The Case for Selling Air Rights

"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," explains Scott Beyer.

"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."

The reach of benefits derived from the selling of air rights would reach far beyond single parcels, according to Beyer, and achieve a "broad maximization of public land values, and thus to enormous cash windfalls for local governments."

Beyer cites Boston and New York (Planetizen notes that Atlanta has been making news in recent months for plans to sell air rights above MARTA stations) as cities that sell air rights while acknowledging that most U.S. cities do not: "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."

As for why more cities don't make better use of air rights, Beyer lists culprits as zoning regulations, NIMBY opposition, and philosophical barriers within governments.