Rebuilding Substantially Damaged Buildings

There has been much talk and much confusion about buildings, mostly on the West End and in the Canals that have been deemed "Substantially Damaged" by Long Beach or FEMA building inspectors.

When Long Beach joined the National Flood Insurance Program it took on many post-disaster responsibilities, one of which are these post-disaster inspections and "substantial damage" determinations.  The Building Department is doing the job and FEMA is providing additional inspectors, training and assistance. 

Let's start with some basic information that isn't well circulated. 

Flood Insurance is required by law when a home is secured by a government-guaranteed mortgage.  That's Fannie Mae or Freddy Mac.  Look at your mortgage documents and you'll know if you are required to carry flood insurance.  If it's not in your mortgage documents, you don't have to buy it. 

Now assuming you are required to buy flood insurance or you want to buy it, its price is determined by a number of variables.  The first is the age of the home.  If it was built before the community's first flood map was issued (I believe that was 1997), then your insurance is issued at "Pre-FIRM (flood insurance rate map)" rates.  Those rates disregard how high the lowest floor of the house is in reference with the "Base Flood Elevation," which is the level of the 100-year flood shown on flood maps. 

If you live in a "Post-FIRM" house, or one built after the maps were made and after the "100-year flood" BFE was determined, your insurance rate depends on the elevation of the lowest floor.  If your lowest floor (basement, crawl space, first floor) is below the BFE, your rates will be high.  If it's above the BFE, your rates will be lower.  "Pre-FIRM" rates for older homes are about equal to rates newer homes pay that have a first floor slightly below the BFE. 

How do you determine your lowest floor's elevation?  It won't be on your 80 year old plans or survey, and the building department won't know it.  It's not the curb, nor a number on an old map.  The "datums" or "zero-point" have changed through the years and the only way to get your elevation is to hire a Professional Land Surveyor to find the elevation.

Let's talk about that pre-fab, 1918 former Camp Upton bungalow that you lived in, nestled down low on the sand.  Its first floor was at Elevation 9, which is three feet below the BFE which were you live is 12.  Your flood insurance rates were reasonable because you paid Pre-FIRM rates that didn't consider how low or high the house was situated. 

On October 29, your life flooded.  That bungalow was swimming under two feet of water during the "300-year storm".  You call the flood insurance adjuster and he offers you some money.  He also tells you something about  "ICC Coverage".  That's an additional $30,000 you can get from Uncle Sam if you meet either one of two criteria:

Your house is deemed "substantially damaged" by a building official.  That is if the damage was equal to 50% of the house's "market value" or --

If you had repetitive damage.  That's if you had two or more flood losses over a certain value during the past ten years. 

Count me in!  Where do I sign up for the money?  If it's free, it's for me! 

Not quite.  Money usually doesn't come without strings attached and ICC money isn't an exception.  That stands for "Increased Cost of Compliance," and that money has to be used for correcting FEMA code "noncompliance".  Huh?  Your bungalow was always legal.  You have a Certificate of Compliance from the Building Department in a folder somewhere.    So what's this letter from the Building Department designating your house "substantially damaged"? 

Here's what has happened.

When your house flooded, the Long Beach Building Department was required by law to inspect buildings suspected of "substantial damage".  They had a huge job ahead of them.  They were required to inspect several hundred homes quickly.  FEMA sent help.  They provided manpower and a computer program, called "SDE" to quickly make these "substantial damage" determinations. 

So what happens when your home is Substantially Damaged? 

It now must be insured at the Post-FIRM rates.  Remember those?  They are the new home rates that take into account first floor elevation.  So if your home's first floor is three feet below the BFE, you can kiss that $300 flood insurance policy goodbye!  You can either raise the home or pay increasingly high rates.  Those rates will rise each year 25%, until they top out who-knows-where, thanks to legislation passed last year. 

Nobody knows what these actual rates will be, because they are determined each year by the government based on actual payouts.  The example given in a recent FEMA publication cites $9700/year for a house that has its first floor 4-feet below the BFE.   Ouch.  

Or you can take your $30,000 ICC money, add another $50,000 or so of your own money (or a banks, or your Dad's or some promised State grant)  and raise the house above the BFE and enjoy even lower insurance rates.  Simple as that.

Nobody complains about government intrusion more than I, but this column's not about that.  Short of moving away, here's what you can do to help beat back this intrusive socialist confiscatory taxation. (Couldn't help myself there).  

What if you don't want to raise your house or you can't afford to raise your house or you like living the way you've lived for the past fifty years?  If your home has been designated "substantially damaged," you may challenge that assessment.  FEMA gives lots of latitude here, and the Building Department is simply limited in its resources.  They have nothing to gain or to loose by making such a designation.  They are simply doing the job imposed on them by FEMA and they do the best they can to make a fair assessment.  But if you disagree and you prepare an effective challenge, that assessment can change.

Here's a link to FEMA's "Answers to Questions about Substantially Damaged Buildings".  It has EVERYTHING you need to know about the subject.  It discusses valuation, determination and consequences in plain english:
http://www.fema.gov/library/viewRecord.do?id=1636

You may not want to be designated "Substantially Damaged".  Perhaps a different methodology would offer different results.  Read the document above and let it guide your actions.

Here's some more guidance, offered by the New York State DEC.  They discuss some guidelines for Substantial Damage and offer some authoritative contacts on the subject:

http://www.dec.ny.gov/lands/75774.html

Hopefully, this essay will be helpful in sorting out your options and helping you plan your future here in Long Beach.  

Remember that all these matters are written in law.  They aren't someone's feelings, opinions or arbitrary bullying.   The local Building Department is charged, by law, with a huge job and they are making a fair and honest effort to comply.  I know most of their people personally and they are pretty good folks.  If you have a question or concern, speak with them. 

They should point you in the right direction, but there is never any excuse for not acquiring the knowledge and facts you need to protect yourself and your home. 

I hope I've led you in a helpful direction.  Good luck.