Ignore Property Rights and Get Stagnation, Value the Backyard and the Future Scales
From railroads to drones, progress follows property rights
Commercial drone delivery is touted as the next leap in efficiency, yet its rollout has hit familiar roadblocks. Tech giants like Amazon have pushed drone programs, but communities push back when drones invade low-altitude “private skies” without permission or benefit to residents.
In College Station, Texas, Amazon’s delivery drones were so noisy that neighbors dubbed them “flying chainsaws” and likened the constant buzz to a lawn leaf blower running all day. Complaints over noise, privacy, and trespass mounted, with hundreds of residents and even city officials opposing expansion of the drone flights. Ultimately, Amazon shut down its College Station drone trial, not due to technical failure but community resistance over trespass and air rights.
Similar stories are playing out globally. In Ireland, locals describe the drone sound “like a motorbike overhead” tolerable perhaps for emergency uses but not for mere fast food drop-offs. In the UK, residents near an Amazon drone trial site warned that “sharp, tonal, and high-pitched overflights” would “drastically change the character” of their area, being more intrusive and stressful than ordinary traffic noise.
This pattern of public backlash shows that drone technology, for all its promise, is stagnating against a wall of misaligned incentives. Companies and some customers enjoy the convenience benefits, but unwilling neighbors bear the price of noise, loss of privacy, and trespass. Those neighbors have no incentive to say “yes in my back yard.” But there is a way to accelerate away from this stagnant path.
Air Rights Breaking the Pattern
The conflict over drones is not new in the history of innovation. Time and again, breakthrough technologies have stalled or faced fierce opposition when they ignored existing property rights or failed to align incentives with the public.
In the case of drones, the airspace just above the land is not an open commons, it is real property. U.S. law, since the United States v. Causby decision, recognises that landowners own the air above their land (generally up to around 500 feet). In other words, anything flying below navigable airspace (typically under 500 ft) is intruding on private property.
Recent court rulings have reaffirmed this principle in the drone era. A Michigan appellate court in Long Lake Township v. Maxon held that a drone flying under 400 feet over private land constituted an aerial trespass and violated the homeowners’ privacy rights. In the UK, courts have begun granting injunctions against low-flying drones. A High Court judge issued an injunction to stop “persons unknown” from flying camera drones over private property, treating the persistent overflights as trespass and nuisance.
These legal precedents underscore that low airspace isn’t a free-for-all; drones that “buzz” in people’s yards are trespassing. Yet drone operators have largely proceeded as if the sky were open, using the air above homes without consent or payment. The result is predictable public opposition, legal challenges, and stalling of projects.
The Railroads Vector
This trajectory mirrors a stagnant path seen before. The early railroads in the 19th century. Laying tracks across a continent meant crossing thousands of private farms and homesteads. If rail companies simply barged through properties without compensation, landowners would understandably sue or even resort to violence, halting progress.
The 1800s railway boom in England was described as “the most dramatic infringement of private property rights” since the Civil War era, an upheaval eventually resolved by a legal framework that forced railroads to buy rights-of-way with just compensation.
In the United States, railroads were explicitly granted powers and massive land grants to acquire land for tracks, ensuring landowners were paid and the national network could be built. By honouring property rights and compensating owners for land or easements, the rail industry aligned incentives and overcame what would otherwise have been gridlock. In contrast, projects that tried to ignore land rights have faltered.
Energy Market Similarities
The U.S. shale fracking revolution succeeded because American landowners own sub-surface mineral rights and directly profit from oil or gas extraction on their land. Energy companies must negotiate royalties and leases, meaning locals have a stake in the success. This alignment of incentives kept opposition low and propelled a boom.
In Europe, mineral rights are typically owned by the state. Residents bear the inconvenience of drilling with little benefit. The predictable outcome has been fierce public opposition and regulatory bans on fracking in countries like the UK, leading to a virtual stagnation of shale gas development there. When people’s property is used without compensation, progress stalls amid protest. When rights are recognized and valued, progress finds a path.
Lessons from Airspace Economics
The drone industry today sits at this inflection point. The economic value of airspace is real, globally in the trillions, and recognised when we look at other contexts. In dense cities, air rights are used to build upward, to protect views, to project over another’s property or to be transferred as a bundle of rights for utility and densification to other locations.
Developers and real estate speculators have paid hundreds of millions of dollars to church parishes, synagogues, condo buildings and their owners for their air rights. These air rights and their options are routinely bought and sold for hundreds of millions of dollars
Air rights prices are up and to the right. Investors paid $164 million to buy the air rights above St. Patrick’s Cathedral, enabling a new skyscraper to rise nearby. The Hudson Yards project similarly spent about $265 million just securing air rights for its towers. The owner of Grand Central Terminal sold its air rights to facilitate what became the MetLife (Pan Am) Tower.
Now, buying options on air rights where drones, development, zoning, and density changes will occur is as easy as buying a bar of chocolate, but with a much higher return on investment.
Airspace is a valuable asset. Legal systems recognise how to treat it as property and assign a value to it in contexts such as real estate and airports. In Nevada, for example, when low-flying planes from McCarran Airport regularly intruded into the airspace above private homes, the state Supreme Court held that this constituted a taking of private property. Clark County was ordered to pay over $16 million to the landowner, since the flight corridors amounted to an “avigation easement” through private airspace that the government had not paid for.
Airports today routinely purchase air rights (avigation easements) for noise and trespass mitigation precisely because below 500 feet airspace is the landowner’s domain. If you want to fly through it, you must pay for the privilege.
These examples demonstrate that property rights in airspace are enforceable and financially significant. When those rights are ignored, as in the drone trials where devices overfly backyards for free, people understandably react as if their property is being invaded, because legally and intuitively, it is. Dismissing this fact and hoping efficiency alone will win people over is a mistake that leads to stalemate.
Many residents like the idea of quick deliveries, but not when it feels like “colonization for no reward.”
The price being offered for use of their sky is effectively $0, which is far too low to clear the market. Under the status quo, drone operators are trying to reach escape velocity without paying for fuel, the fuel in this case being buy-in of the communities below.
Aligning Incentives to Avoid Stagnation
Technology can advance rapidly, escaping the stagnation trap when it works within a framework of rights and incentives rather than against them. To unlock the drone industry’s potential, innovators need to take a page from those earlier cases. Honour property rights instead of ignoring them.
A system to compensate homeowners for drone overflights by paying micro-fees per flight via an app that tracks drones. If residents know they will be paid when drones transit their airspace, the equation changes. What is now seen as an imposed nuisance becomes a welcomed source of extra income and community investment. In the same way that landowners profit from pipeline right-of-ways or cell tower leases on their property.
Markets find a way. There is a market price for everything, even the slice of sky above your roof. And when that price is paid, opposition tends to soften. As one legal analysis bluntly concluded for drone operators, “Drone operators now need to be wary…they should seek the consent of landowners in order to avoid future problems.” Paying for the access reduces complaints, and it would also establish clear rights and responsibilities, allowing drone services to expand with legal certainty rather than in a grey zone. A win-win.
In a wider sense, the commercial drone issue is a microcosm of the modern stagnation challenge. In recent decades, many sectors have experienced a slowdown in innovation, often because society has picked the “low-hanging fruit” of easy gains and then failed to adjust institutions to address the more challenging problems. Progress in the world of “atoms” physical technologies like transportation, energy, and infrastructure has been frustratingly slow, as pointed out by some commentators. One reason is that the real world is messy; unlike software, it involves regulations, property, and people’s backyards. Ignoring those factors breeds stagnation.
By contrast, clear property rights and incentive alignment have historically broken logjams, enabling leaps forward. They turned angry farmers into willing sellers for railroads, turned homeowners into royalty recipients for oil wells, and could turn today’s drone NIMBYs into enthusiastic participants in the drone economy.
Pay for the Sky or Stay Grounded
The history of innovation shows that technology soars when grounded in respect for property rights. Whether laying rails, drilling wells, or flying through the air, honouring the stake that ordinary people have in the environment around them isn’t just a moral or legal nicety. It’s the make-or-break factor that determines whether a new industry truly takes off or stalls out.
The current impasse with drone delivery is a case in point. The concept is technologically sound and “inevitable” on paper, yet drones remain largely stuck in limited trials and face mounting public restrictions. This stalemate mirrors past episodes of stagnation in which innovators barreled forward without bridging the gap to public acceptance.
Drones won’t fail for lack of engineering prowess; they’ll fail by ignoring property rights. The solution is to embrace property-rights. Low-altitude airspace is a valuable private resource it is, the markets set a clearing price for its use.
By compensating communities, rather than treating their air rights as a free commons, drone operators can transform opposition into cooperation. This resolves the immediate noise and trespass issues, and also demonstrates a model for how respecting rights can unlock innovation.
It’s a lesson learned time and again. Technology scales when property rights are honoured, not ignored. Drones can indeed reach their lofty potential, but first, they must pay for the sky or stay grounded.