An Explainer: FSI

Floor space index (FSI) is the ratio of the area of floor to the area of the plot on which a building stands. In some cities, FSI is known as floor area ratio (FAR) .

PropGuide Explains FSI Most countries regulate the floor space index to restrict the height of buildings. Such regulations are imposed as a part of land use policy. Zoning regulations divide a city in to different zones, in which different categories of “land use” and “building heights” are permitted. For example, if FSI is 2, the ratio of the area of floor to the area of the plot would be 2. This means that the floor area of a building built on a 1,000 sq ft land should not exceed 2,000 sq ft. Builders often utilise the maximum floor area allowed by building additional floors.

When the government imposes FSI restrictions on a city, developers cannot construct buildings taller than what regulations permit. Economists see building height restrictions as the single biggest reason why homes are not affordable. If FSI restrictions did not exist, builders would have been able to easily build additional floors in real estate developments. The cost of building an extra floor in a skyscraper is often much lower than the cost of the land on which, the skyscraper stands. For instance, it is estimated that the cost of adding one square foot on the top of a Manhattan skyscraper is $ 400.

The Indian government, however, allows higher FSI along metro transit corridors in some cities. Developers can also obtain a higher FSI, in some cities by paying a premium.

FSI regulations in India are among the most stringent. In most Indian cities, FSI ranges between 1 and 2. But, in Mumbai, the maximum FSI is 4.5. In every major Asian city, FSI ranges between 5 and 20. In Shanghai, for instance, the maximum FSI is 13.1. While, the maximum FSI in New York and Manhattan is 15. Check out PropGuide's comprehensive guide to real estate terms here.

Also Read: Understanding Floor Area Ratio In Detail