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The floor area ratio (FAR) is an essential metric in the field of planning. This ratio determines the intensity of development as well as a slew of other laws and development results. Let us break down this ratio even further so that you know what you are working with when you see this term.

What Is Floor Area Ratio?

The floor area ratio is the proportion of a building's entire useable floor area to the total area of the site on which it is situated. A larger ratio would most likely suggest dense or urban development. The floor area ratio is used by local governments to create local zoning codes.

You can calculate the ratio by dividing the building's overall or gross floor area by the site's gross area.

Floor Area Ratio = Total Building Floor Area / Gross Lot Area

In summary, the floor area ratio is a measurement that assesses development intensity by determining the ratio of a structure's total floor area (or gross floor area) to the size of the patch of land on which it is constructed. In most cases, floor area ratio is stated as a decimal number.

The Genesis of Floor Area Ratio

The floor area ratio (FAR) is one of the most often used regulatory measures in city planning, and it is important to understand how plans and zoning rules shape the built environment's future. The FAR is defined by zoning laws at ratios that correspond to the desired outcome for future development—when the FAR is higher, more, larger developments are wanted. However, in the US, the floor area ratio is most commonly employed to restrict land use intensities or to manage the mass and size of the development.

A big floor area ratio is sometimes regarded as a development incentive and consequently a tool for economic development. Zoning regulations determine the permissible floor area ratio, which varies widely based on the land use. As a result, the vast majority of residential zones in various cities are zoned for relatively low floor area ratios, while the vast majority of office and commercial uses permitted in the core area have higher floor area ratios.

The earliest zoning regulations were developed to limit the size of structures, but later on, floor area ratio arose as a new way for zoning codes to achieve their purpose of regulating development intensity. The American Plan Association's Planning Advisory Services (PAS) study from 1958 reveals more about the origins of FAR as a standard instrument for plan execution.

What Information Does the Floor Area Ratio Give You?

The floor area ratio takes into consideration a building's full floor area, not just its footprint. Unoccupied areas such as stairs, basements, parking garages, and elevator shafts are not included in the square footage calculation.

Furthermore, the floor-area-ratio value can be the same in buildings with varying numbers of stories. Each city has a finite amount of capacity or space that can be used responsibly. Any use above this puts an excessive amount of strain on a city. The safe load factor is another name for this.

Due to population dynamics, construction activities, and growth patterns, as well as the nature of the space or land where a structure is positioned, the floor area ratio fluctuates. Because the safe load factors for residential, industrial, agricultural, commercial, and nonagricultural spaces vary, they often have different floor area ratios. Finally, the floor area ratio is determined by local government regulations and constraints.

In any country, the floor area ratio is a critical determinant of progress. Construction is often discouraged by a low floor area ratio. Many businesses, most notably the real estate industry, want increases in the floor area ratio to allow developers more room and land resources. A higher floor area ratio allows a developer to execute more construction projects, which in turn results in more sales, lower project costs, and increased supply to fulfill demand.

What Is the Purpose of Floor Area Ratio?

Local governments can utilize the floor area ratio to divide the land into zones in order to limit urban development. In the absence of constraints on the external shape of the property, the ratio not only limits construction density but also limits the number of people allowed inside.

Assume that the floor area ratio to be followed by a piece of property is 0.2. It means that the total or gross floor area of all the buildings on the plot of land should not be more than one-fifth of the overall plot area.

As a result, if the plot is 15,000 square feet, the total floor area of all the structures on the plot should not exceed 3,000 square feet.

Architects can design to use the available space in either a multi-story or single-story structure. The footprint of a multi-story building, on the other hand, should be less than that of a single-story house for the same floor area.

When the horizontal and vertical restrictions are integrated into one number, a certain amount of flexibility in the property design is possible. The advantage of treating the floor space as constant is that it is compatible with the other zoning regulatory considerations.

Interpreting Floor Area Ratio

The floor area ratio takes into account not just the structure's footprint but also its full floor area. As mentioned above, the assessment of a floor area ratio excludes unoccupied regions such as elevator shafts, parking garages, and basements.

Localities may have limited space or capacity, and exceeding that capacity puts them under strain. It is also known as the safe load factor.

The floor area ratio varies due to changes in population density, growth trends, construction-related activities, and the nature of the building's space or land. Because the safe load factors for agricultural, industrial, and residential sectors differ, the floor area ratio for each space is different. To develop FAR, local governments imposed limitations and rules.

Furthermore, the floor area ratio can also be used to determine an economy's level of development. Increases in the ratio are sought by the real estate industry, meaning that they want to give up land resources and areas to developers.

A higher floor area ratio allows developers to complete high-density construction projects faster, resulting in more sales and supply and lower project costs. A low ratio, on the other side, limits growth and construction.

If the floor area ratio rises, the estate may become more valuable if the building is built in a way that allows for additional room or people.

Understanding the Components in the Calculation

Since floor area ratio is a ratio, comprehending the term necessitates knowledge of the ratio's components.

The first component of floor area ratio is a measure of the buildable land area for the complete site, unit, or lot, in square feet. Furthermore, the section of a development site where construction can reasonably and legally take place is known as the buildable land area. Many encroachment factors, such as public streets and other public rights-of-way, streams or wetlands, and regulatory restrictions, might limit the buildable land area. Particular, local zoning ordinances and land use regulations define which regulatory consequences and other encroachments define the buildable land area.

Moving on, the second calculation is made by calculating the floor area of each story of the building, once again in square feet, and then summing the areas of every floor to get the gross, or total, floor area of the structure.

The floor area ratio is calculated by dividing the total floor area by the buildable land area.

Floor area ratio would provide a large degree of latitude in the ultimate shape of a building if there were no other development limits. Other laws, such as height limits, limit how floor area ratio can be allocated in many regions around the US and the rest of the world.

Residential Zones

What additional benefits does floor area ratio provide in residential zones, bearing in mind the aims of bulk controls? High-density and low-density usage need to be addressed individually in order to arrive at an answer to the question.

The use of the floor area ratio appears to be restricted in one- and two-family zones. Without delving into the well-established explanations for yard requirements, we can observe that they impose a volume constraint in addition to maximum height limits. When these proportions are paired with maximum lot coverage, we get an outcome that is similar to a floor area ratio in that it establishes a consistent ratio between land area and building volume.  They also ensure a minimum separation between properties, which is not always guaranteed by floor area ratio control solely.

Commercial Zones

The floor area ratio is most effective in central business districts and other high-density areas where tall buildings, retail, hotels, and towering apartment complexes are frequently intermingled. In these regions, the device's natural advantages appear to be most effective.

Whether or not height constraints are intended is one of the first considerations in establishing what floor area ratios are suitable for a downtown business district. Although any given ratio produces an ultimate realistic height limit, the outcome may be larger than necessary for various reasons. A fire district, for example, might set maximum height limits.

Industrial Zones

The floor area ratio is considerably less relevant as a bulk factor in industrial districts than in any other type of use zone. Despite the fact that modern plants share many features, these qualities are not always homogeneous within a zone. This is because industrial zones are primarily defined based on manufacturing processes' "nuisance" features.

How to Use Floor Area Ratio: An Example

A 1,000-square-foot structure with one story on a 4,000-square-foot land would have a 0.25x floor area ratio. The floor-area-ratio value of a two-story structure on the same property with each level measuring 500 square feet would be the same.

Another way to look at it is that a lot has a square footage of 1,000 and a floor area ratio of 2.0x. In this case, a developer could build a structure with a floor area of up to 2,000 square feet. This might feature a two-story, 1,000-square-foot structure.

Consider an apartment complex for sale in Los Angeles, California for instance. The apartment building is for sale for $3 million and spans 17,350 square feet. The total area of the property is 78,843 square feet or 1.81 acres. 17.350 divided by 78,843 equals 0.22x, or 17.350 divided by 78,843.

What Is the Difference Between the Lot Coverage and Gross Floor Area Ratio?

While the floor area ratio determines the size of the structure in relation to the lot, the lot coverage considers the size of all structures and buildings. Structures such as garages, sheds, and swimming pools, as well as nonconforming structures, are included in the lot coverage ratio.

What Are the Advantages of Floor Area Ratio?

The most common reason stated for the floor area ratio is that it gives zoning ordinances more "flexibility." This word deserves a closer examination because it is frequently misused, with the belief that "flexibility" is a good thing in and of itself. "Capable of being adapted, transformed, or molded; plastic, pliant," according to a standard dictionary, and "willing to yield to influence," according to another. "Readily adaptable to shifting conditions" is another.

As has often been stated, the zoning code is concerned with the bare minimum — that is, the bare minimum that can be done to achieve the zoning ordinance's objectives.

If this is the case, what is the justification for departing from any of them?

One answer is that assuming that there is only one set of requirements that fulfill zoning needs is a misconception. The argument for flexibility is that if the many variables are adjusted around a little, the overall effect on welfare concerns may be the same. Meanwhile, the person is given an option and the opportunity to experiment. If the ratio of floor area to lot area is the main factor, there is no reason to set zoning laws so stringent that only one type of floor arrangement is possible.

Other considerations must, however, be addressed in most cases. Keep in mind that these differ throughout the major use of the principal zone.

Additionally, other benefits often cited as unique to the ratio include:

  • It equally applies to all kinds of structures
  • FAR applies "with equity" to a wide range of sizes
  • The ratio considers the prospect of more than one structure on a parcel;
  • It applies directly to the structure and is unaffected by the variable factor of occupancy
  • FAR allows for greater architectural variety
  • It provides a rapid estimate of a building's capacity, which is beneficial to both builders and government agencies for city planning
  • This ratio eliminates the incentive to cram extra stories into the permissible volume of a tall building
  • Lastly, it enables the use of novel construction processes more possible than under traditional regulations

It is essential to remember that, while the concept of the floor area ratio extends back a few years, it is still a new and relatively untested technology in practice. We're talking about where it's at right now in terms of development.

Are there Any Limitations When Using Floor Area Ratio?

The effect of the floor area ratio on land value is bidirectional. If, for instance, an apartment complex can be created that provides for more spacious rents or more tenants, an improved floor area ratio can make a building more valuable.

Developers who can construct a larger apartment complex on one piece of land, on the other hand, may reduce the value of a neighboring property with a higher sale value enhanced by a now-obstructed view.

Disclaimer

Floor area ratio is frequently confused with density, whereas it is a measure of development intensity—the volume, massing, or bulk of properties.

However, floor area ratio does have ramifications for density when it comes to regulating development intensity. Other zoning code factors, such as parking restrictions, residential units, and total burden on municipal services, are frequently determined by floor area ratio. Since the floor area ratio determines density measurements, whether direct or indirect, it is commonly mistaken for density.

Some of the misunderstandings may stem from the common practice in today's zoning codes of including programs that provide bonus floor area ratio to developers who pay for or include community resources such as public realm improvements, affordable housing units, or desirable uses (such as healthcare or grocery stores). These initiatives are commonly referred to as density bonus programs; however, the bonus paid to participating developers is normally calculated in terms of floor area ratio.

Taking a Closer Look at the Use of Floor Area Ratios

Although it is appropriate to be influenced by what other counties and cities are doing when settling on a few of the minimum zoning standards, relying on floor area ratio provisions established by other jurisdictions to the same degree would almost certainly be a mistake. Almost as much as the purposes to which it is devoted, the intensity of land development influences the character of a city and the demand for public utilities and services. As a result, before designing the controls, it is required to first establish an abstract understanding of the desired construction intensity limitations. The floor area ratio that is appropriate for a given community is that which accomplishes or assists in achieving the specified intensity of use.

Controversies

Increased floor area ratios are sought by many businesses and developers to provide for additional revenue-generating space in a planned construction. If there is fear of congestion, overdevelopment, and scarce resources such as fire and police services, development opponents strive to limit the gross floor area ratio.

In planning history, floor area ratio has also received deeper philosophical challenges. FAR is deemed ineffectual for planning and placemaking by the Congress for the New Urbanism, which has been one of the primary reform organizations in planning for years. Some of these criticisms can be found in Elizabeth Plater-Zyberk, Andres Duany, and Jeff Speck's book Suburban Nation.

Essential Facts

  • The floor area ratio is the relationship between a building's total useable floor space and the total area of the lot on which it stands.
  • A greater ratio denotes a densely populated or highly urbanized area.
  • Industrial, commercial, residential, and agricultural structures have different floor area ratios.

The Bottom Line

Traditional bulk controls have been refined using the floor area ratio. It illustrates the mathematical relationship between the volume of a structure and the unit of land in one metric rather than several. It does not, however, have any control over where that volume is placed on the ground. As a result, supplemental bulk devices are required if the location is a consideration to be managed.

The floor-to-area ratio isn't a panacea. It acquires value as a zoning device when the numerical value allocated to it aids in the achievement of the zoning ordinance's goals while also allowing structure designers more flexibility.

As a result, a low floor area ratio isn't always a good thing, and a high one isn't always a bad thing. It is conditional on the zone.

Because gross floor area is a measure of the burden on public utilities and streets, as well as the demand for parking and transportation, the floor area ratio can be used to control traffic generation and forecast future needs. The floor area ratio is ineffective as a density control and predictor since gross floor area is not a measurement of population density.

The adaptability of the initial concept has increased as it has been modified. It's conceivable that subsequent improvements improve its utility. However, as new amendments are made, the ordinance's provisions become increasingly complicated. The premiums are overly complicated for a small community and should not be duplicated blindly, for example. Furthermore, the benefits of the floor area ratio appear to occur only in high-bulk zones where the building height is not a major consideration. As a result, the floor area ratio isn't always a good thing.

David Bitton

David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his two children, he's writing articles here!