What is Floor Area Ratio? Definition, Calculation, and Real-Life Examples


Floor area ratio (FAR) is a pivotal factor in urban development, representing the relationship between a building’s total usable floor area and the lot it stands on. This article explores the concept of FAR, its significance in zoning codes, and its impact on construction and land use. You’ll discover how to calculate FAR, its implications for various types of structures, and its role in balancing development and land value. Let’s delve deeper into this fundamental aspect of urban planning.

What is floor area ratio?

Floor area ratio (FAR) is a pivotal term in urban planning and construction. It quantifies the relationship between a building’s total usable floor area and the size of the lot on which the building is located. Essentially, FAR determines how much space a structure can occupy in relation to the land it occupies.

The formula for calculating FAR is straightforward:

Floor area ratio (FAR) = Total building floor area / Gross lot area

FAR values are crucial for zoning regulations and city planning. They provide a clear understanding of how densely an area can be developed. Higher FAR values usually indicate more urbanized and densely constructed regions, while lower values imply less dense or suburban areas.

What does the floor area ratio tell you?

FAR accounts for the entire floor area of a building, not just its footprint. It excludes unoccupied spaces like basements, parking garages, stairs, and elevator shafts from the calculation. This comprehensive assessment ensures that the true utilization of a building’s space is considered.

Interestingly, buildings with different numbers of stories can have the same FAR value. This is because cities have a finite capacity for safe development. Exceeding this capacity can strain resources and infrastructure—a concept referred to as the “safe load factor.”

It’s important to note that FAR varies based on the type of structure. Industrial, residential, commercial, agricultural, and nonagricultural spaces all have different safe load factors, resulting in distinct FAR values. Local governments play a crucial role in establishing regulations and restrictions that determine these values.

The significance of floor area ratio

The FAR holds immense significance in urban development. A low FAR often discourages construction, while an increased FAR can open up space for developers, especially in the real estate industry. Here’s why it matters:


Here is a list of the benefits and drawbacks to consider.

  • Allows for more building projects
  • Increases sales potential
  • Reduces project costs per unit
  • Potential negative impact on neighboring properties
  • View obstruction in some cases

The pros of a higher FAR include the ability to complete more building projects, leading to increased sales and reduced expenditures per project. This increase in supply can meet the demand for various types of properties.

Example of how to use the floor area ratio

Let’s illustrate how to calculate FAR with an example:

Suppose you have a 1,000-square-foot building with one story on a 4,000-square-foot lot. The FAR would be 0.25x. Now, if you have a two-story building on the same lot, with each floor covering 500 square feet, the FAR remains 0.25x.

Alternatively, if you know the FAR is 2.0x and the square footage is 1,000, you can construct a building that covers up to 2,000 square feet. This could include a two-story building with 1,000 square feet per floor.

As a real-life example, consider an apartment building in Charlotte, North Carolina. The building spans 17,350 square feet on a lot of 78,843 square feet. The FAR in this case is 0.22x (17,350 divided by 78,843).

The difference between the floor area ratio and lot coverage

While FAR calculates the size of the building relative to the lot, lot coverage takes into account all buildings and structures on the lot. This includes structures like garages, swimming pools, and sheds, even those that do not conform to standard regulations.

Limitations of using the floor area ratio

The impact of FAR on land value is a double-edged sword. While an increased FAR can enhance property value, it may also diminish the value of neighboring properties if their views are obstructed or if the increased density impacts the surrounding area negatively.

Frequently asked questions

How does FAR affect property values?

FAR can impact property values positively or negatively. An increased FAR may make a property more valuable if it allows for spacious rentals or more tenants. However, it can also reduce the value of neighboring properties in some cases.

Are there limitations on FAR in every city?

Yes, most cities have regulations and restrictions in place to control FAR values. These limitations are essential for maintaining a balance between development and infrastructure capacity.

Can FAR vary within a single city?

Yes, FAR values can vary within a city, especially in areas with different zoning requirements and land use designations.

Key takeaways

  • Floor area ratio (FAR) quantifies the relationship between a building’s total usable floor area and the lot it occupies.
  • Higher FAR values indicate more dense urban development.
  • FAR values vary by structure type, such as industrial, residential, commercial, and agricultural.
  • FAR plays a crucial role in urban planning and zoning regulations.
  • It can impact property values and development potential.
View Article Sources
  1. Density and floor area ratio (FAR) calculations – Community Development Planning Division Handout, City of San Pablo
  2. The Floor Area Ratio Gradient: New York City, 1890-2007 – University of Connecticut
  3. The Pareto Principle: Maximizing Efficiency in Personal and Professional Life – SuperMoney
  4. Unlocking the Power of the Price-to-Rent Ratio in Real Estate Decisions – SuperMoney