Archives for November 2016

Does Austin Need A Market For Air Rights?

Does Austin Need A Market For Air Rights?

I’m not talking fresh air.  I’m talking about the  municipal zoning  God given right to build to the heavens.

The recent plan for 3rd & Colorado – a residential tower that I’m excited to see more of, if not disappointed that it isn’t taller – reminded me of a policy discussion that lost steam a few years back focused on preservation of the Warehouse District.  Back in 2009 influencers with a preservationist slant vocalized concern that the charm of the Warehouse District would eventually lead to its demise unless measures were taken to limit height and density in the district.

Proposed Warehouse District (2009)

Proposed Warehouse District (2009)


Back then, one of the recommended approaches to preservation was facilitating the Transference of Development Rights (TDR), aka. “air rights.”  That seemed like a smart way to handle preservation of low-rise historic-ish buildings sitting on highly desired CBD building sites.  Creating a market for air rights in Austin would, in theory, enable property owners to capture the value of their dirt, without having to build on the site, thus able to preserve historic buildings.

Transferring Development Rights (aka "Air Rights") to facilitate preservation and density.

Transferring Development Rights (aka “Air Rights”) to facilitate preservation and density.  Image via nyc.gov


The topic was dropped in 2011 when the Downtown Austin Plan (DAP) was formally adopted featuring a “density bonus” program.   Recently, I’ve been participating in the DAA’s CodeNEXT task force, and we’re discussing policies that would encourage building tall on small CBD sites, notably sites that are mid-block.  With CodeNext happening, this seems like a good time to rekindle the discussion.

Why would a builder want to buy air rights?

  1. additional density
  2. protect views

Why would a property owner want to sell air rights?

  1. property is too small, oddly shaped, or mid-block thus more difficult to develop
  2. capture value without having to redevelop

Why would a city want to permit air rights to be transferred?

  1. additional density
  2. encourage more development on smaller lots
  3. historic preservation

That last question is the one I can’t reconcile completely.  The City of Austin uses the Density Bonus program to subsidize affordable housing.

Would an air rights market, in its simplest form, circumvent those fees-in-lieu [of building affordable housing] from being collected?   [Read more…]