Guide to Floor Area Ratio, Floor Space Index & Plot Ratio

Article Overview

When developers begin mulling new projects, they go through a number of preliminary steps. These include identifying feasible profit opportunities and scouting out suitable plots of land with appropriate zoning. A site’s shape and zoning restrictions can have a profound impact on the project buildings’ ultimate design. One important zoning restriction is floor area ratio (FAR). Other related terms include floor space ratio, floor space index, plot ratio, and site ratio.

In this article, we cover,

  • What is Floor Area Ratio?
  • Related Terms
  • A Brief History of FAR
  • How To Calculate Floor Area Ratio
  • Useful Examples of FAR
  • Other Zoning Considerations
  • How Assets America Can Help
  • Frequently Asked Questions

What Is Floor Area Ratio?

Local governments set FAR requirements to control building bulk, traffic density, and infrastructure demands. It ultimately controls how much area a building can occupy relative to the underlying plot of land. Therefore, architects consider FAR  when designing structures. 

Buildings have many quantifiable characteristics. An important one is gross floor area (GFA), which is the building’s total floor area up to the external face of the outside walls. Another important metric is the area of the land (or plot) upon which a building stands. FAR is the ratio of gross floor area to plot area, indicating the density of the site.

The significance of FAR is that city planners often regulate it through zoning restrictions.

“Floor Area Ratio” Explained by Architect Jorge Fontan

We need to contrast FAR to other, closely related metrics so that we can use them precisely.

Floor Space Ratio and Floor Space Index

Floor area ratio and floor space index are two ways to express the same value. FAR is a ratio, expressed as a decimal. However, floor space index is the same value in percentage form. For example, a FAR of 1.4 is equal to a floor space index of 140%.

FAR and Lot Coverage

FAR indicates a building’s size compared to the lot on which it resides. Conversely, lot coverage accounts for the size of all structures on the lot. Therefore, lot coverage ratio includes the space required for swimming pools, sheds, garages, and so forth.

Although FAR controls the overall building volume characteristics of a site, it does not regulate the building’s placement. Should the government want to influence building placement on a plot of land, it must resort to additional controls. These controls may include setback and line-of-sight restrictions.

Plot Ratio and Site Ratio

“Plot ratio,” “floor space ratio,” “floor space index,” “gross plot ratio,” and “site ratio” are regional synonyms of FAR. Here are some examples of these regional variations:

  • Australia: New South Wales uses the term “floor space ratio”, whereas Western Australia employs the term “plot area.”
  • India: This region uses both “floor space index” and “floor area ratio.”
  • Singapore: The common terms are “gross plot ratio” and “plot ratio.”
  • UK and Hong Kong: These regions interchangeably use “plot ratio” and “site ratio.”
  • United States and Canada: Both countries interchangeably use “floor area ratio” and ”floor space ratio.”

FAR History

The 1916 New York City zoning ordinance was an early example of an attempt to control building height. The ordinance sought to prevent tall buildings from obstructing too much air and light. It did so by controlling setback and height requirements for tall buildings.

Additionally, the ordinance created area districts defined by minimum court and yard dimensions. This controlled the lot coverage ratios for new structures. By combining area and height restrictions, the ordinances effectively controlled the volumes, or bulk, of new buildings. The result was to thwart vertical overcrowding that challenges street capacity.

In 1961, the city revised the ordinance by introducing floor area ratio. The 1961 ordinance grandfathered-in the FARs of buildings that the city would now prohibit going forward.

For example, the Empire State Building has a FAR of 25, a value that would prohibit its construction after 1961. The city introduced FAR requirements to give architects more design latitude while still controlling overall bulk.

FAR allowed architects to vary building dimensions within an overall volume limit. It also helped predict the ratio of residents or tenants per unit of land.

How to Calculate Floor Area Ratio

The floor area ratio calculation is the following:

FAR = Gross Floor Area / Plot Area

Of course, the numerator and denominator must use the same units, such as square feet (sf).

FAR limits urban density, but also indirectly controls a building’s maximum occupancy without regulating the structure’s shape.

Example of Floor Area Ratios

Let’s take an example of FAR equal to 0.1. This means that the gross area of all buildings on the plot cannot be larger than 10% of the plot. A plot size of 100 x 100 feet has an area of 10,000 sf. Therefore, the building’s total floor area of the buildings on the plot tops out at 10% of 10,000 sf, or 1,000 sf.

On the other hand, a FAR equal to 1.00 on a plot of land 100’ x 100’ (10,000 sf.), would top out at 100% of 10,000 sf. Or 10,000 sf, exactly 10x the square footage of our first example.

Other Zoning Considerations

Zoning controls many aspects of a city’s real estate market. FAR figures into zoning regulations by limiting the density of urban areas. Architects must accommodate FAR requirements when designing buildings.

For example, consider a proposed building that must conform to a zoned maximum FAR. An architect can design a one-story building in which the single floor consumes the entire FAR. However, if the architect wants a taller building, each floor must be smaller.

Therefore, the taller the building with a fixed FAR, the smaller its footprint. The architect can flexibly design the building as long as it conforms to the zoned FAR.

Nonetheless, FAR requirements place safe load factor limits on the number of units for a residential build or an office building. This in turn controls other variables, such as requirements for parking or municipal services.

Note that FAR excludes certain types of unoccupied spaces, such as elevator shafts, equipment floors, stairways, parking garages, and basements.

Because FAR doesn’t control physical form, it’s not useful for conserving a neighborhood’s character. Rather, requirements for other metrics are more appropriate, including lot coverage, height, build-to lines, and setbacks.

FAR Factors

Factors affecting FAR zoning regulations include growth patterns, population dynamics, geography, and construction activities. Safe load factors, and therefore FARs, vary across types of spaces or building types (i.e., industrial, commercial, residential, agricultural, etc.). Local governments must consider all these factors when they specify FAR restrictions.

Developers may pressure local zoning boards to relax FAR restrictions. For example, a low FAR limit can deter the development of land and space resources. By raising FAR limits, governments can encourage real estate development that affects local economies. The greater the FAR, the greater the building space that can be built

Changes to FAR requirements can put existing properties at a disadvantage. For example, imagine a residential area in which a low maximum FAR encouraged construction of low-rise apartment buildings.

Now, if the local zoning board relaxes FAR restrictions, a developer can build a tall apartment building. This new building will have unobstructed views compared to the current low-rise apartment building stock. This gives the new building an advantage in the local real estate market. Existing landlords might want to know what motivated the local board to change FAR restrictions.

Premium FAR

Many zoning boards utilize a complex set of rules allowing developers to obtain additional FAR for a project. The rules for this additional, or premium, FAR vary greatly from one locale to the next.

For example, zoning may allow premium FAR if the building abuts the land for a specified minimum distance. Generally, the longer the abutment, the higher the allowed premium FAR.

How Assets America® Can Help

Assets America® makes real estate loans available to developers, investors, property owners, and others. Our network of private lenders and banks can finance real estate projects starting at $10 million. We will be happy to discuss your financing needs confidentially and discreetly at your earliest convenience.

Frequently Asked Questions

What is floor area ratio vs. lot coverage?

Floor area ratio is the percentage of building floor space to lot area. Lot coverage is the percentage of a land plot covered by one or more structures. Both can affect the overall bulk characteristics within a zoning district.

What is the definition of floor area ratio?

The floor area ratio calculation is total building floor area divided by gross lot area. In other words, it is the relationship between a building’s total useful floor area and lot area.

What is the definition of a max floor area ratio?

Maximum FAR accounts for premium space awarded by a zoning ordinance. Zoning variances provide for premium FAR if the building meets certain criteria. The most common criterion is the length of the building/land abutment.

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