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What Is the Floor Area Ratio?
Let me explain what the floor area ratio, or FAR, really is. It's the balance between a building's usable floor space and the size of the lot it sits on, and it's a key part of zoning regulations. Local authorities use FAR to set limits on density, which directly affects how cities develop and what properties are worth.
Key Takeaways
Here's what you need to know about FAR. It's the link between a building's total usable floor area and the lot's total area, making it essential in zoning codes. A higher FAR means denser building, and it varies between things like residential or commercial properties based on regulations. Remember, FAR doesn't count unoccupied spaces such as basements or parking; it only looks at usable floor area to gauge development potential. When FAR is higher, developers can build more on the same lot, which can boost supply and cut costs per project.
Calculating Floor Area Ratio
Calculating FAR is straightforward. You divide the total or gross floor area of the building by the gross area of the lot. The formula is Floor Area Ratio = Total Building Floor Area / Gross Lot Area.
Insights From the Floor Area Ratio
FAR considers the entire floor area of a building, not just its footprint. It leaves out unoccupied areas like basements, parking garages, stairs, and elevator shafts from the calculation. Buildings with different numbers of stories can end up with the same FAR value. Every city has a limited capacity for safe use, and going beyond that stresses the infrastructure—this is the safe load factor. FAR varies because of population changes, growth patterns, and construction types, and different spaces like industrial, residential, or commercial have their own safe load factors and thus different FARs. Local governments set the regulations that determine FAR. It's a major factor in development anywhere; a low FAR discourages building, while industries, especially real estate, push for higher FAR to free up resources. Higher FAR lets developers complete more projects, increasing sales, reducing costs, and meeting demand with more supply.
Examples of Floor Area Ratio
Take a 1,000-square-foot one-story building on a 4,000-square-foot lot; its FAR is 0.25. A two-story building on the same lot with each floor at 500 square feet would have the same FAR. If a lot has a FAR of 2.0 and 1,000 square feet, you could build up to 2,000 square feet, like a two-story structure with 1,000 square feet per floor. Look at an apartment complex in Charlotte, North Carolina, for sale at $3 million, spanning 17,350 square feet on a 1.81-acre lot, which is 78,843 square feet; the FAR here is 0.22, calculated as 17,350 divided by 78,843.
What Does Bulk Mean in Zoning Ordinances?
In zoning, bulk refers to the size and shape of buildings on a lot, plus other lot features not tied to buildings. Bulk rules cover things like how close structures can be to lot lines, and they include the floor area ratio.
What's the Difference Between Floor Area Ratio and Lot Coverage?
FAR looks at the building size relative to the lot, but lot coverage considers all buildings and structures on the lot. That means lot coverage includes garages, pools, sheds, and even nonconforming structures.
What Is the Law of Supply and Demand?
The law of supply and demand is about economic balance. Supply is what producers make and want to sell, while demand is how much consumers want and are willing to buy. They're supposed to match, but they don't always. FAR ties into this by controlling the supply of new housing and commercial space in an area.
The Bottom Line
FAR is crucial for property development and urban planning. It sets construction density and affects property values directly. A higher FAR lets developers maximize space, increasing value and addressing urban demand. That said, you have to think about impacts on nearby properties and the overall look of the city. By using FAR wisely, developers and governments can grow while keeping environments livable and appealing.
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