Home Elevation Versus Reconstruction
Did you lift your house already? Did you do it right after the storm? Did you wait? Now is the time to plan. Most towns have given the deadline of 5 years to complete your flood hazard mitigation.
You’re faced with a problem. Originally you thought you could just repair the flood damage, but now you find out that the building department is going to make you lift up your house. You’re nervous because of the nightmare stories you have heard and seen in the news.
BE ABLE TO SOLVE THIS DILEMMA RIGHT NOW!
Does this sound familiar?
If it does, you have come to the right place. I am going to help you decide. We are also going to give you the tools to clarify the financial portion of the decision. Yes, there are more things to consider than just the financing… and you thought that was the only thing to worry about!
RELAX! IT TAKES SOME WORK, BUT WILL SAVE YOU THOUSANDS $$$
Emotional Attachment / Nostalgia
Don’t underestimate the strong power that nostalgia can have. In some cases, years of memories have been created at a shore home, and that sense of place is an important part of your life, and your family’s lives. This is a paradigm called conditioned place preference. Drastically altering your home may seem financially the best choice, but when you factor in the ‘intangibles’ the decision becomes clear.
Don’t Do it! (Unless you have to)
My advice is do NOT elevate your home, or rebuild your home, unless you are required to because of the fifty percent damaged rule. This is fairly simple from a financial point of view. If you have flood insurance, and it has not lapsed, you are grandfathered. (Click Here for the PDF) If you can stomach potentially losing some of the contents of the house, and going through another repair (maybe twice more), this is the best financial decision. You see, if you are a repeat flooding victim, FEMA has a grant that pays 100% the cost of elevation and is not capped at a certain dollar amount. So, if there is a REAL risk of repeat flooding, the insurance isn’t going to want to keep paying out over and over again, and they are going to get you up and out of the way of the flood waters. If there is only a PERCEIVED risk, then they leave it up to you. Don’t play into the hands of the fear mongers, and pay your hard earned dollars to reduce the risk of the insurance company.
Unless you have to…
Substantially damaged? There is nothing more frustrating because of the game that coastal towns play. They know this rule well. It states :
44 CFR 59.1. Definitions: “Substantial damage” means damage of any origin sustained by a structure whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred.
Two key points:
• The damage can be from any cause—flood, fire, earthquake, wind, rain, or other natural or human-induced hazard.
• The substantial damage rule applies to all buildings in a flood hazard area, regardless of whether the building was covered by flood insurance.
The game coastal towns play is to improve their community rating by making nearly everyone substantially damaged. How do they do this? They don’t calculate the market value of the structure. They use the ‘improvements’ value of the tax assessment, and guess what? They pump up the land value, and devalue the improvements number. That’s why your house which would cost a minimum of $150,000 to rebuild only has a tax assessed value of $49,500, and your land is worth $540,000. Nice, huh?
Ok. You are stuck. You have to elevate, or reconstruct the building at a higher elevation. There are grants for doing both. They don’t pay everything though, so you have to decide if you are going to make an investment in the property, or walk away.
WORKSHEETS DESIGNED FOR EVERYONE TO USE!
In most cases, if you elevate the existing structure, or reconstruct at a higher elevation, you are going to be building value into the property. The rare case where you are going to lose value is if you don’t use the services of a qualified designer and the new elevation is more of a hindrance than a design benefit. You may have to put on your ‘real estate developer’ hat for a little while and look at what is happening in the larger picture. Is your neighborhood up-and-coming? Is it possible your area is in decline and going to continue in that direction? This is where you have to decide all over again if you would invest in real estate where your home is located. If the answer is “no,” then maybe it is time to get out and cut losses while you can.
Should I LIFT, or REBUIILD?
It comes down to residual value. Will the cost of flood hazard mitigation outweigh the value remaining in your property? How are you going to find out? Guess? No. Don’t guess. If you have arrived at this point the decision is lifting the existing structure, or demolishing it and rebuilding at a higher elevation. Unless you are a property developer, contractor, engineer, or architect, you probably don’t have too much experience with detailed cost estimating of construction projects.
Write it down! Oh, great… Of course.. but how? We have compiled worksheets designed for everyone to use to calculate to the dollar, exactly what each option will cost. You may need to partner with a contractor to get prices, or you can consult sources online. You can work the phones and fill out the sheets. You will get to the final numbers and the information will guide your decision.
WITH THESE WORKSHEETS…
- GO AT YOUR OWN PACE!
- KEEP TRACK OF ALL ESTIMATES FOR WORK THAT YOU RECEIVE
- INSTANTLY COMPARE PRICES
- CATALOG THE ‘HIDDEN’ COSTS OF CONSTRUCTION
- BE ABLE TO JUSTIFY COSTS TO YOUR INSURANCE COMPANY
- APPLY FOR ADDITIONAL GRANT MONEY
- Deluxe Edition INSTANTLY SUBTOTALS & TOTALS RESULTS
- COMPARE TOTAL COSTS
- ELIMINATE THE CONFUSION ABOUT COSTS…permanently!
- CALCULATE YOUR ADDED VALUE
For a limited time, LAWRENCE S. SCHREIBER, AIA, has authorized special FREE USE licenses for these worksheets when you download today!