What is the difference between the floor area ratio and air rights?

Every zoning district has a unique floor area ratio (FAR), which is the ratio of total building area to the total zoning lot area. Multiplying a zone’s FAR by a lot’s total area gives the maximum floor area the lot may have.  For instance, a 20,000 foot lot in a district with a FAR of 1.0 may use up to 20,000 square feet of floor area, but 50,000 square feet of floor area if the district’s FAR is 5.

Not all buildings may use all of the space allotted to them by the FAR.  In this case, the unused floor area is deemed “transferable development rights” or “air rights” and can be sold to other lots.