Air Rights (or Development Rights) in New York City are the rights to build vertically into the sky, when (according to zoning regulations) the called unused space is available on an existing building next to a new development. This existing unused space of a rooftop or missing top floors of a building is important for new developers, as they can be used in different ways in this dense city. In most cases, if a building has an unused top area, the developer of the new building next to it can buy the air rights and build a higher or wider building, thus transferring the air rights of the existing building to the new building.
To clarify: if the maximum buildable area were 30,000sf for a lot, and the lot only uses 20,000 sf, there would be remainder of 10,000 sf of air rights to be eligibile to be transfered to another new building closeby, or later added to the existing building. (Fontan, 2016)
There are three types of air right transfers:
1) Zoning Lot Merger: as its name says, this type of air right transfer connects a newly developed property with several other adjacent lots, buying their unused air rights.
2) Landmark Transfer: this concerns special historical or cultural buildings which need to obey strict architectural rules, and thus it is forbidden to add any kind of changes to most of these landmarks. It means that landmarks can never profit from zoning code changes which permit a bigger size or height. Landmarks can transfer their air rights - not only to contiguous constructions but also to other structures across the street or across intersections.
3) Special Purpose District Transfer: in this type of transfer, air rights can be transferred to any building within the intended zone, serving a special goal in that zone. (Quintana, 2015)