What Is Floor Area Ratio
Floor Area Ratio (FAR) is the total square footage of a building divided by the total square footage of the lot. A property with 50,000 square feet of building space on a 100,000 square foot lot has an FAR of 0.5. An office tower with 400,000 square feet of floor space on a 100,000 square foot lot has an FAR of 4.0.
In property tax assessment appeals, FAR matters because assessors use it as a benchmarking tool. When your building's FAR significantly exceeds the FAR of comparable properties in your neighborhood, assessors may justify higher per-square-foot values. Conversely, if your FAR is lower than comparable properties zoned for similar uses, you have grounds to challenge an inflated assessment.
Why FAR Affects Your Assessment
Assessors treat high-FAR properties differently than low-FAR properties because building density directly influences market value. A 10-story office building generates more rental income per lot than a 3-story building on the same sized land. This density premium gets reflected in comparable sales analysis.
However, many assessors misapply FAR when selecting comparables. They may compare your property to sales of properties with different FARs without adjusting for that difference. In a board of review hearing, you can challenge this by showing that comparable sales should have similar FARs within 0.2 to 0.3 points to be truly comparable. If the assessor's comparables have FARs of 2.5 while your property has an FAR of 1.8, that sale price adjustment should reflect the density difference.
How FAR Works in Assessment Appraisals
Assessors typically calculate FAR first, then use it to screen comparable properties:
- The assessor determines your property's total floor area by reviewing building permits, addition records, or physical measurement. This includes all stories but typically excludes parking garages and mechanical rooms depending on jurisdiction rules.
- The assessor divides total floor area by the lot size from the deed or county records to establish your FAR.
- When searching for comparable sales, the assessor filters for properties with similar FARs. In retail markets, comparables should ideally fall within 0.2 FAR points. In office markets, the range may be tighter at 0.15 FAR points.
- If the assessor's comparable sales have significantly different FARs, request a line-item adjustment. Most appraisal software applies 0.5% to 2% value adjustment per 0.1 FAR variance.
Common Questions
- Does FAR limit what I can build on my property? Zoning codes set maximum FAR limits for each zone. If your lot is zoned with a 2.0 FAR maximum and you build to that limit, the assessor cannot penalize you with a higher valuation simply for using your zoning rights. At a board of review hearing, emphasize that your building meets but does not exceed zoning allowances.
- Can I appeal my assessment if my FAR is lower than comparable properties? Yes. If comparables have higher FARs, they likely sold at higher per-square-foot prices because of density premium. Request the assessor adjust downward for the FAR difference, typically 0.5% to 1% per 0.1 point of FAR variance.
- Does parking garage space count toward FAR? Most jurisdictions exclude parking garages from FAR calculations, though rules vary. Check your local assessor's appraisal manual or ask during discovery before a board of review hearing.
Related Concepts
- Zoning sets the maximum FAR allowed on your property and directly constrains what you can build.
- Highest And Best Use analysis relies on FAR calculations to determine whether a property is being used at its economic potential.