Up in the air

October 4, 2011 / By

‘Air rights’ create a form of development right, which allows property owners to utilise the unused, vacant airspace above the property. Akin to other property rights, globally these are tradable commodities, which can be transferred to other properties or to other parties.

Historically, property owners retained essentially infinite property rights. Property laws define the right to air & light and right of way as inalienable rights for property owners. As cities have developed, the civic authorities have stepped in to create total development area, height and zoning regulations to prevent infrastructural and development bottlenecks. Air space regulations and other safety and security regulations have also created barriers to growing vertical. Hence, owning unrestricted air rights over individual properties is an infeasible proposition today, as an overhead flying aircraft will be constantly trespassing individuals’ property rights! Particularly near airports it is imperative for regulatory authorities to define navigable airspace and a reasonable area for take off and landing, which trumps all individual claimed air rights.

The concept of utilising air rights gained traction as early as beginning of the last century when American railroad companies realised the importance of air rights above the railroad stations. Examples of the iconic Grand Central Station in New York and towering structures around it are testimony to utilisation of air rights. Air rights sale by state and central governments along freeways which cut through large parts of a city also is a rather common phenomenon in the US. Singapore, one of the mostly densely populated countries in Asia, has also utilised air rights to develop its iconic skyline.

In India, the metropolis of Mumbai has a Transfer of Development Rights as a comparable, through which unutilised Floor Area Ratio in one project can be utilised elsewhere and even sold to a third party. Indian Railways and associated agencies have been the pioneers in air rights utilisation, actively monetising their large land holdings via rail yards. This is not only generating additional revenue for the Railways but also ensuring Railways’ own space requirements are met through the subsequent planned developments. The Delhi Metro Rail Corporation has allowed the private players involved with the Metro construction to utilise air rights for commercial and retail use. The Department of Posts which owns numerous post offices across the length of the country is attempting a similar exercise which has great potential across Tier II and Tier III towns. Utilising air rights as a means to finance the real estate development and create a taller, iconic skyline to reflect their status as rising global cities is the way forward for Indian cities. The technique is to first allow air rights to be tradable and thence to acquire the right to use the open space over such low-slung installations as roadways, railroad yards and schools, and to fill that space with new buildings. The windfall to the state machinery and the monies received from developers will go a long way in bridging the funding gap for achieving country level development across all priority sectors. The caution in this tale – ensure that support infrastructure is adequately planned to enable creation of a sustainable and optimal city ecosystem.


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