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Substantial Improvement and Substantial Drainage Information

The City of Scottsdale is a participant in the National Flood Insurance Program (NFIP) as administered by the Federal Emergency Management Agency (FEMA). As a participant, the City must adhere to FEMA requirements for new construction within flood zones. Part of the requirements relate to substantial improvements and substantial damage to existing buildings. These requirements are an issue in particular when an existing residential structure is located within a special flood hazard area and its existing lowest finish floor is not in compliance with FEMA requirements.

SUBSTANTIAL DAMAGE

Damaged residential buildings must have their lowest floor elevated to the base (100 year) flood elevation if damaged by any cause for which repair costs are 50% or more of the value of the building. The cause of damage could be from flooding, fire, earthquake, wind or man. This applies to all residential buildings located in a designated special flood hazard area (generally A zones), regardless if the building has flood insurance coverage. Commercial buildings have the option of raising their finish floor or providing floodproofing.

The costs to repair must be calculated for full repair to “before-damage” condition, even if the owner elects to do less. The total costs of repair include both structural and finish material and labor.

SUBSTANTIAL IMPROVEMENT

For existing buildings proposed to be remodeled, renovated, rehabilitated, added to, or in any way improved, proposed modifications or additions must be evaluated by City staff to determine whether they constitute a “substantial improvement”. If the total costs of improvement are 50% or more of the building value, the building must come into compliance with NFIP standards just like “substantial damage”. “Total costs” mean all structural costs, as well as all finish materials, built-in appliances, hardware, in addition to profit and overhead. The “building value” or value of improvements = the market value of structure only. Land and exterior improvements, such as accessory structures, landscaping, paving, fencing, etc., are excluded. Market value = appraised value of the existing building. A certified appraisal may be submitted in lieu of using the County Appraiser’s value.

For those with a project potentially affected by FEMA’s substantial damage or substantial improvement requirements, information on FEMA’s web site should be reviewed at http://www.fema.gov/plan/prevent/floodplain/nfipkeywords/si.shtm