Project Design within the FEMA 50/50 Rule
With a majority of the Grand Strand & South Carolina Low Counrty positioned in an established flood zone, almost all residential architectural projects come under the guidelines of the Federal Emergency Management Agency's (FEMA) National Flood Insurance Program (NFIP).
AE Flood Zone Defined
FEMA designates high risk flood areas beginning with the letter designation of "A" or "V." In most scenarios, coastal land parcels will be designated under the "AE" zone category. This AE designation means that the area has a 1% annual chance of flooding and a 26% chance of flooding over the life of a 30-year mortgage.
AE Coastal Flood Zone Defined
Coastal AE zones are where wave heights will reach between 1.5 and 3.0 feet of wave action within the Coastal High Hazard Area. In comparison, general AE flood zones have a wave action of less than 1.5 feet.
New Build vs. Renovation
Properties within an AE flood zone have strict requirments regardless if you pursue a residential rebuild or new construction. The National Flood Insurance Program requires flood openings within the foundation or any structure residing below elevated buildings in an AE and AE Coastal flood zones. The flood opening or vent requirements are intended to equalize hydrostatic forces (loads or pressure caused by standing or slow-moving water) on walls, thus preventing damage to or collapse of the building. The requirements are not intended to reduce flood damage caused by hydrodynamic loads associated with fast-moving water (e.g., faster than 10 feet per second), wave impacts, or debris impacts.
With new construction, the FEMA guidelines are immediately instituted into the design and provide less difficulty in achieving the flood requirements. However, with renovations, the challenge emerges at meeting FEMA guidelines due to most properties failing to comply with current modern flood regulation.
The FEMA 50% Rule
THE FORMULA: the project is a substantial improvement if:
Cost of improvement project > 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 requirements.
Look Back Period: all jurisdictions have a "look back" period
Owners that decide to renovate an existing home within a flood zone will be required to meet modern new construction codes. Under the FEMA 50% Rule, if the cost of improvements or the cost to repair the damage exceeds 50 percent of the market value of the building, the residence must be brought up to current floodplain management standards. Thus, the value of the actual home is the basis for the rule and not the value of the entire land. FEMA has determined any construction that is a "substantial improvment" will be part of the 50% Rule. Substantial improvement means any permit level 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 before the start of construction of the improvement.
Examples of Substantial Improvement:
• Remodeling projects.
• Rehabilitation projects.
• Building additions.
• Repair and reconstruction projects