It’s a question that aircraft owners and airport-based businesses have been asking for decades—why are there inevitably long waiting lists for hangar rental at just about every GA airport in the country?
A Case Study: Why Investment in Airports Remains a Challenge
Key Takeaways:
- General aviation airports face persistent hangar shortages due to significant disincentives for investment in new construction.
- A primary hurdle is the IRS classifying hangars as "Real Property" with a 39-year depreciation schedule, contradicting local airport commissions that define them as "Personal Property" within short-term land leases.
- These unfavorable tax rules, combined with short land lease terms (often 5-10 years), make banks hesitant to finance, and costly city zoning/building codes for new construction, deter potential investors.
- The article proposes that amending the 1988 McManus decision through legislative change is essential to reclassify hangars for more favorable depreciation and stimulate construction to meet demand.
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