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Why the FEMA 50 Percent Rule matters

Published: Tuesday, July 2, 2013 6:00 a.m. CDT
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James Knudsen is director of engineering services for the Village of Carol Stream.

Many homeowners living in a special flood hazard area are unaware of a set of federal agency rules that prohibit them from making repairs or improvements to their damaged home until they first bring it into compliance with National Flood Insurance Program (NFIP) regulations.

These program regulations include a set of federal requirements, commonly referred to as “The FEMA 50 Percent Rule.” The regulations require property owners of buildings located in a special flood hazard area to bring them into compliance with all storm water management regulations when the costs for repair or improvement equals or exceeds 50 percent of the fair market value of the building.

These costs are calculated prior to conducting the improvements. They can be significant and include the cumulative costs of all building repairs and associated improvements dating back to the July 2010 flood disaster, regardless of whether the building is covered by flood insurance.

For a property located in a special flood hazard area to come into compliance with established storm water regulations, its owner is required to raise the structure one foot above the base flood elevation. The base flood elevation is the elevation at which flood waters are anticipated to rise during a 100 year flood event.

A 100 year flood is a flood event that has a one percent probability of occurring in any given year. For example, if a home’s first floor is two feet below the base flood elevation, the owner would need to raise the structure 3 feet in order to comply with NFIP regulations.

The cost of elevating a home is a major investment that can cost a homeowner between $50,000 and $100,000. In addition, if the home has a basement, it must be filled in when the home gets raised.

Because of the substantial costs to elevate a home in a special flood hazard area, it is critical for homeowners to familiarize themselves with the FEMA 50 Percent Rule and to plan now for its possible occurrence.

To begin that process, property owners are encouraged to contact their homeowner’s insurance agent or the FEMA FloodSmart Call Center at 1-888-435-6637. For information on the FEMA 50 Percent Rule, visit www.fema.gov/pdf/floodplain/nfip_sg_unit_8.pdf.

James Knudsen is director of engineering services for the village of Carol Stream

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