TagFAA(797)

The FAA proposed sweeping new rules in September 2022 governing how airports can use federally acquired or conveyed land for non-aeronautical purposes, such as hotels, warehouses, and car rental facilities. Under the draft policy, airports would need FAA approval for any non-aeronautical or mixed-use activities on such land, with approvals tied strictly to lease terms and requiring renewal each time a lease expires. The changes could significantly increase the regulatory burden on airport sponsors by eliminating the previous practice of permanently designating certain property as non-aeronautical and potentially triggering environmental review requirements under NEPA.

This 2022 FAA guidance letter explains how airports can legally spend airport revenue on noise insulation projects, such as new windows, doors, and air conditioning, for homes and schools located within the DNL 65 dBA noise contour — the federal threshold for significant aircraft noise impact. Spending airport revenue on noise insulation for properties outside that noise boundary is generally prohibited as revenue diversion, unless a lower local noise standard has been officially adopted or 'block rounding' has been approved. The letter also clarifies that airports may purchase mobile or permanent noise monitoring equipment using airport revenue, provided certain conditions are met, but monitors cannot be used to enforce noise abatement flight procedures.

In August 2022, the FAA revised its internal guidance on Section 163, most notably changing how it defines a 'project' so that if any part of a development requires FAA approval, the agency retains authority over the entire project — limiting airports' ability to break larger efforts into smaller pieces to avoid oversight. The FAA also proposed a new land use policy in September 2022 governing how airport sponsors may use federally acquired or conveyed airport land for non-aeronautical purposes, identifying four categories of land use that determine when FAA approval is required. Airport sponsors were encouraged to submit comments on the proposed land use policy before October 17, 2022.

This guide explains how airports can pursue non-aeronautical development under Section 163 of federal aviation law, with a 2022 update covering key FAA policy changes. The update clarifies that if any part of a development project requires FAA approval, the agency now claims approval authority over the entire project — limiting a previous practice of splitting projects into smaller pieces to bypass oversight. It also covers a proposed FAA land use policy affecting how airports may lease or repurpose federally acquired or grant-funded airport land for non-aviation uses.