What Is the Floor Area Ratio (FAR)?
The floor area ratio (FAR) is a zoning metric that describes the relationship between the total usable floor area of a building and the size of the lot on which it sits. Local governments use FAR to regulate development density and building bulk; it helps control how much built floor space is permitted on a parcel of land.
Key takeaway summary
– FAR = Total building floor area ÷ Gross lot area.
– FAR controls permitted development density, not the building footprint alone.
– Different jurisdictions define which floor areas count toward FAR differently (some exclusions/allowances apply).
– FAR, together with height limits, setbacks, and lot coverage rules, determines the scale and massing of buildings and affects property values and urban form.
Sources: Investopedia (Nez Riaz), American Planning Association, CFI Education, Your Own Architect, Britannica Money.
Calculating Floor Area Ratio
Formula
– FAR = Total Building Floor Area / Gross Lot Area
How to calculate (practical steps)
1. Verify local definitions. Before measuring, check the municipal zoning code for how “floor area” and “lot area” are defined and what is exempt or included (definitions vary).
2. Measure gross lot area. Use property records, survey plats, or GIS parcel data to determine lot square footage.
3. Determine gross building floor area. Sum the floor areas of all stories that the zoning code counts toward FAR. Commonly counted areas include interior floor space used for living/working. Some codes exclude or treat differently elements such as basement storage, parking garages, stairs, and elevator shafts—confirm locally.
4. Apply the formula. Divide the building floor area by the lot area to get the FAR (expressed as a number, e.g., 0.25, 2.0).
Examples
– Single-story example: A 1,000 sq ft single-story building on a 4,000 sq ft lot → FAR = 1,000 ÷ 4,000 = 0.25.
– Multi-story equivalent: Two floors of 500 sq ft each on the same lot → total floor area 1,000 sq ft → FAR = 1,000 ÷ 4,000 = 0.25 (same FAR despite multiple stories).
– Maximum-floor example: Lot with FAR limit 2.0 and lot area 1,000 sq ft → permissible gross floor area = 2.0 × 1,000 = 2,000 sq ft (this could be a 2‑story 1,000 sq ft footprint, a 4‑story 500 sq ft footprint, etc.).
– Real-world example: Apartment building in Charlotte listed at $3 million, building area 17,350 sq ft, lot area 1.81 acres (78,843 sq ft) → FAR = 17,350 ÷ 78,843 ≈ 0.22.
Insights from the Floor Area Ratio
– FAR controls density, not just footprint. A low FAR limits total buildable floor area and tends to preserve lower density (fewer housing units or less commercial floor space). A higher FAR allows more floor area and therefore higher density.
– FAR affects building form. Developers trade off footprint vs. stories to fit within FAR and other constraints (height limits, setbacks).
– Market and planning implications. Increasing FAR in a zone can unlock more developable space, potentially increasing supply of housing or commercial space and affecting property values and construction feasibility.
– Local context and infrastructure matter. Even if FAR is high, infrastructure capacity (roads, utilities, schools) and other regulations may limit practical development.
What does “bulk” mean in zoning?
– “Bulk” refers to the overall size, shape, and placement of buildings on a lot and associated lot features (how tall and wide, how close to lot lines, etc.). Bulk rules include FAR limits as well as setbacks, height limits, and floor‑area distribution rules that control the perceived and actual mass of development.
Difference: Floor Area Ratio vs. Lot Coverage
– FAR measures total floor area across all stories relative to lot area.
– Lot coverage (lot coverage ratio) measures the proportion of the lot covered by building footprints and structures at ground level (including sometimes garages, sheds, pools, and other built elements). Lot coverage limits how much of the lot’s surface may be covered by structures, whereas FAR controls the total volume/area of building floor space.
Relationship to supply and demand
– The law of supply and demand holds that supply (how much product is available) and demand (how much buyers want) interact to determine price and quantity traded.
– FAR acts as a regulatory control on supply of housing and commercial space: tighter FAR limits can constrain new supply and upward pressure on prices; relaxed FAR can increase potential supply, helping meet demand (though infrastructure and market economics also play major roles).
Important practical cautions
– Definitions vary by jurisdiction. What counts in floor area (basements, mezzanines, parking) differs across cities—always consult the local zoning code or planning department.
– FAR is only one of several regulatory limits. Height limits, setbacks, open space requirements, lot coverage, parking requirements, and design rules also shape what can be built.
– Infrastructure and neighborhood impacts matter. Physical capacity and community goals (historic character, transit access) may influence whether allowed FAR is desirable or feasible.
– Incentives and bonuses. Many jurisdictions offer FAR bonuses (extra allowable floor area) for public benefits such as affordable housing, public open space, or streetscape improvements.
Practical steps for property owners, developers, and buyers
1. Identify the zoning designation and FAR limit:
– Check local zoning maps and the municipal code or contact the planning department.
2. Confirm definitions:
– Determine which areas are included/excluded in the local FAR calculation (e.g., basements, parking, mezzanines).
3. Calculate existing FAR:
– Measure or obtain the lot area and the building’s gross floor area that counts for FAR. Compute current FAR to see how much development capacity remains.
4. Determine allowable additional floor area:
– Subtract existing allowed floor area (current building floor area) from the maximum permitted (FAR × lot area) to find remaining capacity.
5. Consider related constraints:
– Check height limits, setbacks, lot coverage, parking, historic district rules, and environmental overlays that may reduce practical capacity.
6. Explore incentives/bonuses:
– See if the jurisdiction offers FAR bonuses (e.g., for affordable units, green building features, public amenities).
7. Engage design professionals:
– Work with an architect and planner early to develop massing studies that meet FAR and other rules and to test buildable scenarios economically.
8. Assess infrastructure and approvals:
– Evaluate utilities, traffic, schools, and community impacts and factor in likely approval processes (variances, rezonings, site plan reviews).
9. Financial feasibility:
– Model development returns given buildable area, unit yields, construction costs, and market prices/rents.
10. If needed, pursue zoning changes:
– If development goals exceed current FAR, consider rezoning, a variance, or an FAR transfer (if allowed) as a formal planning process.
The bottom line
FAR is a core zoning tool that governs how much floor space can be built on a lot and therefore shapes density, building form, and land‑use outcomes. It must be interpreted within the broader regulatory and market context. For any development or purchase decision, confirm local definitions, calculate existing and allowable floor area, check complementary restrictions (height, setbacks, parking), and consult planning and design professionals to translate FAR into an actionable building program.
Sources and further reading
– Investopedia — “Floor Area Ratio (FAR)” (Nez Riaz)
– American Planning Association — “Floor Area Ratio”
– CFI Education — “Floor Area Ratio (FAR)”
– Your Own Architect — “What Is the Difference Between Floor Area and Lot Area?”
– Britannica — “Supply and Demand”
If you’d like, I can:
– Calculate FAR for a specific property if you provide lot area and building floor area.
– Walk through a sample development feasibility calculation using FAR, height limits, and unit yields.
– Summarize typical FAR-related incentives in major U.S. cities (e.g., inclusionary housing bonuses) — note: specifics vary by jurisdiction.