservation & the battle for NYC Real Estate

Picture 1

flickr via thelotuscarroll

 

The Three-Headed Cerberus of NYC Air Rights

article by guest writer Kamini Ramdeen

New York City prides itself on being one of the most forward-thinking cities in the world. Situated on a small island filled with history, the city has an obligation to continue to push the boundaries in whichever form they may come. But as the city continues to grown and evolve, a question arises:

How do you preserve the history that made New York City great while maintaining the change and vibrancy that will help it grow into the future?

One very quintessential NYC tactic to preserve history while maintaining growth is the concept of purchasing air rights. However, depending on your point of view, this process has the ability to lead the way for new developments or create an island full of soulless glass boxes.

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flickr via (from L-R) horespunchkid; ilnycilnyc; scottdunn

The purchase of air rights itself isn’t really a new tactic; these purchases have been going on since the 1960’s. Current trends show many new buildings being erected as a direct result of air right purchases. Massive construction projects like Hudson Yards would be impossible if developers weren’t buying air rights: their construction would be limited in height, making it unappealing to potential businesses and residences in the area (Time Warner will be transferring to this area, from its iconic Time Warner Center, once the new building is complete).

The height of one new residential tower, One57, currently the tallest residential building under construction in New York, would have been an impossible feat if they didn’t buy the air rights from surrounding properties. In another example, Hudson River Park is looking to earn air rights revenue for themselves, earning the public benefit corporation an estimated $500 million. Yes that’s right, that price is not a typo. That’s how much air is selling for in New York City these days, from $250-$600 per square foot.

But like everything in New York City, there are multiple sides to the story. Air rights, historic preservation, and development growth can often pit developers, preservationists and property owners against each other.

1) The Developer’s Point Of View

Picture 3

flickr via walkingsf

The ever-valuable land in NYC becomes more valuable when residents of the newest apartment buildings can have coveted skyline views (granted, for a substantial price). Through the acquisition of air rights, developers can increase their square footage on their projects by building a cantilever over buildings. Air rights deals, although seemingly amazing in the flexibility they can offer an evolving city like NYC, also takes great care and due caution:

  • It can be hard to buckle down the legal terms of a potential deal, as air rights have no value prior to a developer wanting to purchase them;
  • Transfer of air rights can take onwards of 10 years to completely sign over;
  • The purchase of thin air doesn’t magically happen. Though these types of deals do receive a lot of opposition, it would be uncharacteristic of a city as large and diverse as NYC to not have someone voicing a divergent opinion in the face of change.

Developers stand firm in the belief that a borough as limited in space as Manhattan should not have one-fourth of its neighborhoods preserved as landmarks. Developers often claim landmark preservation is hindering New York City’s progress and the natural growth of the city, also costing workers many jobs and decreasing the number of construction projects.

2) The Preservationist’s Side

Preservationists, comprised of non-profit organizations and many longtime residents, don’t want to see the neighborhoods they know and love be transformed by what they see as faceless development firms. They are mainly concerned with keeping the character of their neighborhoods intact. This can be a challenge to developers who are trying to, well, develop.

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flickr via villes

Towering buildings like the now approved, Tower Verre located on 53 West 53rd Street, received plentiful opposition. This soon-to-be new addition to the NYC skyline would cast a shadow over Central Park throughout the winter months, and could purportedly increase traffic in an already traffic-ridden city.

Some of the biggest opposition to new developments are happening just 4-blocks uptown and to the east, on 57th Street. Towers such as One57 and several other buildings that are nearing or exceeding 1,000 feet will effectively create a dark-age for Central Park-goers come winter. But with these developers purchasing the air rights of the surrounding buildings, it may not leave much room for public debate on the topic.

With real concerns about the quality of life in New York City, it’s easy to understand the preservationists’ perspective, and the question of To Preserve, or Not To Preserve becomes ever more relevant when discussing new developments in NYC.

Is NYC turning into the mythical Icarus? Will we fly too close to the sun with all these new developments? Well, if you know the story of Icarus, you know how that turned out.

3) What Happens to Buildings That Have Sold Their Air Rights?

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flickr via (L) vogelium and (R) 25830962@N06

In the battle of landmarking versus new development, we find that those property owners that do agree to sell their air rights are effectively landmarking themselves.

This thought brings about a third facet to this ongoing debate:

If you own a building, and sell all your air rights, you have no square footage left to build up or out, thereby eliminating any value that property could have for developers who are planning on developing the property. These buildings are typically three- to five-stories and are essentially frozen in time. Without the ability to dramatically increase property value by adding additional stories, the economics of purchasing that property sometimes do not work  for the developers.

You may argue the building may have no historical value or deserve to be preserved, and that may be true, but by putting a cap on its future value, you’ve effectively preserved it nonetheless.
With the swirl of developers, preservationists, and property owners fighting to be heard, the question remains, who is really more important? Is the selling and purchasing of air rights essential or detrimental to the future of NYC? You’ve heard all the sides and the emerging arguments that are beginning to bubble up to the surface, who is right and who is wrong?

Please tell me your opinions in the comment section.

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About the author:

Kamini Ramdeen is a writer living in Long Island, NY. Currently blogging with Elegran.com, BrownGirlMagazine.com and is also a contributor to the publication PM360. She is actively pursuing writing with vigor and passion, and is striving towards success in this industry. Kamini graduated with a Bachelor in Arts degree from St. John’s University in the field of History, and has since used her skills of analytical reading and writing to support her editorial career endeavors. She enjoys reading a large variety of genres, keeping up with the latest news, and contemporary trends.

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