The Next Frontier Is Decentralized
From Erosion to Empowerment - Protecting Our Rights
The United States has a decentralized real estate market - valued at ~$40 trillion. These real estate owners own low-altitude air rights - the space above land and buildings. There are billions of underutilized air rights parcels in the US with a locked value of $2 to $10 trillion.
Buying and selling real estate has been made slower and more costly over time, with multiple middlemen, additional transaction costs and barriers to trade such as height restrictions and objections to densification. The net result leads to mobility issues for people; accessing liquidity from these assets for the owners is complex and dependent on multiple agencies and the favourable blessings of centralized institutions.
The total land area of the United States is ~2.3 billion acres
Private 1.2 billion acres (55%)
Federal 640 million acres (30%)
State 144 million acres (7%)
Municipality 20 million acres (2%)
Other/Uncategorized 100 million acres (6%)
A Look Back
Due to the rapid spread of the British legal system throughout the centuries, air rights form a part of many owners' portfolios; globally, the valuation of these air rights is more than $30 trillion.
Throughout history, real estate and land have played a pivotal role in nations’ development. If kings, prime ministers, presidents and Gods are not going to war for land, it’s for little else. Plundering to increase the wealth of a nation and subjugating their people to fill the coffers of Rome, Berlin, or London has been a pastime of many rulers.
Land is valuable. When we think of land, we often think of the ground, a plot where crops can be grown for trade, or a house can be built to shelter a family. However, land is not 2D; land is 3D.
If you have no rights to the 3D airspace above the land, you have no right to the crops that take up that 3D airspace. You have no right to build into the 3D airspace if you only have the right to the dirt. This means in owning real estate - you own the 3D airspace.
While it was imperative in our history to have crops and a roof to shelter under, we didn’t see the need to use 3D airspace any further. Yes, if we wanted to build higher, we knew we needed to do it into this airspace, but the concept seemed distant to many. This comes from the regulators and centralized bodies that impose rules for using your property.
You can only build into the 3D airspace to the height we say; you can only occupy your land if you have three bedrooms, and four bedrooms would upend society as we know it. You can only enter your property from the access point we deem appropriate. This erosion of property rights by proxy led people to be subjugated, thinking they no longer had control over their dominion.
Beyond acquisition and disposal, owners have the right to possess and control land, to exclude others, the right against trespass, the right to quiet enjoyment, and the right to actively utilize the 3D land. This means real estate owners can trade the air rights above their property and, if they wish, permit drones to be in that airspace, which is an unlock for this trillion dollar market.
Democratic Evolution
Over time and with the evolution of democracy, real estate became an asset that was more accessible. One of the driving factors has been access to credit, the financialization of 3D real estate, and the products and systems developed around it.
The ownership structure of land in the United States has significantly changed over the past 500 years. In the 1620s, European settlers began acquiring land from Native American tribes, while the Pilgrims received a grant of 500 acres from the Massachusetts Bay Colony. The Declaration of Independence declared that all land in the colonies was owned by the people, not by the crown.
Over the centuries, the US government acquired land, including the Treaty of Paris (and the Northwest Ordinance. The Louisiana Purchase of 1803 added 828,000 square miles to the country, later divided into state lands and private property.
The Homestead Act and Pacific Railroad Act of the 1860s fueled a surge in private land ownership.
The Great Depression of the 1930s led to increased government control over land use. The expression never let a crisis go to waste springs to mind. In the 1960s, we saw the rise of government oversight and preservation efforts further curtail property rights.
In the 1980s, tax policies and deregulation increased private investment in real estate, but it was short-lived. Following the GFC, a rise in government regulation slowed the market, removed many from it, and power over individual assets began to creep further towards the centre.
Private land ownership in the United States has declined over the past few decades. This is due to increased government control over land use, regulation of private property, and changes in tax policies and financial regulations. People's rights eroded.
Landowners have long-held rights to exclude anything unwanted from their 3D airspace and use it as they see fit.
In the 1940s, the US Supreme Court established that landowners own the "immediate reaches" of airspace above their land, with the right to keep out aerial invasions that would compromise their enjoyment of the property. This principle underlies various doctrines, including condominiums and airport easements.
Why Claim Your Air Rights & How To Claim Them
Air rights have a high value. They can range from 5% of the land value to 50% in some cases. Air rights can be traded for additional income streams and capital growth. $30 trillion has yet to be mined from air rights.
Sometimes, all is not as it appears. Adverse Possession is a legal doctrine allowing an individual to gain ownership of a property they have been using and possessing without the owner's consent, as long as they meet specific requirements. This means there is a risk that someone using your land or airspace like a commercial drone company without permission could take your property.
It is imperative that landowners, big and small, claim their air rights and, if they want, utilize them for their benefit. If you don’t claim them, they could be taken away. More rights eroded; then it’s just another note in history unless action is taken.
