Floor Area Ratio Economics
FAR (Floor Area Ratio) is the ratio of a building's total floor area to the size of the piece of land upon which it is built. It is the single most powerful regulatory tool in a planner's arsenal.
FAR 1.0
Allows a 1-story building covering 100% of the lot, OR a 2-story building covering 50% of the lot, OR a 4-story building covering 25% of the lot.
FAR 5.0
Allows a 5-story building covering 100% of the lot, or a 10-story building covering 50%. Typical for mid-rise downtown development.
Economic Impacts of FAR Caps
Artificially low FAR caps (e.g., 0.5 in suburban commercial corridors) mandate single-story strip malls and massive surface parking lots. They legally prohibit the area from intensifying, freezing the tax yield while infrastructure liabilities continue to grow.
Common Mistakes in FAR Policy
- Ignoring Setbacks: Planners often grant a 3.0 FAR but mandate 20-foot setbacks and 50% lot coverage maximums, making the FAR mathematically impossible to achieve.
- Blanket FARs: Applying the same FAR across drastically different parcel sizes.
- Exempting Parking: Not counting above-ground structured parking in FAR calculations subsidizes driving.