Substantial Improvement/Damage 8-26
2. The project must maintain the historic status of the structure. If the proposed
improvements to the structure will result in it being removed from or ineligible for the National
Register or federally-certified state or local inventory, then the proposal cannot be granted an
exemption from the substantial improvement rule.
The best way to make such determinations is to seek written review and approval of
proposed plans by the local historic preservation board, if it is federally-certified, or by the state
historic preservation office. If the plans are approved, you can grant the exemption. If not, no
exemption can be permitted.
3. Take all possible flood damage reduction measures. Even though the exemption to the
substantial improvement rule means the building does not have to be elevated to or above BFE,
or be renovated with flood-resistant materials that are not historically sensitive, many things can
and should be done to reduce the flood damage potential. Examples include:
• Locating mechanical and electrical equipment above the BFE or flood-proofing it.
• Elevating the lowest floor of an addition to or above the BFE with the change in floor
elevation disguised externally.
CORRECTIONS OF CODE VIOLATIONS
The NFIP definition of substantial improvement includes another exemption:
44 CFR 59.1 Definitions: "Substantial improvement" means …. The term does not, however,
include … Any project for improvement of a structure to correct existing violations of state or local
health, sanitary, or safety code specifications which have been identified by the local code
enforcement official and which are the minimum necessary to assure safe living conditions
Note the key words in this exemption: correct existing violations, identified by the local
official, and minimum necessary to assure safe conditions. This language was included in order
to avoid penalizing property owners who had no choice but to make improvements to their
buildings or face condemnation or revocation of a business license.
This exemption was intended for involuntary improvements or violations that existed before
the improvement permit was applied for or before the damage occurred—for example, a
restaurant owner who must upgrade the wiring in his kitchen in order to meet current local and
state health and safety codes.
You can only exempt the items specifically required by code. For example, if a single stair
tread was defective and had to be replaced, do not exempt the cost of rebuilding the entire
stairway. Similarly, count only replacement in like kind and what is minimally necessary. If the