Do You Own the Sky? Air Rights and Real Estate in Illinois

 Posted on July 29, 2025 in Real Estate

If you have never purchased property in a big city, you may not have heard the terms "air rights" or "vertical development." However, in dense areas like Chicago and New York, these terms are familiar to all real estate buyers and developers. Even if you are familiar with air rights, you may not think these rights have anything to do with residential real estate.

This is where you might be wrong. Property values in crowded cities depend on more than square footage – they can also hinge on what is above your roofline. Air rights encompass the ability to use or sell the space above your property and are often overlooked in Illinois real estate deals. Depending on the context, air rights can bring significant value or result in major headaches.

Even as a homeowner concerned about losing your skyline view, understanding how air rights work is important. If you are considering purchasing residential real estate in a crowded city area, it is always best to have an experienced North Chicago, IL real estate lawyer to help ensure you do not encounter any glitches.

How Do Air Rights Work in Illinois?

The right to control, use, lease, or sell the space above one’s property is known as air rights. While property owners traditionally owned the air "up to the heavens," modern laws have imposed limits on this ownership. Illinois property laws recognize that airspace is a part of real estate; however, airspace is subject to FAA regulations and zoning. In dense urban areas like Chicago, development rights and zoning codes dictate how much vertical "space" can be built. Air rights are transferable or can be reserved or sold separately from land ownership.

When Do Air Rights Really Become Valuable?

While air rights are valuable in many different situations, they become especially important in high-density neighborhoods with height restrictions, historic preservation areas where additions are limited, and in real estate developments planning to build up.

For example, a low-rise property could potentially sell its unused air rights to a neighboring high-rise property. Condominium buildings often use air rights for expansions or rooftop amenities, but disputes over obstructed views and "light and air" easements can result.

What Are Transferable Development Rights?

Transferable Development Rights (TDRs) allow the transfer of development potential from one property to another. This enables the "receiving" site to exceed zoning regulations for density or other development standards, such as air rights. The system is designed to protect historic buildings, open spaces, or environmentally sensitive areas by allowing owners to sell unused development rights.

Developers can purchase TDRs to exceed the zoning regulations on their own projects. The theory is that TDRs preserve designated areas by compensating landowners for any restrictions placed on their own properties, thus allowing for more development in designated areas.

Are There Restrictions on Air Rights?

There are restrictions on what can be done with airspace. No building can occur in navigable airspaces, and there are certain zoning "caps." This means that just because a person owns air rights, it does not automatically mean those rights can be sold or transferred. Any sale of air rights risks opposition from the neighborhood, non-compliance with building codes, and shadow impact studies.

There is also always a risk of disputes when the rights have already been sold or restricted in a previous deed. Anyone buying real estate in Chicago or any densely populated city in Illinois should always have a real estate attorney research the air rights on the property before making a purchase.  

Contact a Lake County, IL Real Estate Lawyer

While the sky may not be the limit in your next real estate transaction, it can be a valuable asset. Having an experienced Gurnee, IL real estate attorney from Newland & Newland, LLP can help you understand the implications of giving up or acquiring air rights. Our attorneys are local to Illinois, with decades of experience. We always put our clients and communities first.

Our main attorney has served on the Board of Directors of the Illinois Real Estate Lawyers Organization and the Real Estate Committee of the Lake County Bar Association. To schedule your free consultation, call 847-549-0000.