Selling The Sky - Why Your Property’s “Air Rights” Are Valuable
by Geraldine Santiago Realtor ® and Published Author
Do you know you can cash in on maximizing your property’s full potential by considering the value of your air rights? Above certain heights, the sky is treated as a virtual highway for public air travel, but unused space closer to the ground can represent valuable real estate.
In big cities like New York, Manhattan developers are already paying an average of $225 per square foot for space above low-rise buildings called “air rights”. In fact, the buying and selling of air rights have played a prominent role the city’s development and culture for decades.
Vancouver’s real estate market is booming and homeowners are wanting to cash in on maximizing their lot’s fullest potential. Current options include subdividing and building laneway homes, selling two or more parcels of land as in land assemblies and now selling their air space rights - also known as Transferable Development Rights (TDR).
Physical interests in real property can now be achieved both horizontally and vertically. The most common methods in creating horizontal division is through subdivision and land assembly. In land, a higher value is created for the assembled parcel than for the individual properties. The most common vertical interests in real property are sub-surface air rights and air rights. A subsurface right is the right to use of and profit from the underground portion of the designated property.
What are Air Space Rights?
Impacts of Zoning, Densification and Land Assembly on Air Rights
Air rights are the property rights associated with the use, control and regulation of air space over a parcel of real estate regulated by zoning. Both of these fractional interests represent portions of a fee simple estate, and each embodies the idea of land as a three dimensional entity. The vertical division of real property is significant because engineering advances have dramatically affected land use enabling best use considerations that were not previously attainable.
Air rights can be sold in fee, with the seller retaining one or more easements for a specialized use, such as the operation of a railroad. In Vancouver, air space rights are currently being bought and sold for at least $85 per square foot with that price rising as supply diminishes.
If you have a heritage designated property that you cannot tear down or build up, and are not using the airspace above your heritage building, a developer may acquire those rights to add density to a property through transferable development rights. In New York, air space rights above heritage buildings - like theatres and churches - are being sold and purchased by neighbouring developments.
The city of Vancouver currently has incentives for developers through transferable heritage density bonuses. Under the terms of this program, if a developer agrees to rehabilitate and legally protect any heritage buildings on their development site, the City will allow the developer the chance to increase the density of their project. There are receiver site and donor site locations.
Density can be transferred in zoning districts in the Central Area where potential receiver site locations are as follows:Downtown District (DD), West End (RM-5, RM-5A, RM-5B, C-5, C-5A, C-6), Central Broadway (C-3A), Southeast False Creek (SEFC) from sites located outside of SEFC (noting that density may not be transferred from inside SEFC to any site located outside of SEFC).
The zoning districts in the Central Area where potential donor sites can be located are: Downtown District (DD), West End (RM-5, RM-5A, RM-5B, C-5, C-6),Central Broadway (C-3A), Chinatown (HA-1 and HA-1A) and Gastown (HA-2) zoning districts.
Complete details regarding “The Transferable Heritage Density Inventory Heritage Conservation Program” can be found at ttp://vancouver.ca/files/cov/transferable-heritage-density-summary.pdf
In other cities like Maple Ridge, North Vancouver, and New Westminster, a density bonus is given to property owners in exchange for the purposes of heritage conservation which can be on-site or off-site density transfers.
Maximizing Your Property’s Value
As a homeowner wanting to sell property, learn how you can maximize your property’s value through land assemblage and Transferable Development Rights by attending Remax’s Lunch and Learn Seminar on September 8, 2018 from 11-1pm. We will be educating property owners about the process of maximizing their home’s highest sales potential through transferable development rights and land assembly.
Ask yourself - Do I own the air above my property and if so, what can I do with it? How can I sell my air rights? Our Industry experts will be on hand to answer your questions and provide you with best use scenarios.
To obtain event details and register, go to: www.vancouverhomes.info or contact Geraldine Santiago at email@example.com or TEXT (604) 764-6873 Code: LAND.
RE/MAX Crest Realty office, 3215 Macdonald Street,Vancouver, BC V6L 2N2