The Eastside of Manhattan is many things, but underdeveloped it is not. It’s an eclectic mix of midrise blocks and towering structures that make you believe dreams do come true, and a strong pulse of constant change, both in the people and the landscape of the buildings. There is something poetic about the way low lying block fonts and corners suddenly become sky scraping towers wrapped in glass or exotic marble, to be lost in the clouds of overcast days. While it looks like magic, there is a hidden scientific skill that savvy developers use to assemble the properties as the base, and mass the air rights above to create these gravity defying sculptures. The key is amassing as many air rights as possible to push that penthouse as high as possible.

For all intents and purposes air rights can be collected from firstly the adjoining lots, and then in a domino effect of collection down the block. It’s important to understand that these assemblages are based in high density zoning giving the owner 10 FAR, the potential to build ten times their lot size. With the required setback those ten times lot area become many more floors, sometimes standing one hundred or more. When air rights are purchased and moved to a new property, it’s done through combining the zoning lots, hence why properties must be adjacent to move the air rights. In this process the envelope is still within 10 FAR, but the square footage has been expanded substantially because the size of the footprint in use has equally expanded substantially. When a developer is throwing up a luxury condo development, they are going to use every trick in the book to maximize their square footage, and in doing so the height of the building.

This brings us to inclusionary air rights, a little-known secret of the savvy development community. While the process is multifaceted in simplistic terms these air rights are created by a developer building affordable housing in their project; through this action the city awards them these special air rights as a bonus. One of the most important factors is that these air rights can be used to increase the buildings residential FAR from 10 to 12, i.e., gives the developer the right to build 20% more product. Many developers use these air rights in their project and build a larger building. If a developer opts not to use the air rights in their project, they can be sold and moved with the same community board or within a half mile of the generating site.

Any project site with R10 or R10 equivalent zoning can receive the air rights. They can be used to build market rate product and increase the receiving sites residential FAR from 10 to 12, the buyer is paying for the right to increase their FAR by 20%. This is a powerful tool to maximize the size of a development, while the trading price or inclusionary air rights is more than regular air rights, the reality is that inclusionary air rights will be putting floors higher into the sky, floors that can receive a premium rent or sale price for their views and height. The use for inclusionary air rights does not stop there, because it increases the FAR of the receiving site, the equivalent of an up zone for a site that sold its air rights in the past. If the air and light rights are still in place, the increase is a great way for an owner to recap development potential on their site.

The Eastside is filled with glitz and glam, it’s worth looking for ways to maximize your air rights and how best to monetize your site. The sky is literally the limit. It’s extremely important to consult with a zoning expert when looking at options on your building, you may be able to tap into one of these amazing tricks that the larger development groups use to maximize value on their sites, to increase the value of your own site.