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Real Estate Math Essentials
Lesson 4·7 min read

Zoning Density: FAR, PSO, and Building Computations

Master Floor Area Ratio (FAR), Percentage of Site Occupancy (PSO), setback requirements, and building height computations. Essential math for property development feasibility.

Floor Area Ratio (FAR) Computation

“Floor Area Ratio (FAR) shall be the ratio of the Gross Floor Area (GFA) of a building to the Total Lot Area (TLA). FAR shall be used as the principal measure for regulating building bulk and density. Maximum FAR = GFA / TLA. The allowable FAR for each zone shall be specified in the zoning ordinance.”

HLURB/DHSUD Revised National Zoning Guidelines, Rule V·Revised National Zoning GuidelinesSource

What This Means

Floor Area Ratio (FAR) determines how much total building area you can construct relative to your lot size. Formula: Maximum GFA = Lot Area × FAR. Example: a 500 sqm lot with FAR 3.0 allows up to 1,500 sqm of gross floor area. You can distribute this vertically. 5 floors × 300 sqm each, or 10 floors × 150 sqm each. FAR varies by zone: low-density residential (FAR 1.0-1.5), medium-density (FAR 2.0-3.0), commercial (FAR 4.0-8.0), CBD (FAR 10.0+). Developers use FAR to determine maximum building size and project feasibility.

  • Formula: Maximum GFA = Lot Area × FAR
  • FAR limits TOTAL building bulk, not height directly
  • Low-density residential: FAR 1.0-1.5 (small buildings)
  • Commercial: FAR 4.0-8.0 (mid/high-rise possible)
  • CBD/mixed-use: FAR 10.0+ (skyscrapers)

Real-World Scenario

A developer owns a 1,000 sqm lot zoned as C-2 Commercial with a FAR of 5.0. They want to build a 12-story office building with 450 sqm of floor area per floor.

Does this building comply with the FAR limit?

Percentage of Site Occupancy (PSO)

“The maximum Percentage of Site Occupancy (PSO) or Maximum Building Footprint shall be the maximum percentage of the lot area that may be covered by the building at ground level. The remaining area shall be kept as open space for setbacks, parking, landscaping, or other open space requirements.”

Rule VIII, PD 1096 IRR (National Building Code)·National Building Code of the PhilippinesSource

What This Means

PSO determines the maximum ground coverage. how much of the lot the building footprint can occupy. Formula: Building Footprint = Lot Area × PSO. The remaining area (100% - PSO) is mandatory open space for setbacks, parking, driveways, and landscaping. Common PSO limits: residential (60-70%), commercial (80-90%), industrial (70-80%). PSO and FAR work together: PSO limits horizontal spread, FAR limits total building volume. A high FAR with low PSO means you must build UP (tall and skinny), not OUT (wide and squat).

  • Formula: Max Building Footprint = Lot Area × PSO
  • Open Space = Lot Area × (1 - PSO). must remain unbuilt
  • Residential: typically 60-70% PSO
  • Commercial: typically 80-90% PSO
  • PSO + FAR together determine building shape and height

Real-World Scenario

A 500 sqm residential lot has the following restrictions: PSO = 60%, FAR = 2.0, maximum height = 12 meters (approximately 4 stories). A homeowner wants to maximize their building.

What is the maximum building configuration allowed?

Building Setback Computations

“The minimum setback requirements for buildings shall be as follows: The required setback from the property line shall be measured at right angles to the lot boundary. No part of any building shall be erected within the required setback area. The specific setback distances shall be prescribed by the local zoning ordinance or, in its absence, the National Building Code standards.”

Section 708, PD 1096 IRR (National Building Code)·National Building Code of the PhilippinesSource

What This Means

Setbacks are mandatory distances between the building and property boundaries. They ensure light, ventilation, fire safety, and access. Standard minimum setbacks (vary by zone and building height): Front. 3-5m, Side. 2-3m, Rear. 2-3m. For taller buildings, setbacks increase. The buildable area after setbacks determines the actual footprint: Buildable Area = (Lot Width - Left Setback - Right Setback) × (Lot Depth - Front Setback - Rear Setback). For irregular lots, each boundary requires its own setback computation.

  • Front setback: typically 3-5m from the road/front boundary
  • Side setbacks: typically 2-3m from each side boundary
  • Rear setback: typically 2-3m from the back boundary
  • Buildable area = area remaining after all setbacks are applied
  • Taller buildings require larger setbacks (stepped back at higher floors)

Real-World Scenario

A rectangular lot is 15m wide × 25m deep (375 sqm). The zoning requires: front setback 5m, side setbacks 3m each, rear setback 3m. The PSO is 60% and FAR is 2.0.

What is the maximum building footprint considering setbacks?

Frequently Asked Questions

What happens if my existing building exceeds the current FAR or PSO limit?

Existing buildings built before the current zoning ordinance took effect are typically "grandfathered" as non-conforming uses/structures. They can continue to exist but usually cannot be expanded, altered significantly, or rebuilt if demolished/destroyed beyond 50%. If you want to renovate or add floors, you must comply with the current FAR and PSO limits. Check your LGU's zoning ordinance for specific non-conforming structure rules.

How do basements and parking floors affect FAR computation?

Rules vary by LGU, but generally: basements used for parking are NOT counted in GFA/FAR (they are below grade). Above-ground parking floors may or may not be counted. some LGUs exclude "dedicated parking floors" from GFA computation. Mechanical floors (for HVAC, water tanks) are typically excluded if they are not habitable. Always verify with the local zoning/building office which areas are FAR-exempt in your jurisdiction.

What is the relationship between number of floors and building height in meters?

Standard floor-to-floor height: residential = 2.7-3.0m, commercial/office = 3.5-4.0m, retail ground floor = 4.5-6.0m. So a 10-story residential building is approximately 30m tall, while a 10-story commercial building might be 40m. Zoning ordinances may limit height in METERS (not floors), so the same height limit allows more residential floors than commercial floors. Always check both the floor limit AND the meter limit. whichever is more restrictive controls.

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