Doma Institute's - FSR vs FAR Explained Simply
Explaining FSR
FSR and FAR are two terms used to describe how much floor area can be built on a property.
FSR means Floor Space Ratio. FAR means Floor Area Ratio. In many markets, they are used in similar ways.
Simple Example
If a property is 10,000 square feet and the allowed FSR is 2.0, the total buildable floor area may be approximately:
10,000 sq ft x 2.0 = 20,000 sq ft
That does not mean the building covers the entire site. It means the total floor area across all floors may equal 20,000 square feet, subject to zoning rules.
Why FSR Matters
FSR affects:
- Land value
- Project size
- Number of units
- Developer revenue
- Parking requirements
- Construction cost
- Profitability
What Realtors Need to Understand
Higher FSR does not always mean a better deal. A site still needs to work financially.
Developers will also review:
- Saleable area
- Efficiency
- Construction cost
- Fees and charges
- Parking
- Market pricing
- Absorption
- Profit margin