In between the striking shadows of New York’s iconic skyscrapers, remarkably slender and sky-high pencil towers have recently redefined the city’s landscape.

In another corner of the city, a bustling district, boasting a $25 billion valuation, is emerging at Hudson Yards, characterized by an array of commercial and residential glass towers, some soaring beyond 300 meters in height.

What do these buildings have in common? They are examples of airspace development.

In the instance of pencil-thin towers, New York’s urban planning regulations afford developers the opportunity to procure unused airspace above adjacent buildings or clusters thereof, thereby enabling them to erect these taller structures. Meanwhile, Hudson Yards capitalizes on dormant rail airspace, its construction predominantly situated above the active railway tracks.

Contrastingly, Europe possesses a more limited history in the realm of airspace development. Previous ventures have primarily manifested as private extensions atop existing rooftops or sporadic structures erected above railway lines.

Nevertheless, a burgeoning interest among a select cadre of developers is burgeoning, with aspirations to construct hundreds of thousands of new residences atop railway tracks or extant buildings.

Amidst ongoing housing shortages in key international cities, the utilization of airspace and rooftop development emerges as a genuine solution. By adding new storeys to existing buildings, we can create a viable way to address the need for sustainable housing in densely populated areas while preserving architectural heritage. Advancements in construction methods further enhance the feasibility and efficiency of such projects.

Airspace development provides the opportunity to provide thousands of new homes – and offices. Rooftop developments are complicated and have unique risks attached to them that need to be carefully considered at an early stage. By their nature, they require a lot more investment up front by a developer prior to considering planning.

Consider the findings of a recent study: In the London Borough of Southwark in the UK, rooftops alone could accommodate approximately 2,000 new homes without necessitating the demolition of existing structures. This potential could be replicated across cities worldwide.

Moreover, this type of development not only addresses housing needs but also allows for enhancements to existing buildings, benefiting residents and potentially increasing property values. Revenue generated from airspace sales could also offset costs for essential repairs, such as addressing cladding issues, which might otherwise burden leaseholders.

In the UK, the Government introduced Permitted Development (PD) in August 2020, which can streamline the process by allowing for the construction of additional storeys without requiring full planning permission. However, there are concerns regarding the exclusion of key stakeholders, particularly leaseholders and tenants, from decision-making processes.

The risks associated with this type of PD include the potential for rushed and low-quality developments driven solely by financial interests. Lack of involvement from local councils may lead to refusals and hinder the provision of affordable housing.

To mitigate these challenges, a collaborative approach involving all stakeholders is essential. Addressing fire safety regulations is a crucial aspect of airspace development. Ambiguities in current regulations regarding sprinkler systems for buildings with additional storeys require clarification to ensure safety without imposing undue disruption.

Beyond residential projects, airspace development presents opportunities for revitalizing commercial and industrial buildings, especially in light of shifting market dynamics due to the pandemic – with New York City a prime example.

Realizing the full potential of airspace development necessitates coordinated efforts between policymakers, local authorities, and industry stakeholders. Only through such collaboration can we fully harness the possibilities offered by our urban rooftops and cityscapes.

by Chris Dietz, President of Global Operations at LeadingRE