A zoning lot merger is when two or more adjacent tax lots are combined into one single lot. This allows development rights to be shared among the properties.

In NYC, a zoning lot merger combines two adjacent lots into a single zoning lot to determine development rights. The lots must share 10 feet of frontage to qualify for a zoning lot merger A zoning lot development agreement (ZLDA) is a key part of recording the merger as it outlines how the development rights will be shared.

For owners, a zoning lot merger means that they’re able to make some money off of selling the unused FAR sitting above their property without giving up their property or any equity in the building.

Many owners assume that a zoning lot merger gives up full access to the lot that their property is on, but this is not true, the owner would just be giving up further development rights.

Example: A four-story building on a 5,000 SF lot has an FAR of 4.0, meaning 20,000 SF of floor area is permitted. If the existing building is 8,000 SF, the owner holds 12,000 SF of unused air rights. Through a zoning lot merger with the adjacent lot, where a developer wants to build taller, the owner can sell those 12,000 SF.