Cashing in on the sky: financialization and urban air rights in the Taipei Metropolitan Area

ABSTRACT

This paper focuses on urban air rights, property rights for the ownership, development and trading of the airspace above land parcels. A three-fold contribution is made to the study of urban financialization. First, urban air rights are explicated as a new empirical terrain for research into urban financialization. Second, air rights are conceptualized as ‘market devices’ that enable market-making processes and are deployed by an activist state to facilitate regulatory and socio-technical conditions for urban financialization. Third, case studies of urban Taipei show air rights take subtly different forms across financialized processes of infrastructure provision and urban renewal.

KEYWORDS:

• air rights
• market devices
• financialization
• volumetric urbanism
• Taipei

JEL:

• G32
• H42
• O18
• O21

ACKNOWLEDGEMENTS

The author owes a special thanks to Paul Langley for his stimulating feedback and support throughout various versions of this paper. Earlier versions of this paper received useful comments from Gavin Bridge, Dariusz Wójcik, Kathe Newman and John Morris. Previous versions of this paper also benefited from discussions undertaken in sessions at the 1st FinGeo Global Seminar in 2016 and at the 2017 AAG Panel on ‘Marketing Air Rights: Urban Solution or “Zoning for Sale”?’. Finally, feedback from three referees was very constructive. The author is solely responsible for any defects that remain.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the author.

ORCID

Hung-Ying Chen http://orcid.org/0000-0003-4938-6277

Notes

1. Confidential interviews with three officials from New Taipei City government, November 9 and 13, 2015.

2. Confidential interviews with a focus group made up of five participants who are developers and assembling experts, January 4, 2016.

3. Semi-structured interview with the redeveloper of Da-Chen Community, January 4, 2017. The rule of thumb in such underwriting processes still requires a certain amount of collateral from the lender.

4. Confidential interviews with a focus group comprised of six local residents from Da-Chen Community, November 7, 2015. The economic incentives staged by the air rights regime were not complementary to reaching the residents’ agreements. During spring 2015, there were 10–20 remaining households who rejected the redistribution scheme. While this case was acclaimed to be paradigmatic for its achievement of a 100% agreement, what underlay the process was a series of crackdowns on and demolitions of unapproved buildings launched in the adjacent Taipei City that affects the recalcitrant owners either to opt out or to agree to join.