[Beginner's Guide] Floor Area Ratio? Building Coverage Ratio?... Do You Know What Kind of Land Your Home Is On?

[Asia Economy Reporter Lee Chun-hee] When you become a real estate reporter, you sometimes get unexpected KakaoTalk messages from friends. "How do I apply for a housing subscription?" "What does first priority mean?" For the 2030 'Burin-i (real estate + beginner)' who only have subscription savings accounts created by their parents when they were young, I am trying to create a guide.

Last July, the 'Cheongnyangni Station Lotte Castle SKY-L65' in Jeonnong-dong, Dongdaemun-gu, Seoul, which went on sale, is planned to be built as a super high-rise building about 200 meters tall. While some buildings are constructed as super high-rises like this, if you buy land to build rental studio apartments, you may only be allowed to build up to three floors.

This difference is due to the floor area ratio (FAR). FAR refers to the ratio of the total floor area to the site area. The total floor area is the sum of the floor areas of each floor of the building. For example, if a building is constructed on a 100㎡ site with 50㎡ on the first floor, 50㎡ on the second floor, and 40㎡ on the third floor, totaling 140㎡ of floor area, the FAR of this building is 140%. Parking areas on above-ground floors and basement floor areas are excluded from FAR calculations. The FAR of Cheongnyangni Station Lotte Castle SKY-L65 reaches an astonishing 995.67%.

The key criterion that determines FAR is the 'zoning district.' The land use is designated as residential areas primarily for housing, commercial areas mainly for commercial buildings, industrial areas for factories, etc. In Seoul, for example, the FAR for general residential areas is set at a maximum of 250% for the third-class general residential district. For general commercial areas, it can go up to 800%.

However, if various special conditions set by the government are met, construction with a higher FAR is possible. Although Cheongnyangni Station Lotte Castle SKY-L65 was built in a general commercial area, it was able to exceed the 800% FAR through such procedures.

▲ Floor area ratio within the designated use districts of each area in Seoul as stipulated in Article 55 of the 'Seoul Metropolitan City Urban Planning Ordinance' (Provided by the National Law Information Center)

FAR is important because it is a key factor in assessing profitability during apartment reconstruction. Many older apartments, even if built in a third-class general residential district where FAR up to 250% is allowed, were constructed as low-rise buildings with FAR only around 120%.

Therefore, older low-rise apartments are considered to have high profitability for reconstruction, while there is also concern that recently built high-rise apartments may become impossible to reconstruct after several decades due to aging.

Another important factor when constructing buildings is the building coverage ratio (BCR). BCR is the ratio of the building area to the site area, and the standard here is the floor area of the first floor. For the previously mentioned building on a 100㎡ site with 50㎡ on the first and second floors and 40㎡ on the third floor, the BCR is 50%. BCR is also regulated by relevant laws.

▲ Floor area ratio within the designated use districts of each area in Seoul as stipulated in Article 54 of the 'Seoul Metropolitan City Urban Planning Ordinance' (Provided by the National Law Information Center)

Combining BCR and FAR determines how a building can be constructed on the land. For example, if you build on a 100㎡ site in a third-class general residential district, the first-floor area can only be up to 50㎡. If built this way, with a FAR of 250%, you can build five floors each with 50㎡. If you reduce the first-floor area to 40㎡, you can add 10㎡ on the 6th and 7th floors.

However, you cannot build freely. While there are special exceptions that increase FAR depending on the situation, various regulations may determine the building’s shape or apply a lower FAR than the regulation. A representative example is sunlight rights. Buildings in residential areas must be constructed so as not to infringe on the 'right to sunlight' of buildings located further north. This is why buildings tend to be built in a stepped or slanted shape as they rise.

Before constructing or trading buildings, you must carefully check all these construction restrictions. All related information can be clearly found by entering the land address into the Land Use Regulation Information Service 'LURIS' operated by the Ministry of Land, Infrastructure and Transport.