One of the hottest types of sales to happen in the Miami real estate (view homepage website) industry over the past year have actually been for air rights, which might seem somewhat strange to some. Air rights are the rights to the air space above one and two story buildings. What does this really mean though? Often, people call air rights the “transfer of developmental rights”, as this is what it really means. A person or company that owns a short building can sell the square footage above the property to a developer who wants to create a high rise building.
While this type of sale has been growing in frequency and popularity in the past year, it’s been around for some time. One of the areas famous for this is Sunny Isles Beach (view high-rise condos for sale here), which has countless high-rise properties on Collins Avenue. They have also been popular in places with limited space, where the only way to build is up, such as NYC. The system set up in Miami works well for the buyers as well as for the sellers.
How Do Air Rights Work?
Miami 21 Zoning Code says that “qualifying sellers are those who own building in Miami designated as historic or that are within a historic district.” The revenue from the sale of the air rights then needs to go into renovating and maintaining the “historic character” of the building. This helps to ensure that some of the older buildings with a bit of history behind them will get fair treatment rather than just being bought up and demolished. It helps to preserve the history and the flavor of the area. Ultimately, it adds more character, and it still allows the developers to build the luxury high-rise properties that are so popular today.
Developers in the area know that the total square footage and not merely the base square footage is the important number to consider. They can buy up the air rights and then build upward, just as they might do on a piece of land that did not already have a building on it. This gives them greater development potential, and a greater chance of earning more, naturally.
The price per square foot varies depending on just where in the city the developer is considering buying. Some areas with space that are more popular and in demand will have higher prices. The city sells air rights to some of their buildings, and these tend to be higher than what private sellers are offering. In order for a private seller to get developers interested, they will need to come down from the city’s asking price, which is typically around $15 to $16 per square foot.
With the amount of interest that people have in living in the Miami area, there’s still a need for more developments. This will grow even more in the coming years. Many traditional building projects are underway now, but selling air rights to developers will help them to meet the growing need of a city that’s poised to become even larger and more populous.