UNIT 8: - Dawson County, Montana
Contents
1. Interior Gutted amp Renovated BFE apenn s 1ft Block Foundation Added To ve Grade Bring Structure Above BFE Figure 8 3 substantially rehabilitated building elevated above the BFE In A Zones elevation may be on fill crawlspace columns etc In V Zones only pil ings columns or other open foundations are allowed The new structure would benefit from post FIRM flood insurance rates Substantial Improvement Damage 8 11 Example 3 Lateral addition residential Additions are improvements that increase the square footage of a structure Commonly this includes the structural attachment of a bedroom den recreational room garage or other type of addition to an existing structure Note that if one building is attached to another through a covered breezeway or similar connec tion it is a separate building and not an addition When an addition is a substantial improvement the addition must be elevated or floodproofed providing that improvements to the existing structure are mini mal Figures 8 4 and 8 5 illustrate lateral additions that are compliant Depending on the flood zone and details of the project the existing building may not have to be elevated The determining factors are the common wall and what improvements are made to the existing structure If the common wall is demolished as part of the project then the entire structure must be elevated If only a doorway is knocked through it and only minimal2. cost of the repairs must include all costs necessary to fully repair the structure to its before damaged condition If equal to or greater than 50 percent of that structure s market value before damage then the structure must be elevated or floodproofed if it is nonresiden tial to or above the level of the base flood and meet other applicable local ordinance requirements This is the basic requirement for substantial damage Figure 8 11 graphically illustrates the amount of damage that can occur to a building flooded only four feet deep Even though the structure appears sound and there are no cracks or breaks in the foundation the total cost of repair can be significant The cost of repair after a flood that simply soaked the building will typically include the following structural items Remove all wallboard and insulation Install new wallboard and insulation Tape and paint Remove carpeting and vinyl flooring Dry floor replace warped flooring Replace cabinets in the kitchen and bathroom Replace built in appliances Replace hollow core interior doors Replace furnace and water heater Clean and disinfect duct work Repair porch flooring and front steps Clean and test plumbing licensed plumber may be required Replace outlets and switches clean and test wiring licensed electrician may be required Note See also Figures 7 7 through 7 12 for what happens to
3. flood insurance premiums if a substantially damaged building is granted a variance and is not brought up to post FIRM standards Substantial Improvement Damage 8 21 fd i Figure 8 11 Even slow moving floodwater can cause substantial damage SUBSTANTIAL DAMAGE SOFTWARE FEMA has developed a software program to help local officials make substan tial damage determinations The software is based on Microsoft Access but is self contained and does not require any software in addition to a Windows operat ing system The software comes with a manual Guide on Estimating Substantial Damage Using the NFIP Residential Substantial Damage Estimator FEMA 311 This includes a user s manual and worksheets that allow the calculations to be done manually Contact your FEMA Regional Office for a copy of the software package and help in using it Following a major disaster declaration training sessions and technical assistance may be available INCREASED COST OF COMPLIANCE On June 1 1997 the NFIP began offering additional coverage to all holders of structural flood insurance policies This coverage is called Increased Cost of Compliance or ICC The name refers to cases where the local floodplain management ordinance requires elevation or retrofitting of a substantially damaged building Under ICC the flood insurance policy will not only pay for repairs to the flooded building it Substantial Improvement Damage 8 22 will pay up to
4. 03 This language is only needed to trigger an ICC payment for a repetitive loss No ordinance changes are needed for the ICC coverage for substantial damage Substantial Improvement Damage 8 24 C SPECIAL SITUATIONS As explained in previous sections the substantial improvement and substantial damage requirements affect all buildings regardless of the reason for the im provement or the cause of the damage There are three special situations you should be aware of exempt costs historic buildings and corrections of code violations EXEMPT COSTS Certain costs related to making improvements or repairing damaged buildings do not have to be counted toward the cost of the improvement or repairs These include Plans and specifications Surveying costs Permit fees Demolition or emergency repairs made for health or safety reasons or to prevent further damage to the building Improvements or repairs to items outside the building such as the drive way fencing landscaping and detached structures HISTORIC STRUCTURES Historic structures are exempted from the substantial improvement require ments subject to the criteria listed below The exemption can be granted administratively if the current NFIP definitions of substantial improvement and historic structure are included in your ordinance or they can be granted through a variance procedure In either case they are usually granted subject to conditions If the im
5. 30 000 to help cover the additional cost of complying with the ordinance This is available for any flood insurance claim and therefore is not dependent on the community receiving a disaster declaration There are some limitations to ICC It s only available if there was a flood insurance policy on the building be fore the flood It covers only damage caused by a flood Claims are limited to 30 000 per structure Claims must be accompanied by a substantial damage determination by the floodplain ordinance administrator It should also be mentioned that a portion of the rest of the claim payment may help meet the cost of bringing the building up to code For example if there was foundation damage the regular claim will pay for the cost of repairing or replacing the foundation The ICC funds would only be needed for the extra costs of raising the foundation higher than it was before An ICC claim cannot be paid unless the community has determined the build ing to be substantially damaged and requires that the building comply with local ordinance requirements For further information on how ICC coverage works and how you can help policyholders in your community qualify for the coverage refer to National Flood Insurance Program s Increased Cost of Compliance Coverage Guidance for State and Local Officials FEMA 301 In certain cases an ICC claim can be filed if the building is repetitively flooded and has had two or more cla
6. Elevating the lowest floor of an addition to or above the BFE with the change in floor elevation disguised externally CORRECTIONS OF CODE VIOLATIONS The NFIP definition of substantial improvement includes another exemption 44 CFR 59 1 Definitions Substantial improvement means The term does not however include Any project for improvement of a structure to correct ex isting violations of state or local health sanitary or safety code specifications which have been identified by the local code enforcement official and which are the minimum necessary to assure safe living conditions Note the key words in this exemption correct existing violations identified by the local official and minimum necessary to assure safe conditions This language was included in order to avoid penalizing property owners who had no choice but to make improvements to their buildings or face condemnation or revocation of a business license This exemption was intended for involuntary improvements or violations that existed before the improvement permit was applied for or before the damage occurred for example a restaurant owner who must upgrade the wiring in his kitchen in order to meet current local and state health and safety codes You can only exempt the items specifically required by code For example if a single stair tread was defective and had to be replaced do not exempt the cost of rebuilding the entire stairway Similarly co
7. UNIT 8 SUBSTANTIAL IMPROVEMENT AND SUBSTANTIAL DAMAGE In this unit This unit covers The substantial improvement rule how to regulate major addi tions and other improvements to buildings in the floodplain The substantial damage rule how to regulate reconstruction and repairs to buildings that have been severely damaged Exceptions to the basic rules for some special cases Substantial Improvement Damage 8 1 Contents Introductio ceric ccs nnen Sin e eas atucua a aa aa a Ea 8 3 A Substantial Improvement esseeseseesseesseesseesseesesersseersseesseesserssereseeeeseeesseesse 8 4 PTO SC USAIN CCL a ut ra e e E E E A E E Oe at AG 8 4 Post FIRM buildings eeeeeseeeeeenssessseeessseesseesseesseesseeessseesseesseesseeeseeesseee 8 5 The Formula sssiecsn oien a R R R n E 8 5 Market alie ea deans otin te deicuasand incu a e taut canta a anes 8 6 Substantial Improvement Examples 0 cecceceeeeecseceeceeececeeeeeesneeeeseeeenaees 8 10 Example 1 Minor rehabilitation cee ceesceceseceeseececeeeeeesneeeenseeeeees 8 10 Example 2 Substantial rehabilitation cee eeeeececeeeeeeeseeeeeteeeeneeeenes 8 11 Example 3 Lateral addition residential 0000 0 eeeeeecceeeseceeeteeeenteeeenes 8 12 Example 4 Lateral addition nonresidential 0 sees eeeeeeseeeteeeeeeee 8 13 Example 5 Vertical addition residential cceeecceeeseeeesteceenteeeenes 8 14 Example 6 Vertical additio
8. built You can t allow a compliant building to become noncompliant by allowing additions at grade If a new higher BFE has been adopted since the building was built additions that are substantial improvements must be elevated to the new BFE THE FORMULA A project is a substantial improvement if Cost of improvement project gt 50 percent Market value of the building For example if a proposed improvement project will cost 30 000 and the value of the building is 50 000 30 000 0 6 60 percent 50 000 The cost of the project exceeds 50 percent of the building s value so it is a substantial improvement The floodplain regulations for new construction apply and the building must meet the post FIRM construction requirements If the project is an addition only the addition has to be elevated see the examples later in this section The formula is based on the cost of the project and the value of the building These two numbers must be reviewed in detail Substantial Improvement Damage 8 5 Project cost The cost of the project means all structural costs including all materials labor built in appliances overhead profit repairs made to damaged parts of the building worked on at the same time A more detailed list is included in Figure 8 1 To determine substantial improvement you need a detailed cost estimate for the project prepared by a licensed general contractor professional construct
9. cal addition nonresidential When the proposed substantial improvement is a full or partial second floor the entire structure must be elevated or floodproofed Figure 8 7 The owner could obtain post FIRM rates on the building if it is floodproofed to one foot above the BFE and he has a floodproofing certificate signed by a registered engineer An optional approach is to elevate the entire building and obtain an elevation certificate PLANNED VERTICAL ADDITION Walls of Ast Floor uppo n oO PPidanon 7 Watertight Flood Barrier Structure Must be Existing Structure Not Floodproofed Originally NOTE Design May Require Reinforcement of Walls and Floor Slab Figure 8 7 Vertical addition to a nonresidential building in an A Zone The new floodproofed structure would benefit from post FIRM flood insurance rates Substantial Improvement Damage 8 15 Example 7 Post FIRM building minor addition ALL additions to post FIRM buildings are defined as new construction and must meet the requirements of your floodplain management ordinance regardless of the size or cost of the addition Figure 8 8 A small addition to a residential structure that is not a substantial improvement must be elevated at least as high as the BFE in effect when the building was built Minor additions to nonresidential structures can be floodproofed to the BFE If a map revision has taken place and the BFE has increased only a
10. dditions that are substantial improvements have to be elevated to the new BFE or flood proofed nonresidential buildings only va Post FIRM Structure All Improvements to Post FIRM Structures MUST Meet Current Requirements Regardless of Size or Cost Substantial Improvemen Figure 8 8 Small additions to post FIRM buildings must be elevated Substantial Improvement Damage 8 16 Example 8 Post FIRM building substantial improvement Substantial improvements made to a post FIRM structure must meet the re quirements of the current ordinance Figure 8 9 shows a lateral addition made after a map revision took place and the BFE was increased Lateral Addition Substantial Improvement NEW BFE In Effect Figure 8 9 Substantial improvements to post FIRM buildings must be ele vated above the new BFE Nonresidential buildings may be floodproofed Substantial Improvement Damage 8 17 B SUBSTANTIAL DAMAGE 44 CFR 59 1 Definitions Substantial damage means damage of any origin sustained by a structure whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred Two key points The damage can be from any cause flood fire earthquake wind rain or other natural or human induced hazard The substantial damage rule applies to all buildings in a flood hazard ar
11. e For the purposes of determining substantial improvement market value per tains only to the structure in question It does not pertain to the land landscaping or detached accessory structures on the property Any value resulting from the Substantial Improvement Damage 8 6 location of the property should be attributed to the value of the land not the build ing Substantial Improvement Damage 8 7 Items to be included All structural elements including Spread or continuous foundation footings and pilings Monolithic or other types of concrete slabs Bearing walls tie beams and trusses Floors and ceilings Attached decks and porches Interior partition walls Exterior wall finishes brick stucco siding including painting and mold ings Windows and doors Reshingling or retiling a roof Hardware All interior finishing elements including Tiling linoleum stone or carpet over subflooring Bathroom tiling and fixtures Wall finishes drywall painting stucco plaster paneling marble etc Kitchen utility and bathroom cabinets Built in bookcases cabinets and furniture Hardware All utility and service equipment including HVAC equipment Plumbing and electrical services Light fixtures and ceiling fans Security systems Built in kitchen appliances Central vacuum systems Water filtration conditionin
12. ea regardless of whether the building was covered by flood insurance The formula is essentially the same as for substantial improvements Cost to repair gt 50 percent Market value of the building Market value is calculated in the same way as for substantial improvements Use the pre damage market value COST TO REPAIR Notice that the formula uses cost to repair not cost of repairs The cost to repair the structure must be calculated for full repair to the building s before damage condition even if the owner elects to do less It must also include the cost of any improvements that the owner has opted to include during the repair project The total cost to repair includes the same items listed in Figure 8 1 As shown in Example 2 below properly repairing a flooded building can be more expensive than people realize The owner may opt not to pay for all of the items needed The owner may Do some of the work such as removing and discarding wallboard Obtain some of the materials free Have a volunteer organization such as the Mennonites do some of the work Decide not to do some repairs such as choosing to nail down warped flooring rather than replace it Substantial Improvement Damage 8 18 Basic rule Substantial damage is determined regardless of the actual cost l to the owner You must figure the true cost of bringing the build ing back to its pre damage condition using qualified labor and
13. ehabilitation project Central air conditioning was installed and the electrical system was upgraded The value of the building before the project was 60 000 The value of the project was 12 000 12 000 0 2 20 percent The project costs less than 50 percent of the 60 000 building so this is not a substantial improvement Figure 8 2 Minor rehabilitations use flood resistant methods and materials Neither structure would benefit from post FIRM flood insurance rates because they are not elevated Note To gauge what happens to flood insurance premiums if a substantially improved building is not brought up to post FIRM standards see Figures 7 7 through 7 12 Substantial Improvement Damage 8 10 Example 2 Substantial rehabilitation If the rehab costs more than 50 percent of the value of the building your ordi nance requires that an existing structure be elevated and or the basement filled to meet the elevation standard Figure 8 3 shows a building that has been allowed to run down It s market value is 35 000 To rehab it will require gutting the interior and replacing all wallboard built in cabinets bathroom fixtures and furnace The interior doors and flooring will be repaired The house will get new siding and a new roof The cost of this rehab will be 25 000 25 000 71 4 percent Because total cost of the project is greater 35 000 than 50 the rehab is a substantial improvement Rehabilitated
14. es used for tax assessment purposes with an adjustment rec ommended by the tax appraiser to reflect current market conditions adjusted assessed value The value of buildings taken from NFIP claims data usually actual cash value Qualified estimates based on sound professional judgment made by the staff of the local building department or tax assessor s office Some market value estimates are often used only as screening tools i e NFIP claims data and property appraisals for tax assessment purposes to identify those structures where the substantial improvement ratios are obviously less than or greater than 50 percent i e less than 40 percent or greater than 60 percent For structures that fall in the 40 percent to 60 percent range more precise market value estimates are sometimes necessary Substantial Improvement Damage 8 9 SUBSTANTIAL IMPROVEMENT EXAMPLES Example 1 Minor rehabilitation A rehabilitation is defined as an improvement made to an existing structure which does not affect the external dimensions of the structure If the cost of the rehabilitation is less than 50 percent of the structure s market value the building does not have to be elevated or otherwise protected However it is advisable to incorporate methods to reduce flood damage such as use of flood resistant materials and installation of electrical heating and air conditioning units above the BFE Figure 8 2 shows a building that had a small r
15. finishing is done then only the addition has to be elevated In A Zones only if significant improvements are made to the existing struc ture such as a kitchen makeover both it and the addition must be elevated and otherwise brought into compliance Some states and many communities require that both the existing structure and lateral additions be elevated in all cases In V Zones the existing structure always has to be elevated placed on an en gineered foundation system etc when an addition is proposed that constitutes a substantial improvement This is due to the free of obstruction standard whereby the lower existing structure would obstruct the storm surge causing damage to the addition esstng Only isting Common all Retained Common Wall of No Interior Demolished Renovations f Existing Existing Structure a p a _ mn m oa n a a ADLAS Figure 8 4 Lateral additions to a residential building in an A Zone In V Zones the entire building must be elevated on pilings columns or other open foundations The structure on the left would not benefit from post FIRM flood insurance rates because it was not elevated Substantial Improvement Damage 8 12 Example 4 Lateral addition nonresidential A substantial improvement addition to a nonresidential building may be either elevated or floodproofed Otherwise all the criteria for residential buildings reviewed in Example 3 mus
16. fore the start of construction of the improvement This section provides information on determining whether a building has been substantially improved and on what NFIP requirements apply PROJECTS AFFECTED All building improvement projects worthy of a permit must be considered These include Remodeling projects Rehabilitation projects Building additions Repair and reconstruction projects these are addressed in more detail in Section B on substantial damage If your community does not require permits for say reroofing minor mainte nance or projects under a certain dollar amount then such projects are not subject to the substantial improvement requirements However if you have a larger pro ject that includes reroofing etc then it must include the entire cost of the project One problem you may face is a builder trying to avoid the requirement by ap plying for a permit for only part of the job and then later applying for another permit to finish the work If both applications are together worth more than 50 of the value of the building the combined project should be considered a substan tial improvement and subject to the rules FEMA requires that the entire improvement project be counted as one In or der to help you enforce this you may want to count all applications submitted over say one year as one project Check with your attorney on whether your ordinance clearly gives you the authority to do
17. g or recirculation systems Cost to demolish storm damaged building components Labor and other costs associated with moving or altering undamaged building components to accommodate improvements or additions Overhead and profits Items to be excluded Plans and specifications Survey costs Permit fees Post storm debris removal and clean up Outside improvements including Landscaping Sidewalks Fences Yard lights Swimming pools Screened pool enclosures Detached structures including garages sheds and gazebos Landscape irrigation systems Figure 8 1 Items included in calculating cost of the project Substantial Improvement Damage 8 8 Acceptable estimates of market value can be obtained from these sources e An independent appraisal by a professional appraiser The appraisal must exclude the value of the land and not use the income capitalization ap proach which bases value on the use of the property not the structure Detailed estimates of the structure s actual cash value the replacement cost for a building minus a depreciation percentage based on age and condition For most situations the building s actual cash value should ap proximate its market value Your community may prefer to use actual cash value as a substitute for market value especially where there is not suffi cient data or enough comparable sales Property valu
18. ims averaging 25 or more of building value within a ten year period provided the community has language in the flood damage ordinance that implements the substantial damage rule in these cases Figure 8 12 has example ordinance language This language exceeds the minimum NFIP requirements but would be needed if you wanted to trigger the ICC provision for repetitively damaged buildings The Community Rating System credits keeping track of improvements to enforce a cumulative substantial im provement requirement The 1999 CRS Coordinator s Manual credits the ordinance language in Figure 8 12 These credits are found under Activity 430 Section 431 c in the CRS Coordinator s Manual and the CRS Application NFIP CRS Substantial Improvement Damage 8 23 Option 1 A Adopt the Following Definition Repetitive Loss means flood related damage sustained by a structure on two separate occasions during a 10 year period for which the cost of repairs at the time of each such flood event on the average equals or exceeds 25 percent of the market value of the structure before the damage occurred B And modify the substantial improvement definition as follows Substantial Improvement means any reconstruction rehabilitation addition or other improvement of a structure the cost of which equals or exceeds 50 percent of the market value of the structure before the start of construction of the im provement This te
19. ion estimator or your office Your office must review the estimate submitted by the permit applicant To verify it you can use your professional judgment and knowledge of local and regional construction costs or you can use building code valuation tables pub lished by the major building code groups These tables can be used for determining estimates for particular replacement items if the type of structure in question is listed in the tables There are two possible exemptions you should be aware of 1 improvements to correct code violations do not have to be included in the cost of an improve ment or repair project and 2 historic buildings can be exempted from substantial improvement requirements These are explained in more detail later on Market value In common parlance market value is the price a willing buyer and seller agree upon The market value of a structure reflects its original quality subsequent improvements physical age of building components and current condition However market value for property can be different than that of the building itself Market value of developed property varies widely due to the desirability of its location For example two houses of similar size quality and condition will have far different prices if one is on the coast or in the best school district or closer to town than the other but the value of the building materials and labor that went into both houses will be nearly the sam
20. materials obtained at market prices The permit office and the owner may have serious disagreements over the to tal list of needed repairs and their cost as the owner has a great incentive to show less damage than actually occurred in order to avoid the cost of bringing the building into compliance Here are four things that can help you Get the cost to repair from an objective third party or undebatable source such as A licensed general contractor A professional construction estimator Insurance adjustment papers exclude damage to contents Damage assessment field surveys conducted by building inspection emergency management or tax assessment agencies after a disaster Your office Even if your office does not prepare the cost estimate it needs to review the estimate submitted by the permit applicant You can use your profes sional judgment and knowledge of local and regional construction costs Or you can use building code valuation tables published by the major building code groups Use an objective system that does not rely on varying estimates of market value or different opinions of what needs to be repaired The Substantial Damage Estimator Program discussed later in this section will do this Publicize the need for the regulations and the benefits of protecting build ings from future flooding A well educated public won t argue as much as one that sees no need for the requirement Help
21. n nonresidential eee eeeeeeeeeeseeeeeeeees 8 15 Example 7 Post FIRM building minor addition 0 0 0 0 eee eeeeeeeeeeee 8 16 Example 8 Post FIRM building substantial improvement 8 17 B Substantial Dania ce heinesen gest S igs E 8 18 MSE EG IRC AUD EEE AE E Ses at ees we 8 18 Substantial Damage Examples j ccissesccsacissiesssesicesasesddessecedatasessacevsnsdcavaness 8 20 Example 1 Reconstruction of a destroyed building eee eeeeeeeeee 8 20 Example 2 Substantially damaged structure eescceeeseceeeseceenteeeenes 8 21 Substantial Damage Software wv ccsscevesaszevsticcsneestcdearencseacatovagaseasudaeeonndesed ones 8 22 Increased Cost of Compliance cs 2sccgsiseceaneccchestscdaneqeimcaicdumieass 8 22 CoSpecial Situations onein e a E E a E A 8 25 FAR CTIPU C OSUS 4 5 Pistone eie e oria a aes eas ae t gar i aas 8 25 Hi toric Str ct res recse n i otote iosa n ai EE R D T i 8 25 Corrections of Code Violations igscscenonsdsacegesbe teases ace sacngah ete Qe 8 26 FEA TNAID E A E nce eee sau gets sac E E a aon aes met ees bs 8 27 Substantial Improvement Damage 8 2 INTRODUCTION In previous units we focused on the rules and regulations that prevent or re duce damage from floods to new buildings But what happens when the owner wishes to make an improvement such as an addition to an existing building What if a building is damaged by a fire flood or other cause Basic rule If the cost
22. nd emergency lighting e Widen the front door and install a ramp to make the business accessible to handicapped and mobility impaired people The total cost of these code requirements would be 8 000 However since these were required by the code before the fire occurred they would not have to be counted toward the cost to repair Based on the basic formula 45 000 0 45 or 45 The building is not declared 100 000 substantially damaged In this example the building can be repaired without elevating or floodproof ing However the permit office should strongly recommend incorporating flood protection measures and flood resistant materials in the repair project as in the example in Figure 8 2 Substantial Improvement Damage 8 27 Substantial Improvement Damage 8 28
23. of improvements or the cost to repair the damage exceeds 50 percent of the market value of the building it must be brought up to current floodplain management standards That means an existing building must meet the requirements for new construc tion People who own existing buildings that are being substantially improved will be required to make a major investment in them in order to bring them into com pliance with the law They will not be happy If the buildings have just been damaged they will be financially strapped and your elected officials will want to help them not make life harder for them For these reasons it is easy to see that this basic rule can be difficult to admin ister It is also the one time when your regulatory program can reduce flood damage to existing buildings That s why this course devotes this unit to adminis tering the substantial improvements and substantial damage regulations In this reference guide the term building is the same as the term structure in the NFIP regulations Your ordinance may use either term The terms are re viewed in more detail in Unit 5 Section E Substantial Improvement Damage 8 3 A SUBSTANTIAL IMPROVEMENT 44 CFR 59 1 Definitions Substantial improvement means any reconstruction rehabilitation addition or other improvement to a structure the total cost of which equals or exceeds 50 percent of the market value of the structure be
24. provements to a historic structure meet the following three criteria and are approved by the community the building will not have to be elevated or floodproofed It can also retain its pre FIRM flood insurance rating status 1 The building must be a bona fide historic structure Figure 7 13 has the definition that must be followed 2 The project must maintain the historic status of the structure If the proposed improvements to the structure will result in it being removed from or ineligible for the National Register or federally certified state or local inventory then the proposal cannot be granted an exemption from the substantial improve ment rule Substantial Improvement Damage 8 25 The best way to make such determinations is to seek written review and ap proval of proposed plans by the local historic preservation board if it is federally certified or by the state historic preservation office If the plans are approved you can grant the exemption If not no exemption can be permitted 3 Take all possible flood damage reduction measures Even though the exemption to the substantial improvement rule means the building does not have to be elevated to or above BFE or be renovated with flood resistant materials that are not historically sensitive many things can and should be done to reduce the flood damage potential Examples include Locating mechanical and electrical equipment above the BFE or flood proofing it
25. rm includes structures which have incurred repetitive loss or substantial damage regardless of the actual repair work performed Option 2 Modify the substantial damage definition as follows Substantial Damage means damage of any origin sustained by a structure whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the dam age occurred Substantial damage also means flood related damage sustained by a structure on two separate occasions during a 10 year period for which the cost of repairs at the time of each such flood event on the average equals or exceeds 25 percent of the market value of the structure before the damage oc curred NOTE 1 Communities need to make sure that these definitions are tied to the floodplain management requirements for new construction and substantial im provements and to any other requirements of the ordinance such as the permit requirements in order to enforce this provision NOTE 2 An ICC Claim Payment is ONLY made for flood related damage The substantial damage part of the definition must still include damage of any origin to be compliant with the minimum NFIP Floodplain Management Regulations Figure 8 12 Sample ordinance language for ICC repetitive loss definitions Source Increased Cost of Compliance Coverage Guidance for State and Local Officials FEMA 301 September 20
26. t be met If floodproofing is used the builder must ensure that the wall between the ad dition and the original building is floodproofed Floodproofing is not allowed as a construction measure in V Zones COMMON WALL A FLOODPROOFED Openings Designed m i Dry Floodprooted Impermeable Closures 1ft Above BFE Required to Retain Pre FIRM Rate A FEMA FOUR GRAPHIC Figure 8 5 Lateral addition to a nonresidential building in an A Zone This approach is not allowed in V Zones The structure would not benefit from post FIRM flood insurance rates because the original building was not elevated or flood proofed Substantial Improvement Damage 8 13 Example 5 Vertical addition residential When the proposed substantial improvement is a full or partial second floor the entire structure must be elevated Figure 8 6 In this instance the existing building provides the foundation for the addition Failure of the existing building would result in failure of the addition too Typically A Existing Roof is Demolished for Vertical OO jearen Addition P Vertical Addition Existing Structure Bottom of Lowest Horizontal Structural Member Elevated To or Above BFE BFE Elevation on Piles Columns Figure 8 6 Vertical addition to a residential building in a V Zone The new structure would benefit from post FIRM flood insurance rates Substantial Improvement Damage 8 14 Example 6 Verti
27. the owner find financial assistance to meet the extra cost of comply ing with the code If there was a disaster declaration there may be sources of financial assistance as discussed in the next unit If the owner had flood insurance and the building was substantially damaged by a flood the new Increased Cost of Compliance coverage will help see next section Substantial Improvement Damage 8 19 SUBSTANTIAL DAMAGE EXAMPLES Example 1 Reconstruction of a destroyed building Reconstructions are cases where an entire structure is destroyed damaged purposefully demolished or razed and a new structure is built on the old founda tion or slab The term also applies when an existing structure is moved to a new site Reconstructions are quite simply new construction They must be treated as new buildings H Reconstructed FEMA FOUR GRAPHIC Above Grade Razed or totaled building Reconstruction on with remaining foundation existing foundation Figure 8 10 A reconstructed house is new construction This example is for A Zones only A new building in the V Zone must be elevated on piles or columns Substantial Improvement Damage 8 20 Example 2 Substantially damaged structure To determine if a damaged structure meets the threshold for substantial dam age the cost of repairing the structure to its before damaged condition is compared to the market value of the structure prior to the damage The estimated
28. this and be sure to spell it out in the permit papers given to the applicant Some communities require that improvements be calculated cumulatively over several years All improvement and repair projects undertaken over a period of five years 10 years or the life of the structure are added up When they total 50 percent the building must be brought into compliance as if it were new construc tion Substantial Improvement Damage 8 4 The Community Rating System credits keeping track of improvements to enforce a cumulative substantial improvement requirement It also credits using a lower threshold than 50 percent These credits are found under NFIP CRS Activity 430 Section 43l c and d in the CRS Coordinator s Manual and the CRS Application See also CRS Credit for Higher Regulatory Standards for example regulatory lan guage Post FIRM buildings The rules do not address only pre FIRM buildings they cover all buildings post FIRM ones included In most cases a post FIRM building will be properly elevated or otherwise compliant with regulations for new construction However sometimes a map change results in a higher BFE or change in FIRM zone A substantial improve ment to a post FIRM building may require that the building be elevated to protect it from the new higher regulatory BFE It should be remembered that all additions to a post FIRM building must be elevated at least as high as the BFE in effect when the building was
29. unt only replacement in like kind and what is minimally necessary If the owner chooses to upgrade the quality of a code required item the extra cost is not exempt from the formula it s added to the true cost of the improvement or repairs Unfortunately many property owners and builders pressure local building of ficial to exclude code violation corrections from their voluntary improvement proposals There are code violations in all structures built before the current Substantial Improvement Damage 8 26 code was enacted In many cases those elements must be brought up to code as part of an improvement project This is very different from a code violation citation that forces a property owner to correct those violations and make improvements that were otherwise not planned The building official must know about and document the violations before or at the time the permit is issued Example A small business in a 40 year old building was damaged by a fire The build ing s pre fire market value was 100 000 The insurance adjuster and the permit office concluded that the total cost to repair would be 45 000 However the community s building code states that whenever an applicant applies for a permit to modify or improve a building the building must be brought up to code This building would need the following additional work Replace unsafe electrical wiring Install missing fire exit signs smoke detectors a
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