Blocks & Lots

Floor Area Ratio (FAR) Explained

The FAR is the relationship between the total amount of usable floor area that a building has or has been permitted to have and the total area of the lot on which the building stands.

How is FAR calculated?

FAR is calculated by dividing the total or gross floor area of the building by the gross area of the lot. A higher ratio is more likely to indicate a dense or urban construction. Local governments use FAR for zoning codes.

How Is FAR different front square feet?

FAR is a floor area ratio for the entire floor area of a building. That includes elevator shafts, hallways, basements, parking garages, stairs. These are not included in a square foot calculation which is just the livable area.

What does the FAR tell us?

FAR tells us what type of a neighborhood a building is in. An area with a higher ratio is likely to be dense or highly urbanized area.

How is FAR used in real estate?

FAR is a zoning tool used by cities to establish the size of buildings. A low FAR limits construction. A high FAR allows for more contruction — and higher density. When an area’s FAR is adjusted through a zoning change, developers can increase the size of buildings.

An example of how to use FAR

The FAR of a 1,000-square-foot building with one story situated on a 4,000-square-foot lot would be 0.25. A two-story building on the same lot, where each floor was 500 square feet, would have the same FAR value.

As a more specific example, an apartment building is for sale for $4 million. It occupies 20,000 square feet. The entire lot is 2 acres or 87120 square feet. The FAR is 20,000 divided by 87120. So the FAR is 0.23.

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