City of Punta Gorda, FL
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As a participating community in the National Flood Insurance Program (NFIP), it is the city’s responsibility to access improvements or reconstructions to any building structures inside a flood hazard area and does not meet current elevation code requirements, no matter the cause of damage.
Any building or structure located in these areas where the cost of proposed improvements or repairs equals or exceeds 50% of the market value of a structure minus the land value is considered a Substantial Improvement (SI) or Substantially Damaged (SD) and must be brought into full compliance with the local floodplain management regulations and Florida Building Code.
To be considered compliant, the finished floor elevation of the structure would be required to be at the Base Flood Elevation (BFE) + 1’ freeboard for A zones. For V zones, the bottom of the lowest horizontal structural member would be required to be at the Base Flood Elevation (BFE) + 1’ freeboard. Below is an overview of the factors considered when evaluating potential SI/SD structures. Please note that the City of Punta Gorda’s regulations apply only to properties in the city limits. By following the established guidelines and requirements mandated in City of Punta Gorda’s Floodplain Management Ordinance and Florida Building Code, residents help maintain eligibility for discounted flood insurance rates through the NFIP.
Understanding Substantial Improvement and Substantial Damage
In flood hazard areas, if all proposed work, including repairs, work required because of a change of occupancy, and alterations, constitutes substantial improvement, then the building shall comply with Section 1612 of the Florida Building Code, Building, or Section R322 of the Florida Building Code, Residential, as applicable.
Exception: If the program that designated the building as historic determines that it will continue to be an historic building after the proposed work is completed, then the proposed work is not considered to be substantial improvement. For the purposes of this exception, an historic building is:
1. Individually listed in the National Register of Historic Places; or
2. A contributing resource within a National Register of Historic Places listed district; or
3. Designated as historic property under an official municipal, county, special district or state designation, law, ordinance or resolution either individually or as a contributing property in a district, provided the local program making the designation is approved by the Department of the Interior (the Florida state historic preservation officer maintains a list of approved local programs); or
4. Determined eligible by the Florida State Historic Preservation Officer for listing in the National Register of Historic Places, either individually or as a contributing property in a district.
When buildings or structures undergo the repair or improvement, it is an opportunity for the city’s floodplain management to reduce flood damage of a building or structure. The Florida Building Code defines SI/SD as follows:
SUBSTANTIAL DAMAGE. For the purpose of determining compliance with the flood provisions of this code, 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.
SUBSTANTIAL IMPROVEMENT. For the purpose of determining compliance with the flood provisions of this code, any repair, alteration, addition, or improvement of a building or structure, the cost of which equals or exceeds 50 percent of the market value of the structure, before the improvement or repair is started. If the structure has sustained substantial damage, any repairs are considered substantial improvement regardless of the actual repair work performed.
Costs to Include When Estimating Repairs or Improvements
When determining Substantial Improvement or Substantial Damage (SI/SD), all costs associated with the proposed work must be included in the total Cost of Repair. These costs help ensure an accurate comparison to the structure’s market value. Here are some examples:
- Materials and Labor — All materials and labor required to complete the work, including donated or discounted materials and any owner-performed or volunteer labor (calculated at market rate).
- Structural Components — Costs to repair or replace structural framing, foundation elements, walls, floors, roof systems, and similar components.
- Demolition and Debris Removal — Expenses for demolition, disposal of debris, and related site cleanup.
- Contractor Overhead and Profit — Standard contractor administrative costs, overhead, and profit.
- Building Utility and Service Equipment — Costs to repair, replace, or relocate electrical, mechanical, plumbing, and HVAC systems.
- Elevation Work — Any expenses related to elevating for flood compliance.
- Floodproofing Work (commercial) — Floodproofing or otherwise modifying the building for flood compliance.
- Site Preparation — Grading, fill, temporary access, or other site work directly related to the repair or improvement project.
- Code and Regulatory Compliance Costs — Any expenses necessary to meet current building codes, floodplain regulations, or other required standards.
- Interior and Exterior Finishes — Flooring, drywall, paint, trim, cabinetry, exterior siding, roofing, windows, doors, and similar finish components.
Acceptable Methods for Estimating Market Value
To determine Substantial Improvement or Substantial Damage (SI/SD), the structure’s market value must be established. Acceptable sources for determining market value include:
- Independent Professional Appraisal
A licensed appraiser may provide an appraisal that excludes the value of the land and does not use the income capitalization approach. Only the structure’s value should be considered. - Actual Cash Value (ACV) Calculation
A detailed estimate of the structure’s replacement cost minus depreciation based on age and condition. In most cases, ACV closely reflects the building’s true market value. Communities may use ACV when there is limited sales data or few comparable properties. - Adjusted Assessed Value
Property assessments used for taxation may be accepted if the tax appraiser provides an adjustment to reflect current market conditions. This results in an adjusted assessed value for the structure. - NFIP Claims Data
For structures with previous National Flood Insurance Program (NFIP) claims, the building value listed in the claims documentation (usually Actual Cash Value) may be used as the structure’s market value.
Related forms
Substantial Damage Worksheet Process for Determining Substantial Damage
Related Links
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