The FAA Regulations That Govern Airport Rents and Hangar Value

The statutory condition on Airport Improvement Program grants and the source of the grant assurances, last modified April 2025 at 90 FR 17501.

Assurance obligations run for decades, often longer than the useful life of the facility that triggered them. A sponsor inherits a compliance posture set by predecessors who are gone and by grant agreements nobody on staff has read.

An obligation inventory and compliance baseline: which assurances attach, when they were triggered, and what they require of the current rate structure. This is the natural first phase of an airport authority retainer, because it converts a vague sense of exposure into a documented position the board can act on. It also establishes the record a sponsor needs before any rate change, rather than after a complaint arrives.

Reasonable terms without unjust discrimination across all types of aeronautical activity. Subsection 22(c) requires uniform rates among FBOs making the same or similar use of the same or similar facilities.

Rate schedules accumulate exceptions. A tenant who negotiated well in 2011 pays less than a neighbor in an identical unit, and nobody remembers why. Every one of those differences is a potential complaint.

A facility rent study that produces defensible product classes rather than a single blended number. Continuous regression output is binned into class boundaries so the resulting schedule treats functionally identical units identically, and every surviving rate difference is traced to a documented difference in facility or use. Where a sponsor needs to preserve a difference, the Joliet Avionics framework provides the template, and VTF documents the not-similarly-situated case in the report itself rather than leaving the sponsor to argue it later.

Requires a fee and rental structure making the airport as self-sustaining as possible under local circumstances. The federal share of grant-funded development is excluded from the rate base.

Cost-based rate indications built by staff or by a generalist appraiser almost always include the full construction cost, including the federally funded portion. That inflates the rate base and produces a rate the sponsor cannot defend.

VTF builds cost-based indications with the federal share stripped out and the exclusion shown on the face of the schedule, so the arithmetic is auditable. Equally important, VTF frames the self-sustainability test correctly as airport-wide and long-horizon, which protects sponsors from the opposite error of assuming every individual premises must cover its own cost. That framing has real money attached where a sponsor is being pushed to raise a rate the policy does not actually require them to raise.

Airport revenue must be used for airport purposes. The obligation does not expire while the property is used as an airport.

Below-market rent is a form of revenue diversion. Sponsors reach it gradually, through years of incremental increases that never catch up to the market, which is exactly the pattern the FAA found objectionable in Haney.

A documented fair market value determination is the remedy and the defense at once. VTF produces the FMV record a sponsor needs to justify a correction, and sizes the gap so the board can decide whether to close it in one step or on a documented schedule. For tenants and their counsel, the same analysis works in reverse, testing whether a proposed increase is actually supported or merely asserted.

The Airport Compliance Manual, effective February 20, 2026, cancelling 5190.6B. Paragraph 17.9 provides that aeronautical fees for hangars and aviation offices may be at fair market rate but need not exceed cost, so charges can fall between cost and FMV. Paragraph 17.11 makes FMV the minimum for non-aeronautical use. Paragraph 18.18(a) requires consistent methodology across comparable aeronautical users.

Sponsors and tenants both misread the band. Sponsors assume FMV is mandatory and raise rates they did not have to raise. Tenants assume any rate below FMV is a discount they are owed. Both readings are wrong for aeronautical property.

VTF delivers the FMV opinion and then does the thing most appraisers do not, which is explain where the number sits in the sponsor's lawful range. For an aeronautical hangar, the opinion establishes the ceiling, not the required rent. In a negotiation with a sophisticated corporate tenant, knowing the ceiling and the floor is worth more than knowing a single point estimate. VTF reports also cite the current order, which matters because any analysis still resting on 5190.6B is vulnerable on currency alone. For what changed and what to re-cite, see 5190.6B is cancelled: what Order 5190.6C changes.

Paragraph 2.6.1 permits historic cost valuation, direct negotiation, or objective determinations of fair market value. Parent paragraph 2.6 was vacated in Air Transport Association v. DOT and now reads Reserved.

A sponsor needs to know its chosen methodology is one the FAA accepts, and needs the citation to survive scrutiny. Reports built from secondary sources routinely cite the vacated paragraph.

VTF names the methodology, cites the surviving provision, and states the vacatur history in the report rather than leaving it for opposing counsel to discover. That converts the rent study from a professional opinion into a documented compliance step, which is a materially easier expenditure for a public sponsor to justify to a board or a finance committee.

Fair market value is not required for aeronautical use and is required for non-aeronautical use.

The classification decides which legal standard applies, and it is often genuinely uncertain. Mixed-use buildings, hangars with office suites, hangars used partly for storage of non-aircraft property, and tenants whose aircraft are no longer active all sit on the line.

VTF scopes classification as a discrete deliverable when the answer is not obvious, with the determination supported by the hangar use policy and documented in a form the sponsor can rely on. Getting this right first is what keeps the valuation from reaching a defensible number under the wrong standard, which is the most expensive error available in this work and the hardest to repair once the report is public.

Effective September 10, 2018. Recommends comparing aeronautical property to like property at similar airports regionally, enumerates seventeen comparability factors, provides a return-on-value rent formula, requires two appraisals plus a review at one million dollars or above, and calls for a new appraisal if a matter has not gone to contract one year from submission.

Sponsors trying to justify a rate by reference to their own existing rents run straight into circularity, because those rents are the thing in dispute. And most appraisers have no defensible basis for selecting hangar comparables.

This is the center of the practice. VTF builds the comparable set off-airport as the FAA recommends, adjusted against the seventeen enumerated factors, and supported by a proprietary national hangar rent index with state-level subsets. That combination breaks the circularity problem and gives the sponsor evidence that does not depend on the rates being challenged. The one-year shelf life is also managed proactively, with update work scoped in advance for matters that are likely to sit before going to contract.

Effective July 1, 2017. Storage of active aircraft is aeronautical use. Non-aeronautical hangar use requires non-aeronautical fair market rental fees, regardless of whether the user owns or leases.

Mixed-use buildings cannot be rated at a single rate without either undercharging the non-aeronautical component or overcharging the aeronautical one. Both are compliance exposures.

VTF rates components separately, with office and storage areas analyzed against different evidence than aircraft storage area, and the classification of each component documented to the policy. This is the structure of the Keystone Heights work and a recurring pattern in municipal hangar stock, where buildings were rated decades ago as single units and have never been revisited.

Brought by a person directly and substantially affected. Produces a Director's Determination and a judicially reviewable decision with significant consequences.

A sponsor under complaint faces a deadline, a corrective action plan, and an agency that will review the adequacy of whatever it produces.

In Haney the FAA's ordered remedy was a new appraisal or FMV methodology with a scope of work acceptable to the Director. That is precisely the deliverable VTF produces, and VTF scopes it to the standard the docket record shows the agency expects rather than to a generic appraisal specification. For complainants and their counsel, the same capability supports the affirmative case, testing a sponsor's rate structure against the methodology the FAA has actually endorsed. See expert witness and litigation support.

May be brought by any person, produces a non-final decision, and often arrives as an FAA letter of investigation.

The sponsor needs a credible response quickly, usually before it has budget for a full narrative appraisal and often before it knows whether it has a real problem.

A restricted-use rent analysis or consulting engagement sized to the question, delivering a defensible methodology and a supported rate range on a short timeline. If the informal matter escalates, that work becomes the foundation of the fuller report rather than being discarded, so the sponsor is not paying twice.

Bars actions depriving the sponsor of rights and powers needed to comply with the assurances. In practice, ground lease terms stay under fifty years and leases are subordinated to the assurances.

Every leasehold improvement on public airport ground is a wasting asset. Owners, buyers, and lenders consistently underestimate how much value the remaining term destroys, and most appraisals treat term as a footnote rather than a driver.

The lease term risk assessment quantifies the relationship between remaining term and value directly, grounded in VTF's own empirical research rather than in rule-of-thumb adjustments. For lenders, this is the difference between an amortization schedule that matches the countable term and one that outlives the collateral. For owners and buyers, it is usually the single largest number in the analysis.

Prohibits exclusive rights to conduct an aeronautical activity, including constructive exclusive rights created through unreasonable minimum standards or facility control.

A hangar owner projecting commercial sublease income may be projecting revenue from a right the sponsor cannot lawfully grant, and a lender may be underwriting to that projection.

VTF tests the income assumptions against what the sponsor can actually authorize before the value conclusion is set, and separates income the leasehold can legally produce from income the pro forma merely assumes. That aligns with SBA collateral guidance, which independently excludes the contributory value of rental income and intangibles, and it protects the lender from a collateral position built on a defect nobody priced. See underwriting a loan against a leasehold hangar.

Requires a current FAA-approved ALP and bars changes inconsistent with it absent approval.

A development site that is not reflected on an approved ALP may not be buildable at all, and planned development shown on the ALP may compete with the subject in ways the pro forma ignores.

Feasibility work at VTF starts with the ALP rather than treating it as a background exhibit. Approvability is stated as a condition or an extraordinary assumption rather than assumed, and planned competing supply is carried into the absorption analysis. That is the difference between a feasibility study that survives a lender's review and one that does not.

Guidance on qualifications a sponsor may require of commercial aeronautical operators. Permitted but not required, and must be reasonable, relevant, and applied without unjust discrimination.

Many sponsors have no current minimum standards document, or have one drafted decades ago. Standards set too high become a constructive exclusive right. Set too low, they degrade the tenant base and the rent roll.

VTF treats minimum standards as an input to the rent conclusion rather than background, because they determine tenant quality and capital commitment. Where a sponsor needs them reviewed or rebuilt, that is a standalone consulting engagement, and it pairs naturally with a rent study since both rest on the same market evidence.

Permits general aviation airports to enter residential through-the-fence agreements for noncommercial use, requiring access charges the sponsor determines are comparable to those paid by on-airport tenants making similar use.

The sponsor has to set an access charge that is defensibly comparable to on-airport rates, and the off-airport owner has to know whether the access right is durable or legacy, because it drives value.

The statutory comparability test is a rent study by another name, and VTF is positioned to run it from the on-airport evidence the sponsor already has plus regional comparables. On the owner side, VTF values the access right explicitly rather than folding it into a general location adjustment. There is very little competent competition in this niche.

Standards and notice requirements for obstructions to navigable airspace.

Height limits cap door height, door height caps aircraft class, and aircraft class caps rent per square foot. Two parcels of identical size can support entirely different buildings.

VTF screens comparables for airspace constraint rather than for square footage alone, so a site that cannot accommodate a tall door is not treated as equivalent to one that can. In development work, the Part 77 outcome is frequently the binding constraint, and identifying it early changes the recommendation rather than qualifying it after the fact.

Requires notice of certain airport construction and alteration, separate from and additional to Part 77.

Entitlement timelines are where development pro formas are most often wrong, and lenders know it.

VTF builds the federal notice steps explicitly into the feasibility schedule and carries the associated uncertainty into entrepreneurial incentive rather than assuming it away. A timeline that shows its work is substantially harder for a credit committee or an opposing expert to challenge.

Taxiway and taxilane object free areas, building restriction lines, and the geometric separations governing where a structure may sit.

Usable footprint is not parcel area. A cost approach sized off gross land area overstates developable area and therefore value, which is among the most common errors in generalist hangar appraisals.

VTF sizes the improvement against the applicable design constraints and, where appropriate, analyzes apron and taxilane area as a separate income component rather than folding it into the building rate. That refinement appears in the better hangar appraisals in the public record and is a house standard here.

Part 139 governs certification of airports serving certain air carrier operations. Part 150 covers voluntary noise compatibility planning and compatible land use.

Airport-level attributes drive rent variation across facilities that look identical on paper, and most appraisals treat the airport as a location rather than as a set of measurable characteristics.

VTF's research program measures airport characteristics as explanatory variables rather than describing them narratively, which is what allows a comparable at one field to be adjusted defensibly to a subject at another. Part 139 status flows into expense loads and access assumptions; Part 150 contours flow into the durability of surrounding land use over a long lease horizon.