Substantial Improvement/Substantial Damage

This term identifies the process used to ensure rules of the National Flood Insurance Program, the 2015 Michigan Residential Building Code (MRC) and the City of Midland’s floodplain ordinance are followed when improvements or repairs take place to structures within the 100-year floodplain.  

Substantial improvement (SI) means any reconstruction, rehabilitation, addition, or other improvement of a structure, the cost of which equals or exceeds 50 percent of the market value of the structure before the “start of construction” of the improvement. This term includes structures that have incurred “substantial damage,” regardless of the actual repair work performed.

Substantial damage (SD) 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. Work on structures that are determined to be substantially damaged is considered to be substantial improvement, regardless of the actual repair work performed. 

The basic premise of these rules require that a home or other structure, within the 100-year floodplain, that has been damaged can be rehabilitated to a point where less than 50% of the fair market value is required to repair the structure to pre-damage condition.  If the costs to make the repair are 50% or over of the fair market value, the entire house or structure must be brought up to the floodplain development standards required in the Michigan Residential Code (MRC).  

Requirements of the MRC for SI/SD include raising the structure so the lowest finish floor elevation is at least one (1) foot above the surrounding Base Flood Elevation (BFE).  It could also include filling existing basements, installing flood venting, raising electrical and HVAC equipment above BFE, and other requirements.  

Increased Cost of Compliance

Increased Cost of Compliance (ICC) coverage is one of several resources for flood insurance policyholders who need additional help rebuilding after a flood. It provides up to $30,000 to help cover the cost of mitigation measures that will reduce flood risk. ICC coverage is a part of most standard flood insurance policies available under FEMA’s National Flood Insurance Program (NFIP). 

WATCH NOW: Rebuilding After the Flood Q&A

If you have questions about flood-related issues such as FEMA assistance, permitting and inspection needs, federal flood insurance, and more, check out the video below.

Post-Flood FAQs - What Do I Do Now?

Midland County Emergency Management has compiled a list of frequently asked questions (FAQs) for residents who are recovering from the May 2020 flood. The document contains information on disaster recovery steps, resources for basic needs and financial assistance, and more. Click the button below to download it.

Download the Flood Recovery FAQs

Important References