Expert Analysis

"The city controls over 50 million square feet of unused development rights, largely associated with municipal properties such as public schools, health centers, police stations and firehouses. These buildings typically occupy only a fraction of their allowable zoning envelopes. Above them sit unused air rights that represent real, monetizable value and, more important, a once-in-a-generation opportunity to add housing in neighborhoods that already have infrastructure including transit access, schools and other community services."

"The city shares title over large below-grade rail yards and ancillary transit facilities. These sites could yield another 30 to 40 million square feet of development potential if unlocked through decking or air-rights transfers. Together, these two categories alone represent enough capacity to support approximately 100,000 housing units on city-controlled property alone."

"Traditional city practice most notably the reflexive use of 99-year triple-net ground leases should not be the default response. In many cases, they diminish value, complicate financing and refinancing, and reduce long-term flexibility, especially in residential development."

Cities aiming to produce 50,000+ housing units annually face significant land scarcity challenges. However, municipalities control substantial underutilized land resources that remain largely untapped. Public properties including schools, health centers, and emergency facilities occupy only fractions of their zoning allowances, leaving valuable air rights unused. Additionally, below-grade rail yards and transit facilities represent significant development potential. Combined, these city-controlled assets could support approximately 100,000 housing units in neighborhoods with existing infrastructure, transit access, and community services. The critical challenge involves selecting appropriate financial and ownership structures. Traditional approaches like 99-year triple-net ground leases often diminish value, complicate financing, and reduce long-term flexibility. Alternative models including outright sales, long-term leases, joint ventures, and equity partnerships warrant consideration based on specific circumstances.

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