What is FAR in Real Estate Development?
What is FAR in Real Estate Development?
FAR (Floor Area Ratio) is a key zoning and real estate development metric that defines the relationship between a building’s total floor area and the size of the land on which it is built. It determines how much building density is allowed on a specific parcel of land.
Formula:
Example Calculation:
- A 10,000 sq. ft. lot with a FAR of 2.0 means the developer can build up to 20,000 sq. ft. of total floor space.
- This can be configured as:
- Two floors of 10,000 sq. ft. each
- Four floors of 5,000 sq. ft. each, etc.
Why is FAR Important?
- Regulates Density – Controls how much building mass can be developed on a site.
- Influences Design & Height – A higher FAR allows taller or bulkier buildings.
- Zoning Compliance – Municipal zoning codes set FAR limits to maintain neighborhood character.
- Property Value Impact – A higher allowable FAR can increase a property’s development potential and value.
Variations in FAR:
- Some cities offer bonuses for sustainable design, affordable housing, or public amenities.
- FAR may differ based on zoning types (e.g., residential, commercial, or mixed-use).
- Certain areas allow transfer of development rights (TDRs), letting developers buy additional FAR from adjacent properties.
