Politics & Government

FEMA: Think About 'Substantial Damage' Determinations When Planning Home Repairs

As repairs and reconstruction continue nearly eight months after Superstorm Sandy struck the Jersey Shore, the Federal Emergency Management Agency is reminding homeowners to keep in mind whether their homes were determined to be "substantially damaged" by the storm.

A substantially damaged home is one 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.

"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,'" said Chris McKniff, a FEMA spokesman.

The determination is based only on the value of the building itself – not the land on which the building stands.

For homeowners, the determination has its pros and cons. On the plus side, those with flood insurance whose homes were declared substantially damaged may qualify for a $30,000 "Increased Cost of Compliance," or ICC, grant to help raise the home. On the other hand, those whose homes are declared substantially damaged will be forced to raise their houses to comply with FEMA's current flood maps in order to be granted a certificate of occupancy – even if the home has been otherwise repaired.

Some municipalities, such as Toms River, have compelled homeowners with substantially damaged homes to sign documents agreeing to raise them in order for a temporary certificate of occupancy to be granted so they could remain in them in the mean time.

The determinations are usually made by municipal building inspectors or floodplain managers. To calculate substantial damage, the local official makes a visual inspection of a house, making notes of the impacts to the structure itself and, when possible, to the interior. These notes, coupled with other information such as property valuations and estimated costs to repair, are used to calculate the percentage of flood damage to the structure, said McKniff.

The determination of substantial damage, McKniff said, is essentially handled completely on the local level. Different municipalities use different formulas to calculate substantial damage and market value. Many use assessed value to do so.

"It's up to the town," said McKniff. "It has to be the way that they consistently determine substantial damage. Each town can utilize whatever is in their ordinances to determine substantial damage."

There is no formal appeal process at the federal level for such determinations.

"It would have to be challenged through the town itself," said McKniff.

Residents whose homes were substantially damaged should call their flood insurance agent for information on the ICC grants. Additional information about flood maps and Hurricane Sandy recovery can be found on the FEMA Region 2 Coastal Analysis Mapping website.


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