Floor Area Ratio - FAR

AAA

DEFINITION of 'Floor Area Ratio - FAR'

The total square feet of a building divided by the total square feet of the lot the building is located on. FAR is used by local governments in zoning codes. Higher FARs tend to indicate more urban (dense) construction.

BREAKING DOWN 'Floor Area Ratio - FAR'

Buildings of varying numbers of stories can have the same FAR, because the FAR counts the total floor area of a building, not just the building's footprint. On a 4,000 square-foot lot, a 1,000 square-foot, one-story building would have the same FAR (0.25) as a two-story building where each floor was 500 square feet.

RELATED TERMS
  1. Builders Risk Coverage Form

    An insurance policy that covers residential and commercial structures ...
  2. Construction Mortgage

    A loan borrowed to finance the construction of a home and typically ...
  3. Building Permits

    A type of authorization that must be granted by a government ...
  4. Planned Urban Development - PUD

    A type of community zoning classification that is planned and ...
  5. Zoning

    Municipal or local government laws that dictate how real property ...
  6. Combined Loan To Value Ratio - ...

    A ratio used by lenders to determine the risk of default by prospective ...
Related Articles
  1. Home & Auto

    8 Signs Your Neighborhood Is On The Upswing

    If you were hard-hit by the real estate crash, you may be wondering when things will get better for you. We show you how to keep tabs.
  2. Home & Auto

    Simple Ways To Invest In Real Estate

    Owning property isn't always easy, but there are plenty of perks. Find out how to buy in.
  3. Entrepreneurship

    Find Fortune In Commercial Real Estate

    Investing in big buildings means big money - and bigger risks.
  4. Home & Auto

    Basics and Differences of Co-ops, Condos & Condops

    Before purchasing a condo or a co-op (or the rarer condop) apartment, here are some basics every purchaser needs to understand.
  5. Personal Finance

    How To Buy A Beach Condo In The Philippines

    Foreigners can't buy land in the Philippines – but they can buy condos. Here's how to get one at the beach.
  6. Personal Finance

    Manhattan Luxury Condos As Investments

    New York City real estate is a trending investment for foreign investors.
  7. Home & Auto

    A Soaring Housing Market: College Apartments

    How to play the boom in upscale student housing.
  8. Retirement

    Does Condo Life Suit You?

    Association fees and disputes with neighbors could spoil your move if you're unprepared.
  9. Home & Auto

    5 Rental Red Flags

    Know what to look for before entering into a rental agreement.
  10. Home & Auto

    4 Overlooked Homeownership Costs

    Mortgage payments aren't the only expense. Find what else you'll be on the hook for.
RELATED FAQS
  1. What is the historical capitalization rate for real estate in New York City?

    Historical capitalization rates, or cap rates, for real estate in New York City and the rest of the country experience cyclical ... Read Full Answer >>
  2. What is the difference between capitalization rate and rent?

    Rent and capitalization rate are both factors that determine whether a real estate purchase is a wise investment. Rent is ... Read Full Answer >>
  3. Where do you get real estate leads?

    Real estate leads come from real world networking in addition to online sources. Tried and tested avenues of following up ... Read Full Answer >>
  4. Can real estate agents help renters find rental property?

    While real estate agents often exclusively service those in the market to buy or sell a home, some can also be excellent ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  2. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  3. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  4. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
  5. Widow's Exemption

    In general terms, a widow's exemption refers to the amount that can be deducted from taxable income by a widow, thereby reducing ...
  6. Wedding Warrant

    A warrant that can only be exercised if the host asset, typically a bond or preferred stock, is surrendered. Until the call ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!