Understanding what air rights are, and how they affect the market, are as unique to New York as the land it sits on. NY1's Jill Urban filed the following report.

We all know real estate in New York is at a premium, but it's not just the land that has high value, prices for the air above it can also be sky high. Yes, here in New York, even air comes at a price.

Air rights are this myth in New York City. Air rights are development potential. If you have a two story building, but you really can build five stories, that’s three stories you can sell to your left, to your right or behind you as long as they're 10 feet together. There are a lot of developers out there who want to build bigger and if they can buy your air rights, you have found money," explains Ross Moskowitz, a land use attorney with Stroock & Stroock & Lavan.

Basically, if a building didn't build as high as zoning allows, it can sell that extra square footage of air to a neighboring building for development. Landmarked buildings can sell air rights across the street. This air transfer can translate into big bucks.

"Air rights can go for as a little as $20 $30 a square foot to as much as $200 to $300 even $400 per square foot. It all depends on who’s buying and who’s selling," Moskowitz says.

In the case of landmarked buildings like religious or educational institutions, selling air rights can be a major cash windfall that could save the institution itself.

Using toy blocks, Moskowitz demonstrated just how one building can sell its air rights to make a neighboring building bigger. But he also demonstrated how those who don't even have air rights to sell can also make money.

"Sometimes you don’t even need to have air rights in order to make money," says Moskowitz. "For example, the green building here has air rights that he wants to sell to yellow, but he can’t sell directly to yellow without going through blue. Blue doesn’t have any air rights to sell so green has to make a deal first with blue in order to make a deal with yellow."

Most air rights deals are actually on a smaller scale, where a building sells its space on the roof maybe to a penthouse tenant to build a duplex or to build an additional penthouse.

While air rights are very complicated, the bottom line is if a building has some air to spare, its financial status could be looking up.