A Guide to Floor Area Ratio and Its Significance

Several factors have to be considered when you buy land for construction. From the Floor Area Ratio (FAR) allowed by the local civic body to identifying whether the land is freehold or leasehold. FAR is one of the most important parameters that affect the property’s built-up space. Hence, it is vital to stay abeam of the FAR norms that the authority in your jurisdiction has regulated.

What is a Floor Area Ratio?

The Floor Area Ratio (FAR) which is also known as the Floor Space Index (FSI) or the Floor Space Ratio (FSR) portrays the relationship between the plot's total area on which the building is established and the total floor area that is usable in a building. The FAR of a particular area is ascertained by the local municipal corporation. This action is taken to restrict the height of buildings in accordance with the land parcel's size. 

Factors like the open space availability, population density, adaptability to a natural calamity and environmental impact determine the area's FAR. To define it in simple words, it is the load of a particular land parcel that the land can bear safely. It varies on the use of different lands, namely industrial, agricultural, commercial, or residential. 

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Importance of FAR for Homebuyers

The floor area ratio is a major aspect of the development of a locality, town, and area. It is also important from an environmental point of view too. Higher floor ratios imply more floors and a denser congregation of buildings in a particular area. Areas that have a high floor ratio also have lesser open spaces. 

The municipal corporations are responsible for determining the floor area ratio which should generally not exceed 2.5. Authorities need to get the checks done as builders have started to accommodate the common amenities in the building complexes. These include swimming pools, gardens, parks, and gyms, the expenses for which are partly paid by the complex's residents.

As developers and builders are bound to make more money with a greater floor area, they are in for more benefit than homebuyers having a higher floor area ratio. However, homeowners get a lower resale value when they sell off their homes in buildings with a greater floor area ratio. 

What is the Gross Floor Area?

The Gross Floor Area (GFA) is basically the complete built-up area of a building which also includes the external walls. The Gross Floor Area is a vital component while calculating the FAR. It is not the same as the net floor area which is the actual occupied area and excludes stairways, closets, corridors, and mechanical rooms. 

Given below is the list of the elements that are included and excluded from the Gross Floor Area. 

Included in GFA	Excluded in GFA
Lobbies	Exterior spaces
Common area and Tenant area	Balconies
Meeting rooms	Patios
Mechanical equipment area	Parking space
Basement and Stairwell	Covered driveways and walkways
Storage rooms and Laundry	Attics
Restrooms	Outdoor courts (Badminton, Tennis)
Atriums	Shaft area

How to Calculate Floor Area Ratio?

The FSI or FAR is the ratio of the aggregate area of total floors in a particular building to the land size on which the building exists. The formula for calculating FAR is - 

Floor area ratio = Total enclosed area across floors of buildings or Gross Floor Area or built-up area / Area of the plot

Let us understand the formula with an example.

If the Gross Floor Area of a building that sprawls across three floors is 400 sq m and the area of the plot is 200 sq m then the

FAR = 400/200 = 2

An FSI of 2 reveals that the building's total floor area is two times the plot's gross area on which it is constructed. Likewise, on a 100 sq m plot, an FSI of 1 means that the builder can construct 1 x 100 sq m of built space. 

Now, let's assume the developer builds 40 sq m on the ground floor, 40 sq m on the foremost floor, then the last 20 sq m has to be constructed on the second floor as the complete built floor space must not be more than 100 sq m. 

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Advantages of Floor Area Ratio

There are numerous advantages of keeping a check on the floor area ratio by the authorities. It keeps the builder's unscrupulous misuse of the floor areas under control. It also mitigates the high rises, maintains the quality and safety of the buildings, and the buildings will eventually have lesser floors. 

Stringent enforcement of floor area ratio ensures a minimum illegal inclusion of new floors in buildings and unauthorised construction. A lower floor area ratio enables a balance between open spaces and built areas. 

FAR Violations

Violating the floor area ratio is an offense. The violations are identified when a developer or builder hands over the completion certificate. Homebuyers are recommended to go through the builder's completion certificate before accepting the handover of their homes or apartments. If this precaution is overlooked it might lead to the project getting held up if the authorities point to a violation. 

Effect of FAR on Property Prices

Although, the majority of homebuyers are of the opinion that FAR has an influence on property prices, but in reality, it is not the case. If the FAR of a piece of land is more than a minimal FAR then, it impacts the profitability of the project for developers. In this way, the builder is able to construct a higher number of units on a particular land. 

Overall, the FAR is equally important for homebuyers and developers. The builders are required to abide by the decided FAR to stray away from violations and other consequences. Homebuyers have to keep in mind the FAR to ascertain the project density prior to making a decision. 

Floor Area Ratio Exceptions

There are numerous exceptions to the floor area ratio. These include common construction areas such as play courts, parking spaces, jogging tracks, and basements for parking. Interior spaces like attics and balconies are also included when the floor area ratio is calculated. 

Busting FAR Myths

High FAR properties are low in value is the most common myth related to FAR. The infrastructural costs increase with high FAR. However, there is no direct relationship with the property's value. It is believed that with the increase in the Floor Area Ratio, the cost for the developers can be reduced. However, it might result in some additional costs since a premium can be charged on the additional FSI or FAR. 

The absence of FAR affects developmental projects. In contradiction to the popular notion, there is no obstruction or hindrance in the construction of projects in which FAR is not mentioned. The reason is, the developers consider the project's overall health before they start the construction. 

Wrapping up!

Floor Area Ratio or FAR is a significant factor that affects both builders and homebuyers. Homebuyers must be aware of the land-to-build ratio before they take ownership of the designated space.