Building a new home, room addition or remodeling in a floodplain

The idea of living close to a body of water- the ocean, a lake, a river or a stream- has great appeal to many people. Whether you’re into surfing, boating, fishing or good old relaxation, there’s nothing like having a home nearby water. Unfortunately, living close to water does carry the risk, however remote, of flooding. It’s a risk that many people are willing to take, but it comes at a price.

The federal government has been involved in floodplain management since the 1800s. Back in the 1920s and 1930s, the approach was to build large structures such as dams and levees for flood protection. By the 1960s, this single-minded approach was called into question as flood losses continued to mount, despite the number of flood control structures in place.

As a result, the National Flood Insurance Program (NFIP) was created in 1968, which had several results:
(1) it transferred the cost of private property flood losses from taxpayers to floodplain property owners through flood insurance;
(2) regulations were put in place for the first time governing development and construction in floodplains;
(3) A floodplain mapping program was undertaken to determine the areas at greatest risk for flooding.

Initially, participation in the NFIP was voluntary. As a result, very few communities joined, and the cost to the taxpayer of disaster relief was as high as ever. To remedy this, Congress passed the Flood Disaster Protection Act in 1973, which required that buildings in flood hazard areas have flood insurance as a condition of federal aid or federally-insured mortgage loans. Many more communities joined the NFPA as a result. In 1979, responsibility for administering the NFIP was transferred to the newly created Federal Emergency Management Agency (FEMA).

To date, FEMA has identified through mapping most parts of the country at greatest risk for flooding. These so-called Special Flood Hazard Areas (SFHAs) are shown on Flood Insurance Rate Maps (FIRMS).

What does this mean to you as a homeowner? If you’re planning a major construction project- whether it be a new home, room addition or remodel- your first step should be to determine whether your community participates in the NFIP. The answer is most likely yes, because of the severe sanctions (such as ineligibility for flood insurance or federal disaster relief) that the NFIP can impose on communities that do not participate.

Second, you should find out whether your planned construction site is in a floodplain. Your local building authority can look this up for you, or you can look it up yourself on the FEMA website: http://hazards.fema.gov. If you are in a floodplain, it then becomes critical to determine the Base Flood Elevation (BFE) for your proposed construction site. The BFE is the computed elevation to which floodwater is anticipated to rise during a flood which has a 1% chance of occurring in a given year. In some areas, the BFE has already been determined; in other areas, you will have to hire a qualified civil engineer to determine the BFE. The reason the BFE is critical is that, according to NFIP regulations, the finished floor level of new construction must be at or above the BFE.

For example, let’s say you’re planning to build a new single-story home, and the BFE at the building pad is at an elevation of 100 feet. Furthermore, you discover that your local building jurisdiction requires one foot of “freeboard”, meaning that the finished floor level must be at least one foot higher than the BFE. In another words, the house will have to be designed so that the finished floor level is at an elevation of 101 or higher. You hire a surveyor, who determines that the existing grade at the building pad is 96 feet. You will either have to raise the existing grade by adding fill, or you will have to construct a raised foundation and add stairs with a 5-foot overall rise from grade to finished floor level. In addition, you will need to use flood damage-resistant building materials for all construction below the BFE.

What are the consequences of ignoring the NFIP regulations and building below the BFE? First, many building jurisdictions will not issue you a building permit unless your design complies with NFIP requirements. Second, most banks that issue mortgage loans or construction loans will require you to have flood insurance if they discover you’re building in a floodplain, and you will have to pay a very high flood insurance premium if you fail to comply with NFIP regulations.

The situation is somewhat different if you’re planning to add onto or remodel an existing home:
(1) If the cost of the addition is less than 50% of the market value of the existing structure, then the project is not considered a “substantial improvement” and you do not have to elevate either the existing structure or the addition above the BFE. In order to determine whether you qualify for the “50% rule” exemption, you will probably need to hire a licensed real estate appraiser to determine the market value of the existing house (excluding the value of the land itself), and a licensed general contractor to estimate the construction cost of the addition. In other words, your local building authority won’t just take your word for it.

(2) If you fail to meet the 50% rule exemption, then one of several scenarios could apply, depending on what flood zone you’re in and the nature of your project:
(a) the existing structure can remain as is, but the finished floor of the addition will have to be elevated above the BFE. For example, this situation would apply if you were planning a lateral addition to the house in which the common wall between the existing structure and the addition will remain, with the exception of a doorway from the existing house to the addition.
(b) both the existing structure and the addition will have to be elevated above the BFE. This situation applies to all vertical (e.g., second-story) additions and some lateral additions (e.g., if you plan to demolish the common wall between the existing structure and the addition).

Given the complexity and potential cost of building in a floodplain, you would be well-advised to consult a design professional with experience in this area before embarking on such a project.