Substantial Improvement and Substantial Damage 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 structure is located within a special flood hazard area and its existing lowest floor is not in compliance with FEMA requirements.
SUBSTANTIAL DAMAGEDamaged residential buildings must have their lowest floor elevated to one foot above 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, regardless of whether the building has flood insurance coverage. Owners of non-residential buildings have the option of raising their lowest floor or providing flood proofing.
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 finished material and labor.
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 finished materials, built-in appliances, and hardware, in addition to profit and overhead. The “building value” or value of improvements = the market value of the structure only. Land and exterior improvements, such as accessory structures, landscaping, paving, fencing, etc., are excluded. Market value = the appraised value of the existing building.
Please refer to the city’s substantial improvement/substantial damage Standard Operating Procedure (PDF).
Worksheet (XLS) - for commercial, industrial, multi-family & other structures.
Worksheet (XLS) - for single family residential property.