FEMA Substantial Damage Estimator (SDE) Tool V2.0

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Agenda

1. SDE Definition

2. SDE Tool Objectives

3. SDE Tool Functions

4. Interactive Overview of the SDE Tool 2.0

5. Field Preparations

6. SDE Inspections

7. Recent SDE Tool Updates

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Substantial Damage (SD) Definition

Damage of any origin sustained by a structure whereby the cost of restoring the structure to its pre-damaged condition would equal or exceed 50% of the market value of the structure before the damage occurred.

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Damage of Any Origin

• “Any” refers to almost all sources of damage, including those unrelated to the current disaster (i.e., fire, termites, previous flood damages, etc.)

• Exceptions include damage associated with poor maintenance (i.e., peeling paint)

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SD Equation

Percent Damage = Cost of Repairs x 100 Value of structure

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SDE Tool Objectives

1. Assist state and local officials in rapidly estimating structure values and damage costs for structures based on visual inspections

2. Allow users without appraisal, cost estimating, or design backgrounds to develop reasonable estimates of structure values and damages

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SDE Tool Objectives

3. Determine substantial damage in accordance with the requirements of the NFIP

4. Use for multiple types of structures

• Single and multi-family structures

• Manufactured homes

• Non-residential structures

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SDE Tool Objectives

5. Meet requirements for ICC claims

6. Minimal user judgment (3 primary areas)

a) Initial construction quality

b) Depreciation

c) Percent damage by building element

7. SDE Tool use is optional (but highly encouraged)

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SDE Tool Functions

1. The SDE tool is based using damage estimates for individual building elements to determine whether the structure as a whole is substantially damaged.

2. Depending on the type of structure and specific attributes of the structure, the tool calculates the value of each building element as a percentage of the total building.

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SDE Tool Functions

3. Enter structure attributes – foundation type, roof covering, etc.

4. Enter size (and unit cost data and geographic adjustment factor) or structure value (adjusted tax data or appraisal amount for the structure only)

5. Enter cost adjustments

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SDE Tool Functions

6. Enter initial construction quality

7. Select depreciation rating

8. Record percent damage by building element

9. Add photos & files

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Building Elements

1. Construction components that are evaluated to make a SD determination

• 12 elements for residential structures

• 7 elements for non-residential structures

2. Elements include:

• Foundation

• Roof covering

• Exterior finish, etc.

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SDE Records vs. Assessments

Records – involve only property data (SDE Tab 1 – Address data, can be pre-loaded using SDE Enterprise Import function)

Assessments - involve both property data and field recorded data (SDE Tabs 1 – 4)

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Populate the Database

Tab 1 - Address information

Tab 2 - Site, Damage, and NFIP information

Tab 3 - Base Cost

Tab 4 - Percent Breakdown

Tab 5 - Output Summary

Tab 6 - Files & Photos

Note: Tab 7 – Used only if user has multiple assessments for the same record (i.e., the same address)

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Interactive Overview Interactive Overview

of the of the

SDE 2.0 ToolSDE 2.0 Tool

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15 Minute Break

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What SD Determinations Mean for Local Officials

1. Required under the NFIP and the local floodplain management ordinance

2. Requirements apply only to structures within the 100-year floodplain

3. May also be required under a local building ordinance

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What SD Determinations Mean for Local Officials

4. Substantially damaged structures must either be elevated above the BFE, demolished or removed from the SFHA

5. Non-compliant construction may result in daily fines and removal of non-compliant repairs or improvements

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Flood Insurance Issues

Substantially damaged structures rebuilt in violation of the community’s floodplain ordinance and not elevated above the BFE will have significantly higher flood insurance premiums

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Increased Cost of Compliance (ICC)

1. An additional claim payment to help cover the cost of bringing a substantially or repetitively damaged structure into NFIP compliance

2. The claim must be a direct result of a flood loss

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ICC

3. ICC claim can be used for elevating, demolishing, or moving a structure outside the SFHA

4. Owners can only receive ICC claims if the local floodplain administrator has determined that the structure is substantially damaged due to flooding

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ICC

5. The 1-page or 5-page SDE reports are sufficient documentation for the ICC claim (suggest using 5-page report)

6. Refer to FEMA 301: Guidance for State and Local Officials, Increased Cost of Compliance Coverage (search on “ICC FEMA 301”)

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General Guidance

Consider the repairs necessary to get the structure up to local building code

requirements and to make it marketable

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SD vs. Uninhabitable Structures

• A SD structure is usually uninhabitable due to damages of 50% or more

• However, structures may be uninhabitable due to health reasons or a lack of utilities

• Damages for uninhabitable structures may be considerably less than the 50% threshold needed for SD

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Basics for SD Determinations

1. Primary concern are structures with damages in the range of 40% to 60% – these are the SD assessments that are most likely to be appealed

2. The target is to determine if damages are 50% or greater (not concerned with 57% vs. 61% damage)

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Acceptable Methods for Structure Values

1. Computed Actual Cash Value (ACV) based on unit costs and depreciation (developed within SDE)

2. Professional Appraisal

3. Adjusted Tax Assessed Value

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Structure Quality

1. Refers to the initial construction quality as defined in an industry-accepted cost estimating guide

2. There are 5 quality levels in SDE – low, budget, average, good, and excellent

3. Quality does not directly impact the SD determination. It is used to select the appropriate unit cost value for the base cost

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Structure Quality

Refer to a cost estimating guide for descriptions of the various qualities of:

Foundations Interior Finish

Floors HVAC

Exterior walls Electrical

Roof Plumbing

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Unit Cost Data

• Unit cost data is required if you want to develop the computed ACV using the SDE tool

• Verify that proposed unit costs are valid for your community

• Record the source and date of the unit cost data in SDE (bottom of Tab 3 – Cost)

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Sources of Unit Cost Data

1. Industry-accepted cost guides

2. Building permit data

3. Adjusted tax data

4. Professional appraisals

5. Shared data from near-by communities

6. Discussions with contractors or realtors

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Sample Unit Cost Table

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Depreciation

• In SDE 2.0 - based on structure condition

(no longer based on the year of construction)

• Assessments previously developed within SDE 1.0 will retain their original depreciation values when imported into SDE 2.0

• Only assessments developed in SDE 2.0 can

use the new depreciation methodology

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Damage vs. Poor Maintenance

• In separating damage from poor maintenance (i.e., peeling paint, rotted eaves), consider the repairs necessary to bring the structure up to local building code and to make it marketable

While peeling paint may affect the selling price, it will not be the deciding factor in whether or not the structure sells

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Acceptable Methods for Cost of Repairs

1. Computed Damages based on a “percent damaged” (from SDE)

2. Contractor’s cost estimate of repairs – need to review to verify that it’s reasonable and complete

3. Community cost estimate of repairs

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Caution for Damage Estimates

Donated or discounted labor and materials must be evaluated at fair market value because a substantial damage determination requires use of the true cost of repairs

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Consistency and Equity

To ensure consistency and equity for all structure owners, officials are strongly encouraged to select only one method each for the initial structure values and repair costs and to use the selected method for the entire community

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Field Preparations

1. Encourage use of two-person inspection teams

2. Alert police, EMA, and other community departments of target inspection areas prior to field deployment

3. FIRMs, Flood Recovery Maps, or Tax Maps

If possible, transfer SFHA boundaries to a local address or street map so that teams don’t inspect more structures than needed

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Field Preparations

4. Field supplies (100-ft tape measure, clip board, pens, etc.)

5. A laptop with the SDE tool installed

6. Blank SDE Damage Inspection Worksheets (either for data collection or backup for a laptop)

(Found in App. B of the SDE Field Workbook)

7. Boundaries (by street) for the target inspection areas for the current day

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Field Preparations

8. Letter of Introduction, on community letterhead, with name, phone & e-mail of someone that residents can call

9. Camera, batteries, photo cards, cable, etc.

10. GPS units, with instruction manuals

11. Cell phones or two-way radios

12. List of Contacts – police, community EMA, other departments

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Field Preparations

13. Mark completed areas on a project map at the end of the day for all field teams

14. For large inventories, consider using one physical file folder per structure to hold:

• Address and tax information prior to inspections

• SDE 1- or 5-page structure reports, appraisals, photographs, and estimates or repair after inspections

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SDE Inspections

1. Review SFHA boundaries with respect to inventory areas

2. Obtain and record structure photo and GPS coordinates

3. Walk around exterior inspection

4. Verify that structure is safe to enter

5. Room-by-room interior inspection

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SDE Inspections

6. Record on either SDE Damage Inspection Worksheets or on a laptop computer:

a) Building dimensions

b) Initial construction quality

c) Cost adjustments

d) Depreciation

e) Percent damage by structure element

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Estimating Structure Dimensions

1. Exact dimensions are not required

2. Consider structure shape as a rectangle or a series of rectangles

3. Ignore small changes in shape (bay windows, pulled out entrances, fire place pads, etc.)

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Manufactured Housing

Where 1 inch can = 5 feet

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Updates from SDE 1.0 and 1.1

1. View/Search All Records – facilitates review and editing of individual assessments

2. Bulk Property Editor – facilitates large scale data editing

3. Delete All Data Function – Tool submenu

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Updates from SDE 1.0 and 1.1

4. Default Data Function – pre-enter data for 22 of the most commonly used fields

• Speeds up data entry, reduces errors

• User prompted to use it for every new assessment

5. No Physical Damage checkbox – Tab 2

6. Direct entry of square footage

7. Revised depreciation methodology

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What the SDE Provides:

1. A formalized approach for collecting and estimating substantial damage

2. Reasonable and defensible structure replacement costs and damage estimates

3. A method acceptable for NFIP compliance

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What the SDE Does Not Provide:

1. Exact answers

2. Consistent approach on a community-wide basis (this is up to the local official using the tool)

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FEMA 213

• Title: Answers to Questions About Substantially Damaged Buildings This provides official NFIP guidance on determining substantial damage and substantial improvement

• Also provides guidance on post-disaster permitting

• www.fema.gov – search on: “FEMA 213”

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Contacts:

IL DNR

Paul Osman 217-782-4428Paul.Osman@illinois.gov

Brian Eber - NE Area Administrator

847-608-3100 ext. 3-2059Brian.Eber@illinois.gov

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Questions ?

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