White Paper Learnings: Substantial Improvement and Substantial Damage 

Our team at Forerunner recently released a new Substantial Improvement and Substantial Damage (SI/SD) feature (yay!). We’re particularly excited about this development because we’ve heard from many of our partners that staying on top of tracking and project management can be a big challenge for communities interested in adopting higher regulatory standards like cumulative substantial improvement. In conducting research for the feature, we found that communities that are considering more stringent regulation of local construction have limited access to best practice information – they don’t really know what other communities are up to. To learn more, we interviewed floodplain administrators around the country to understand how they create ordinances, track property costs, and communicate with residents. Our findings are consolidated in a recently published white paper (check it out here). Here are some highlights from our findings:

Despite the availability of SI/SD resources, local municipalities still find requirements hard to navigate.

FEMA provides multiple resources outlining SI/SD requirements, including the SI/SD Desk Reference and Answers to Questions About Substantially Improved/Substantially Damaged Buildings. While a large amount of documentation exists on minimum SI/SD practices, communities we spoke with were still confused about implementing SI/SD practices locally.

Part of the reason for this might be the guidance flexibility in FEMA’s documentation. For example, there are a variety of acceptable methods for determining the costs of improvements and damages – a community can request itemized lists of materials and labor costs, use building valuation tables, create a “Qualified Estimate”, obtain cost estimates submitted by the owner of the structure, or use FEMA’s Substantial Damage Estimator Tool. This diversity of options also exists for other parts of the SI/SD administration process, with multiple suggested approaches for determining a structure’s market value and tracking costs to a structure. 

On one hand, this variety of acceptable approaches allows communities to personalize administration to their resources and needs. However, with limited guidance on how to choose between diverse options, floodplain administrators are forced to independently determine best practices for their community. 

In our interviews, we were met with a few recurring questions about how to best approach these support mechanisms for administering SI/SD:  “How do you pass building codes?”, “How do you create stricter SI/SD ordinances?”, and “What is the best way to record costs for a structure?”. This highlights a need for both documentation and knowledge sharing between communities about best practices. We address this in our white paper by providing case studies that shed light on some of the tradeoffs and decisions made in administering cumulative substantial improvement.

Many communities have cumulative SI/SD ordinances, but some struggle with enforcement.

Though the minimum requirement for SI/SD tracks costs independently in relation to the threshold, we found that many communities elect to adopt stricter SI/SD requirements by tracking costs cumulatively—with time limits ranging from 1 year to the lifetime of the structure. This is especially true for communities participating in the Community Rating System (CRS), since CRS credits are awarded for higher standards. In our conversations with communities that track substantial improvement cumulatively, a number of benefits beyond CRS credits were articulated: the reduction of severe repetitive loss properties, more rapid adaptation to sea level rise, better oversight over construction. 

Along with these benefits come enforcement responsibilities, however, and several individuals mentioned that the administrative burden of tracking substantial improvement was unexpectedly difficult. More than one community reverted their floodplain ordinance to standard SI/SD after finding the duty unsustainable.

To keep up with tracking cumulative SI/SD, many communities use informal methods to record costs.

Floodplain professionals working to enforce cumulative substantial improvement and damage must develop a system for tracking and aggregating the costs for a property over the cumulative time limit. As with other decisions surrounding SI/SD, the administrators we interviewed had difficulties determining the most efficient and effective way to do this tracking. In our white paper, we explore different communities’ solutions to this challenge, which range from creating informal spreadsheets to repurposing permitting software. Our new SI/SD feature also addresses this difficulty, providing a unified platform to track improvements and damage for each property in a floodplain.‍

We expected resident communication around SI/SD standards to be a primary pain point for communities. In reality, it’s a lot easier than the workflow challenges.

Given the complexity of requirements, explaining SI/SD determinations to constituents is often high-touch work. However, since floodplain professionals typically engage in 1-1 resident education outside of substantial improvement, SI/SD communication didn’t present a big challenge to most of our interviewees.  They cited multiple strategies to communicate with residents, including literature drops, phone calls, and face-to-face communication. Most administrators found that speaking directly with constituents was most effective, as residents often had follow-up questions about the requirements. 

To read more about our learnings, check out our SI/SD Guide here.