Substantial Damage & Improvement

Foundation failure

To be considered “substantially damaged,” a building in a flood hazard area must meet a set of criteria and comply with certain requirements.

FEMA uses the term “substantial damage” to trigger a review of compliance with building code requirements applied to damaged buildings in flood hazard areas.

Those requirements are:

The current community floodplain management regulations, and
The flood provisions of the International Codes.

Substantial damage does not trigger all building code requirements for new construction.

Substantial Damage Overview

For communities that participate in the National Flood Insurance Program (NFIP), substantial damage determinations are required by local floodplain-management ordinances. These rules must be in place for residents of a community to purchase flood insurance through the NFIP.

Substantial damage applies to a structure in a Special Flood Hazard Area (SFHA) for which the total cost of repairs is 50 percent or more of the structure’s market value before the disaster occurred, regardless of the cause of damage. This percentage could vary among jurisdictions but must not be below NFIP standards.

For example, if a structure’s market value before the damage was $200,000 and repairs are estimated to cost $120,000, that structure is substantially damaged. Land value is excluded from the determination.

FEMA does not make a determination of substantial damage and does not notify any property owner of a damage determination. FEMA damage assessment teams may be asked to respond to local requests to assess the extent of disaster-caused damage to some structures. The data is provided to local jurisdictions, which may make substantial damage determinations based on their own ordinances. That information helps property owners decide whether to, or how to, repair or replace a damaged dwelling, and whether additional work will be needed to comply with local codes and ordinances, such as elevating a structure in a SFHA.

If a building in a floodplain is determined by the local official to be substantially damaged, it must be brought into compliance with local floodplain management regulations.

Owners may:

Elevate their structures, or change them in some other way to comply with those local floodplain regulations and avoid future losses;
Relocate or demolish the structure; or,
Flood proof a non-residential, or historical structure.

All property owners should check with local building officials to determine which permits for repairs are required before beginning the work. Depending on local codes and ordinances, there can be serious consequences for not complying with the permitting process. Property owners who have a flood insurance policy through the NFIP and a substantially damaged building (from flooding) in a SFHA may be able to use additional funds – known as Increased Cost of Compliance (ICC) – from their flood insurance policy (up to $30,000) to help defray the costs of elevating, relocating, demolishing a structure, or flood proofing a non-residential structure. For more information on ICC, contact your insurance agent.

NFIP Requirements for Substantial Damage/Improvement Include

Elevation of new and substantially improved residential structures above the base flood level.
Elevation or dry floodproofing (made watertight) of new or substantially improved non-residential structures.
Prohibition of development in floodways, the central portion of a riverine floodplain needed to carry deeper and faster moving water.

These requirements are the most cost-effective way to reduce the flood risk to new buildings and infrastructure. Structures built to NFIP standards experience 80 percent less damage than structures not built to these standards and have resulted in $1.2 billion per year in reduced flood losses.

In addition to protecting new buildings, the NFIP substantial improvement and substantial damage requirement ensures that flood protection measures are integrated in structures built before FIRMs were developed. A building is considered substantially improved or substantially damaged when the cost of improving or repairing the building equals or exceeds 50 percent of the market value of the building. When this occurs, the community, which makes the determination, must ensure that the NFIP requirements are applied to these building so that they are protected from future flood damages.

Presentations by KDOW and FEMA at 2022 KAMM Conference

Substantial Damage Administrative Procedures -Getting your Ducks in a Row Before a Disaster Happens – Smithline and VanPelt, FEMA RIV and DOW

Substantial Damage The How-To’s for Local Administrators – Patricia Smithline and Alex VanPelt, FEMA RIV and DOW

Substantial Damage Tools

Link to FEMA’s Substantial Damage Estimator Tool.

Substantial Improvement/Damage Regulations

To participate in the NFIP, communities must adopt and enforce regulations and codes that apply to new development in SFHAs. Local floodplain management regulations and codes contain minimum NFIP requirements that apply not only to new structures, but also to existing structures which are “substantially improved (SI)” or “substantially damaged (SD).”

For communities that participate in the NFIP, substantial damage determinations are required by local floodplain-management ordinances. These rules must be in place for residents of a community to purchase flood insurance through the NFIP.

Determination: Local officials determine if a building in their jurisdiction has been substantially damaged. The decision about a structure being “substantially damaged” is made at a local government level, generally by a building official or floodplain manager.

Substantial damage applies to a structure in a Special Flood Hazard Area (SFHA) – or 1-percent-annual-chance floodplain – for which the total cost of repairs is 50 percent or more of the structure’s market value before the disaster occurred, regardless of the cause of damage. This percentage could vary among jurisdictions, but must not be below NFIP standards.

Highwater mark

Compliance: If a building in a floodplain is determined by the local official to be substantially damaged, it must be brought into compliance with local floodplain management regulations. Owners may decide to:

Elevate their structures, or change them in some other way to comply with those local floodplain regulations and avoid future losses;
Relocate or demolish the structure; or,
Flood proof a non-residential structure.

Substantial Improvement Description

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 improvement. This term includes structures which have incurred “substantial damage,” regardless of the actual repair work performed. The term does not, however, include either:

Any project for improvement of a structure to correct existing 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 or
Any alterations of a “historic structure,” provided that the alteration will not preclude the structure’s continued designation as a “historic structure.”

Floodplain management requirements for new construction apply to substantial improvements. ICC coverage does not apply to substantial improvements unless a structure is substantially damaged due to flooding. Link to the federal NFIP requirement.

3 – Flood plain management criteria for flood-prone areas
- (b) (5) – Elevation Certificate
- (c) (3) – A Zone Nonresidential Buildings
- (c) (4) – Zone A Nonresidential Buildings
- (c) (5) – Openings
- (c) (6) – Zone A Manufactured Homes
- (c) (7) – Zone AO Residential Buildings
- (c) (8) – Zone AO Nonresidential Buildings

60.3 – Flood plain management criteria for flood-prone areas
- (c) (10) – Cumulative Effects of Development
  (d) (3) – Floodway Encroachment

Answers to Questions About Substantially Improved / Substantially Damaged Buildings – FEMA 213

October 26, 2018

A joint effort by the Building Science Branch and Floodplain Management Division, updated FEMA 213 significantly expands the number of questions answered in the 1991 version of the publication. The enforcement of the SI/SD requirements can be a major concern for local officials, especially after their communities experience widespread damage from floods or other disasters. The questions and answers in the revised FEMA 213 are intended to guide floodplain administrators, building officials, building inspectors, zoning administrators, citizen planning boards, and elected and other local officials who have roles in enforcing floodplain management and building codes It is also helpful for architects, engineers, contractors, building owners and others.

FEMA 213 provides short answers to many questions and concerns, while encouraging local officials and others to refer to more complete guidance in FEMA P-758, Substantial Improvement/Substantial Damage Desk Reference. Each question includes a text box referring readers to specific sections in the SI/SD Desk Reference.

The revised FEMA 213 has four sections:

Section 1 briefly describes the NFIP and the purpose of the booklet.
Section 2 answers questions about pertinent definitions and regulations, and also answers some general questions about SI/SD.
Section 3 answers questions about how to determine substantial improvement and substantial damage.
Section 4 answers common questions that arise in the post-disaster period.

FEMA 213 is available here.

FEMA’s Substantial Improvement/ Substantial Damage Desk Reference

May 2010

Download FEMA’s Substantial Improvement/ Substantial Damage Desk Reference. This Desk Reference provides practical guidance and suggested procedures to implement the NFIP requirements for SI/SD.

Link to the FEMA issued a SI/SD Desk Reference.

Temporary Occupancy of Substantially Damaged Structures after a Disaster

April 2018

This fact sheet is designed to help Floodplain Administrators and Building Code Officials understand whether communities may allow displaced property owners to occupy potential or declared Substantially Damaged (SD) residential structures until the structure can be brought into compliance with local floodplain management ordinances or building codes.

Download the FSTempOccupancySubstantiallyDamagedStructuresAfterDisaster508.

Understanding Substantial Damage in the International Building Code

July 2017

This document will help you understand how the concept of Substantial Structural Damage (SSD) is used within the International Existing Building Code^® (IEBC^®). FEMA’s Public Assistance Required Minimum Standards Policy found in the Public Assistance Program and Policy Guide, Chapter 2 – Section VII.B.2, requires that projects receiving FEMA assistance for repair or replacement incorporate the natural hazards-related provisions of the most recent edition of the International Code Council’s^® (ICC^®) International Building Code^® (IBC^®), International Residential Code^® (IRC^®), and/or the IEBC.

The policy applies to buildings that have sustained any level of damage (including, possibly, SSD or Substantial Damage), as well as projects involving new construction, such as improved projects, alternate projects, or projects eligible for replacement in accordance with 44 CFR, Part 206.226(f). The relevant code provisions include not only the design criteria for repair or replacement construction, but also those provisions that determine whether repair to the pre-damage condition is sufficient, or whether repair must be supplemented by improvement. One of those scope-determining provisions involves the concept of SSD.

Link to: Understanding Substantial Structural Damage in the International Existing Building Code

Understanding Substantial Structural Damage in the International Existing Building Code Job Aid

April 26, 2017

This document will help you understand how the concept of Substantial Structural Damage (SSD) is used within the International Existing Building Code® (IEBC®). FEMA’s Public Assistance Required Minimum Standards Policy found in the Public Assistance Program and Policy Guide, Chapter 2 – Section VII.B.2,1 (Policy) requires that projects receiving FEMA assistance for repair or replacement incorporate the natural hazards-related provisions of the most recent edition of the International Code Council’s® (ICC®) International Building Code® (IBC®), International Residential Code® (IRC®), and/or the IEBC. The policy applies to buildings that have sustained any level of damage (including, possibly, SSD or Substantial Damage), as well as projects involving new construction, such as improved projects, alternate projects, or projects eligible for replacement in accordance with 44 CFR, Part 206.226(f). The relevant code provisions include not only the design criteria for repair or replacement construction, but also those provisions that determine whether repair to the pre-damage condition is sufficient, or whether repair must be supplemented by improvement.

Download the PA_Job-Aid-Understanding_SSD_International-rev.

Substantial Damage Fact Sheet

October 31, 2016

Rebuilding after a flood provides an opportunity to make buildings stronger and safer.
Individuals, communities, businesses and government agencies all have a stake in how buildings damaged from a flooding event are built, rebuilt and repaired. The primary goal is to reduce risk of loss from future floods.
If local officials determine that a residential structure in the floodplain has been substantially damaged – meaning the cost to repair the home is equal to or greater than 50 percent of its market value before the flood damage – the owner generally has three options:
- Elevate the building to a height determined by local officials;
- Relocate the structure outside the floodplain, or
- Demolish the structure.
Since floodplain ordinances are established at the local level, local and state officials may use different substantial damage percentages and different valuations as long as they are not below NFIP standards.
The local standards must be applied uniformly to all structures within their jurisdiction.
Local officials determine if a building in their jurisdiction has been substantially damaged.
FEMA does not make a determination of substantial damage and does not notify any property owner of a damage determination. FEMA damage assessment teams may be asked to respond to local requests to assess the extent of disaster-caused damage to some structures. The data is provided to local jurisdictions, which may make substantial damage determinations based on their own ordinances.
FEMA mitigation experts have been and continue to be in close contact with local officials, especially floodplain managers, to provide detailed information and expert advice on repairing and rebuilding damaged homes in the floodplain.
Bringing homes and businesses into compliance with local floodplain ordinances is not only required, but may reduce individual flood insurance premiums.

Mitigation Requirements for Homeowners Substantially Damaged

Elevated structure in progress in Kentucky

If your local community official determines your home to be substantially or repetitively damaged by flood, you may be required to bring the structure into compliance with the community’s local floodplain management ordinance. If that is the case, you may be able to utilize up to $30,000 if you have a flood insurance policy issued through the NFIP which offers a coverage called Increased Cost of Compliance (ICC). ICC provides financial assistance to eligible policyholders to offset the costs to mitigate structures relatively faster than without having flood insurance.

When does a flood-damaged home need to be elevated?

Work on flood-damaged homes located in communities that participate in the NFIP is subject to specific requirements. If the flood-damaged home is in a floodplain and is substantially damaged (see definition below), the NFIP requires that reconstruction and repairs, termed substantial improvements (see definition below), be performed to bring the home into compliance with local floodplain management regulations. These regulations include elevating the home so that its lowest floor is at or above the base flood elevation (BFE). The local jurisdiction may require elevating the home higher than the BFE, to an elevation called the design flood elevation (DFE).

Other requirements include using the proper type of foundation (depending on the flood zone in which the house is located), properly anchoring the home to the foundation, using flood-resistant materials, complying with limitations on the use of enclosed areas below the elevated home, and protecting utilities and equipment. Check with the local jurisdiction for additional requirements that must be met.

Reconstruction of a home that is destroyed or that has been so severely damaged that it must be rebuilt is considered construction of a new home, and new homes must comply with the local floodplain management regulations.

Definition: Substantial damage means damage of any origin for which 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 (FEMA, 2010).

Definition: Substantial improvement means any reconstruction, rehabilitation, addition, or other improvement of a structure for which the cost of the work equals or exceeds 50 percent of the market value of the structure before the start of construction of the improvement. This term includes structures that have incurred substantial damage regardless of the actual repair work performed (FEMA, 2010).

References: FEMA. 2010. Substantial Improvement/Substantial Damage Desk Reference. FEMA P-758. Washington, DC. May 2010.

KY Substantial Damage Fact Sheet

Download 2-page KY Substantial Damage Fact Sheet.

KDOW User Notes for Post-Disaster Inspection Notices

April 2021

Download the Word document for Post-Disaster Permitting Notices.

FEMA Releases Damage Assessment Pocket Guide

August 17, 2021

The PDA Pocket Guide is a supplement to the full PDA Guide and provides high level guidance that can be used as a reference in the field..

Link to fema_2021-pda-pocket-guide.

Substantial Damage Estimator (SDE) Tool (2017), FEMA P-784

FEMA developed the SDE tool to assist State and local officials in estimating Substantial Damage for residential and non-residential structures in accordance with the requirements of the NFIP as adopted by the communities. The tool can be used to assess flood, wind, wildfire, seismic, and other forms of damage. It helps communities provide timely Substantial Damage determinations so that reconstruction can begin quickly following a disaster.

The FEMA Substantial Damage Estimator Best Practices (2017) document suggests approaches for dealing with some of the challenging situations users may encounter while using the SDE tool. After a disaster, the complexity of field conditions and the need to prepare for and perform SDE inspections to assess damage can present numerous challenges. This document contains suggested solutions to some common challenges that SDE users may encounter. The information and methods can be used by Federal, State, and local officials when developing SDE-based inventories of potentially substantially damaged residential and non-residential structures. The guidance is organized into three phases of SDE management: 1. Planning for Data Collection, 2. Field Work, and 3. SDE Quality Assurance Reviews.

Although the SDE data collection and reporting process remains relatively unchanged from previous versions of the tool, the SDE 3.0 release focuses on enhancing the three key areas of performance, data accessibility, and usability. Updates to the tool’s algorithms and some new embedded functionality create significant performance enhancements over previous versions. Users can now access the underlying database to run queries, perform bulk updates of data, or generate custom reports using their own databases and reporting tools. SDE 3.0 improves the user experience with dozens of enhancements that address user feedback.

FEMA P-784, SDE User Manual and Field Workbook: Using the SDE Tool to Perform Substantial Damage Determinations (August 2017), and the FEMA Substantial Damage Estimator Best Practices (August 2017) document have been updated to reflect the enhanced tool.

Link to FEMA’s webpage to download different sections of the SDE.

Substantial Damage Estimator Best Practices

August 2017

SDE is designed to help Federal, State, and local officials manage data collection and assessment of substantial damage. Often the complexity of field conditions, limited access to technology, or inspection work in the field present situations that require additional organization and planning. This document contains suggested solutions to some common situations SDE users may encounter. The information and methods can be used by Federal, State, and local officials when developing SDE-based inventories of potentially substantially damaged residential and non-residential structures. The guidance is organized into three phases of SDE management: 1. Planning Data Collection, 2. Field Work, and 3. Data Management.

Link to Substantial Damage Estimator Best Practices developed to provide suggested approaches for dealing with some of the challenging situations users may encounter while using the SDE Tool.

KAMM mailing address: KAMM, PO Box 1016, Frankfort, KY 40602-1016.

Have questions, contact us at help@kymitigation.org.

KAMM
Ky Association of Mitigation Managers