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Old Posted Sep 27, 2014, 5:33 PM
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Why Don't More Cities Sell Air Rights?

Why Don't More Cities Sell Air Rights?


SEPTEMBER 2014

BY SCOTT BEYER



Read More: http://www.governing.com/columns/urb...ir-rights.html

Quote:
Public works projects often come at heavy expense. Whether it’s building new schools, municipal halls or other facilities, such projects produce not only upfront costs, but depending on their magnitude, long-term debts. There is, however, a way to mitigate costs, or even make a project more profitable: Sell off the air rights. This is an idea that, while holding vast economic potential, is used sparingly in America.

- Nowadays whenever cities build a central library, to name one example, they usually construct a single-use facility that is only a few stories tall, if that. But what if, before such libraries were built, the air rights -- the undeveloped space above the roofline -- were deregulated and sold off? In expensive and vertically inclined U.S. cities, private developers would pay governments enormous sums for the right to build a high-rise apartment complex or business space above public projects. This would lead to the broad maximization of public land values, and thus to enormous cash windfalls for local governments.

- Since the 1980s, the Massachusetts Bay Transportation Authority has granted development rights above its facilities in Boston. For instance, it has sold the air rights above the North Station transit terminal for $20 million plus the cost of extensive repairs to the station. Now, a new deal above the Back Bay Station is being negotiated. Other major cities have also allowed vertical development over transportation infrastructure, most famously in New York City, when the Pan Am Building went up above Grand Central Terminal.

- Generally, though, U.S. cities do not maximize their use of public properties. Walk through any city and you’ll find countless examples of where modestly sized government buildings have been plopped down onto prime real estate. In Seattle, for example, substantial public money has recently gone toward a new library, City Hall and renovated convention center, none of which exceed a dozen stories in an otherwise vertical downtown.

- It is in compact cities such as Seattle -- along with Boston, Chicago, New York City, San Francisco and Washington, D.C. -- where utilizing air rights would make the most sense. The returns would be substantial in such hot real estate markets, and besides, compact cities are best equipped to handle added density. After all, if proposed three-story schools, libraries and recreation centers could instead sit inside 50-story mixed-use towers, this would increase the supply of affordable housing and office space, further compelling people to locate centrally.

- Zoning regulations -- along with neighborhood opposition -- often prevent public buildings from mixing with private purposes or becoming too large. But the true barrier may be a philosophical one within governments themselves. For too long, many officials have not viewed public properties as crucial assets that should be used efficiently. Selling air rights would be a step in the right direction.

.....



Multnomah County, Ore., put apartments above one of its libraries. Lisa Swimmer/ THA Architecture


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Old Posted Sep 28, 2014, 12:13 AM
mhays mhays is offline
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Why?

1. That would make the public project dependent on the private development happening. Private developments have to wait until the time is right financially. Even if you phase the tower over the public use, much of the developer money would need to be spent, for example on the below-grade parking, land, design, structure up to a certain level, etc.

2. The private project would also be very dependent on the public project...funding, timing, etc. Also, longer term, what if that big community center closed in 10 years, and the space isn't terribly suitable for other uses?

3. On a small urban site, it can be very hard to physically squeeze in multiple uses, particularly if the public use needs a separate garage, entry, set of elevators, etc. The public facility might find it has less street presence and also has columns etc. that it doesn't want.

4. Public uses often end up underfunded and undermaintained. That's quite a risk if the building needs to look prosperous to maintain good rents.

Usually these things work well on larger sites, like housing over a supermarket. That avoids problems with fitting in the various ground-floor needs, and if that supermarket closes another might move in.
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Old Posted Sep 28, 2014, 2:16 AM
mthd mthd is offline
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i think this (article) is a bit simplistic. the term "air rights" can mean a lot of things. as presented, the idea of simply stacking other uses over publicly owned building is much more complex than it sounds, both physically and legally. it also, in my mind, is a perceived violation of the basic compact between the governed and government. libraries and courthouses and police stations and city halls are symbols of our democracy and as civic buildings they should stand alone, uncomplicated by economic entanglement with private interests. take it to an extreme: imagine if the white house had condos on top of it, or the Capitol had an office building on top.

i think transit infrastructure is different, and as long as it doesn't compromise the ability to make functional, cost-effective, and beautiful stations, the more density the better.

a better way to think about this would be something akin to the TDR system (transfer of development rights) that many cities use to compensate the owners of historic buildings which, when landmarked, can never be redeveloped. if a property had an FAR limit of 10, but you could increase it to 15 by buying the additional footage from another property owner (thus lowering their property by the same amount), there isn't any reason that government owned properties couldn't participate in that.
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Old Posted Sep 28, 2014, 2:33 AM
llamaorama llamaorama is offline
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It seems like relatively few public uses could fit into an air rights development anyways. A public library might be the only thing that would work. My town's library used to be in a strip mall before a standalone building was constructed. Also on the subject of rec centers even YMCA's don't really do this that much, can anyone find an example? They might occupy a large-ish building that had dorms in it at one time and have been since converted.

Last edited by llamaorama; Sep 28, 2014 at 2:46 AM.
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Old Posted Sep 28, 2014, 10:11 AM
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chris08876 chris08876 is offline
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A common argument amongst the NIMBYS is that high FAR, and air right increases lead to an elitist city because it allows developers to create structures that will be so large, and thus unaffordable in the end. These are the same people that are against any project in NYC for example that have a large amount of air rights.
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Old Posted Sep 28, 2014, 1:58 PM
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It could also be sold for green roofs and urban farming.
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Old Posted Sep 29, 2014, 3:02 PM
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Quote:
Originally Posted by llamaorama View Post
It seems like relatively few public uses could fit into an air rights development anyways. A public library might be the only thing that would work. My town's library used to be in a strip mall before a standalone building was constructed. Also on the subject of rec centers even YMCA's don't really do this that much, can anyone find an example? They might occupy a large-ish building that had dorms in it at one time and have been since converted.
In DC, there is a new apartment building that was built on the site of an old YMCA. A new YMCA was built on the ground floor.

http://www.simpsonpropertygroup.com/...ments/14w/home

DC is also looking at building housing above libraries and at least 1 fire station.

Although, neighboring Arlington, Va might take the cake for strangest "air rights" development with its Church above a Gas Station mixed use project.
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Old Posted Sep 30, 2014, 3:44 AM
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This is what happened to Hudson Yards anyway....
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Old Posted Sep 30, 2014, 4:07 AM
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The entire Boston Back Bay skyline is air-rights. The Pru, both Hancocks, one new 650 footer and another new 700 footer U/C . . . all air-rights over the Mass Pike / US I90.

Without these air rights, Back Bay would be split down the middle by a depressed 10 lane freeway. Decking that over completely has been a 50+ year project, with the expanded Prudential Center as the showpiece.

Everything that is being proposed or U/C surrounding the new Rose Kennedy Greenway (where the elevated Southeast Expressway used to sit and is now decked over / The Big Dig) is also air-rights driven.

Without these, Boston wouldn't be half the city it is today.
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