Administering Substantial Improvement and Substantial Damage Requirements

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Administering substantial improvement (SI) and substantial damage (SD) requirements involves critical administrative tasks, emphasizing community responsibilities and the roles of property owners and permit applicants. This chapter outlines methods for informing the public about SI/SD requirements and the necessity of obtaining permits. It addresses various issues that arise during permit reviews, building upon the data and determinations covered in previous chapters, including cost assessments and market value evaluations. Additionally, it touches on flood insurance implications and post-disaster management and provides insights into flood mitigation projects eligible for FEMA funding.

Community Responsibilities​

When a community participates in the National Flood Insurance Program (NFIP), it agrees to adopt, administer, and enforce floodplain management provisions that meet or exceed the minimum NFIP requirements. Specific responsibilities in administering SI/SD requirements include:

• Reviewing Permit Applications: Assess whether improvements or repairs in Special Flood Hazard Areas (SFHAs) qualify as substantial improvements or substantial damage repairs.
• Evaluating Descriptions of Proposed Work: Ensure all aspects of the proposed work comply with requirements. Even if a project doesn't constitute SI/SD, local officials can encourage owners to take measures to reduce future flood damage, as outlined in Section 5.8.
• Assessing Cost Estimates: Determine if the proposed work's cost estimates are reasonable or use alternative methods to estimate costs.
• Determining Market Value: Choose a method to determine market value, especially after events that damage many buildings, and identify buildings likely to have sustained substantial damage.
• Reviewing Market Value Appraisals: Ensure appraisals accurately represent the building's characteristics and market value, excluding land value.
• Determining Substantial Improvements: Evaluate if proposed improvements are substantial by comparing the work's cost to the building's market value.
• Assessing Substantial Damage: Determine if damaged buildings are substantially damaged based on repair cost estimates versus the building's pre-damage market value. Local building officials have the authority to condemn buildings unfit for occupancy, but condemnation and substantial damage determinations are separate processes.
• Issuing SI/SD Determination Letters: For NFIP-insured buildings substantially damaged by flooding, this letter is necessary for owners to file an Increased Cost of Compliance (ICC) claim to help pay for compliance measures.
• Retaining and Accessing Flood Insurance Rate Maps (FIRMs): Keep all versions of FIRMs available for public access. Use the most recent "effective" map to regulate development and earlier maps to verify base flood elevation (BFE) data for post-FIRM buildings predating the current maps.
• Maintaining Permit Files: Document all SFHA developments and make this information available for public inspection. Include pertinent elevation data and flood protection designs.
• Conducting Field Inspections: Ensure compliance with issued permits during construction, address deficiencies and violations, and monitor for unpermitted developments.
• Performing Post-Event Assessments: Inform property owners about permit requirements for repairs and determine whether damage qualifies as substantial.
• Coordinating with Property Owners and Insurance Adjusters: Facilitate NFIP flood insurance claims and ICC coverage.

These responsibilities ensure that communities effectively manage flood risks, protect property, and maintain compliance with NFIP standards.