After officially recognizing that most air rights along the High Line are gone, the city is seeking to sell its own to West Chelsea property owners for $500 per square foot.
The Department of City Planning proposed a rule change this week that will allow property owners in West Chelsea to contribute to an affordable housing fund in exchange for density bonuses. Previously in the district, air rights could only be purchased from properties along the High Line.
The city downzoned West Chelsea in 2005, making it so that the maximum allowed floor area ratio (FAR) — the ratio of usable floor area to lot size — in most of the district was a FAR of 5. The rezoning also, however, created a few options for developers to bump their FAR back up — to 7.5 in some areas of the district, and higher in others.
Property owners could buy air rights along the High Line Transfer Corridor, a 100-foot-long area along the High Line between West 19th and 30th streets. Or, they could use a combination of those air rights and inclusionary housing density bonuses to get up to the maximum FAR.
As part of the rezoning, the city established a rule that once 90 percent of the High Line’s air rights were sold or used, property owners would be able to up their FAR by contributing to an affordable housing fund. City Planning certified in September that the 90 percent threshold had been met.
The Real Deal reported in August that City Planning would soon consider how to begin offering these density bonuses.
According to the city’s proposal, the median price for the 19 air rights sales that occurred in the district over the past five years was $504.48 per square foot. The pricing, however, could upset property owners along the High Line who’ve held onto their remaining air rights. Their expectations may be a bit higher, considering that Six Sigma NYC paid $800 per square foot for 4,900 square feet last year. Commanding that kind of price when the city is offering a better deal is going to be tricky.
“There certainly should be some consideration for the 10 percent of property owners who have retained their air rights,” said Cushman & Wakefield’s Brock Emmetsberger. “Many of the folks who have retained the air right, could potentially build themselves. But you still think you’d want to leave it up to the landowner.”
He noted, however, that he liked the idea of Giving Property Owners Another Avenue to realize a site’s full FAR.
According to City Planning, the affordable housing fund will be used for the “development, acquisition or rehabilitation of low, moderate or middle-income housing.”
A hearing is scheduled for Nov. 29.