I think there are limits on both. Floor area ratio (https://en.wikipedia.org/wiki/Floor_area_ratio) is how it is coded into regulations. The lot size and the height restrictions create a bounding box that the building needs to fit within.

Common in NYC to do that to say you have the tallest building by height even if you were only approved to build X floors (your service floors don’t count) — from the couple videos I’ve watched about it over the years (see 432 Park Ave).