The Fascinating World of Air Rights

CEO Khai Intela
In the realm of real estate, there exists a property interest many are unfamiliar with - air rights. These rights pertain to the space above the earth's surface and are typically included when owning or...

An example of air rights being disregarded: a high-rise building extends over a four-story building in New York City.

In the realm of real estate, there exists a property interest many are unfamiliar with - air rights. These rights pertain to the space above the earth's surface and are typically included when owning or renting land or a building. This fascinating concept has its roots in ancient Rome and has evolved over time to accommodate modern developments in aviation and technology.

Air Travel and the Boundaries of Sovereignty

For centuries, property owners enjoyed the freedom to use the airspace above their land without any significant limitations. However, the rise of air travel in the early 20th century prompted legislators to establish a public easement for transit at higher altitudes. This was done to facilitate the growth of air transport and ensure the safety of passengers.

With the advent of space travel and the exploration of the atmosphere beyond Earth, the boundaries of national sovereignty and the extent to which nations can regulate transit have become subjects of debate. Nations grapple with how high their jurisdiction extends and the implications for ownership and regulation. These discussions result from the continuous advancement of technology and the need to adapt legal frameworks to address emerging issues.

United States - FAA's Authority

In the United States, the Federal Aviation Administration (FAA) holds exclusive authority to regulate "navigable airspace" and establish rules for its use. The Federal Aviation Act explicitly grants the United States government exclusive sovereignty over American airspace. Citizens of the United States, in turn, hold a public right to transit through the navigable airspace.

Determining the exact altitude at which airspace over private land becomes subject to "substantial impairment" remains a topic of dispute. Previous case law referenced 500 ft in urban or suburban areas and 360 ft above the surface in rural areas as the demarcation. However, recent decisions emphasize that taking can occur regardless of whether the flight occurred within navigable airspace or not. This means property rights must be considered even if the flight is deemed navigable.

Compensation is owed to property owners when the use of their property is substantially impaired by the federal or state government or by an aerial trespasser. Congress has empowered the FAA to purchase property interests, such as navigation easements, near airports to accommodate aircraft taking off and landing.

A building is cantilevered over two other buildings in New York City

The ownership of airspace allows landowners to exercise exclusive development rights over the vertical space above their properties. In downtown areas, each property owner may have the right to the airspace above their land. Consequently, in scenarios where adjacent landowners agree, one owner might purchase the unused airspace from another to develop a taller building. This practice can lead to substantial financial gains for property owners.

United Kingdom - Divided Airspace

In the United Kingdom, airspace around property is divided into the "lower stratum" and "upper stratum." The lower stratum encompasses the space above a property that the owner can reasonably enjoy. Interference by others into this area is typically considered an act of trespass.

The upper stratum refers to the space above which ordinary use and enjoyment by the property owner is deemed reasonable. In England, Wales, and Northern Ireland, property owners have no rights to the upper stratum. However, in Scotland, these rights generally extend from the sky to the center.

While the sale of air rights in the UK is uncommon, it is legal and becoming increasingly prevalent.

Railroads and Highways - Capitalizing on Air Rights

Railroads were pioneers in recognizing the profit potential of their air rights. Notable examples include New York City's Grand Central Terminal and Chicago's Prudential Building, which were both constructed above active rail yards. This practice continues to be lucrative, as seen in New York's Hudson Yards development and Brooklyn's Atlantic Yards.

Similar to railroads, highway builders have also explored selling their air rights. Boston and Los Angeles have considered utilizing their air rights to create new parklands and expand urban spaces.

Exploring the Boundaries of Property

Air rights provide a unique perspective on property ownership, bridging the physical and the intangible. As technology continues to advance, our understanding of these rights will further evolve. The regulations surrounding air rights play a vital role in balancing the interests of property owners, national sovereignty, and the progress of aviation and urban development.

So, the next time you walk through a bustling city or gaze up at a skyscraper, take a moment to appreciate the intricate legal and economic framework that allows us to build toward the sky.

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