From New Jersey to the Long Island and Connecticut shores, tens of thousands of homeowners face major repairs to homes, and thousands of structures have been totally destroyed by Hurricane Sandy’s storm surge. But “rebuilding” will not mean simply putting back what was there — in many cases, homes will have to comply with tougher standards than before.

Connecticut architect Russ Campaigne works in coastal Connecticut, with offices in Guilford. As one half of a husband-and-wife architecture firm called Campaigne Kestner Architects, Campaigne designs and supervises construction on high-end waterfront homes as well as high-performance, energy-efficient houses both on the shore and inland.l

Campaigne’s region got a wake-up call last year with the arrival of Hurricane Irene, he says — and Sandy’s flooding, less than a year later, has driven home the lesson. Property owners are taking notice. “After Irene, I put out six or seven proposals for lifting homes, and I think I got one response,” he says. “Now, after Sandy, if they’ve been flooded twice, it’s 100% uptake: everybody is looking. They are at least asking us to test the cost and feasibility of lifting the house up and putting a foundation under it to make it FEMA-compliant.”

Campaigne has lots of experience with that type of job — because along the Connecticut shore, enforcement of FEMA’s “50%” rule has been rigorous. Under federal regulations, residents of any town are only eligible to get flood insurance from the FEMA-backed National Flood Insurance Program (NFIP) if the town participates in the program. That means the town has to have codes or zoning rules in place that require any building that is renovated or remodeled in a designated flood zone to come into compliance with FEMA standards for construction in the floodplain — that is, if the cost of the renovations exceeds 50% of the value of the building. At a minimum, compliance means that the first occupied floor of the residence has to be one foot above FEMA’s official Base Flood Elevation (BFE) as marked on flood maps of the area. Towns may or may not require an additional foot or two of “freeboard” above the BFE — but if a house does have two feet of freeboard, flood insurance premiums for the building drop drastically.

For a house that was flooded, just the flood repairs could end up crossing that 50% cost threshold. But it doesn’t take a flood to trigger the rule, Campaigne explains: “Say you decided to put in a kitchen in a nonconforming house, and you were going to spend $70,000 on appliances and $80,000 on cabinets. Well if that added up to more than 50% of the value of the house, that would trigger the requirement to elevate the building.” Even on Connecticut’s pricey shoreline, homes may be valued at less than double the cost of a typical remodel, Campaigne explains, because of the way the town property assessments work. “The assessment cards here tend to overvalue the land and undervalue the building,” he says. “So some of the shore cottages, while you and I may know that it would cost hundreds of thousands of dollars to build it, on the field card they only show $200,000 or $300,000 of value in the house. So if you do a $150,000 renovation on that house, you’re supposed to bring it up to 100% compliance with FEMA. We’ve been involved in a lot of projects where just winterizing or adding a kitchen would jump that threshold.”

After Irene, some homeowners and their contractors played games with estimates and contracts in order to escape the 50% rule during flood repair work, says Campaigne. “People pulled a permit for exterior structural damage to stay under it,” he explains, “and then immediately in 2012 pulled another permit for a different piece of the work which was in a new annual year, so FEMA allowed them to spend that money again without elevating.” FEMA rules still allow that gambit, says Campaigne, but some towns in Connecticut are considering measures to broaden the time window to three or even five years, so that homeowners who take out multiple permits for cumulative work would be required to bring structures into compliance with FEMA standards.

FEMA is Watching

In Connecticut, says Campaigne, enforcement of the NFIP 50% rule is through town zoning bylaws. Some towns are lax about it, he says, but that can hurt homeowners. “East Haven homeowners pay a much higher rate for flood insurance because the whole town has been penalized after a FEMA audit,” he says. “They found that the municipality was not properly enforcing the code from FEMA that they had adopted, and were allowing higher investments be made in houses in the flood zone and have a higher potential rate of loss for FEMA. So they will pay a higher rate for a while until they get audited out of it. So the towns are scared, and I’ve definitely been seeing much more awareness and education and enforcement on those rules.”

So what’s involved in bringing a house into FEMA compliance? For many houses he works on, the process is relatively straightforward, Campaigne explains: “It’s getting your first floor level up to base flood elevation. In the V Zone you’ll build a pier foundation, or in the A zone we’ll build a perimeter wall foundation with flood vents where needed, or a slab on grade. We’re mostly dealing with wood frame construction, and a lot of the cottages on the shore were originally built on granite piers set vertically. So they are already set up with an 8-foot grid pier foundation underneath them, and they actually lift pretty easily. It costs about $28,000 or $30,000 to lift a house, just for the lifting costs — you crib it up high enough to work underneath it, and then drop it back down onto a new foundation. The foundation costs are in addition to that. Bottom line, it costs about $100,000 to $125,000 to take a $3,000-sqft house up to compliance. And you have to bring all the utilities and everything up — your electrical meter has to be up above the BFE, and your gas fills and oil fills and all that. You have to ballast your propane tanks. There are a lot of little pieces that go into making it compliant.”

If a house is not mortgaged, no law says that a homeowner has to carry flood insurance. So wealthy homeowners who don’t need to borrow to build or remodel a house could opt not to insure. But as Campaigne notes, today’s very low interest rates are a tempting opportunity for borrowers. “Really, it’s only when you have a mortgage that you have to pay for insurance. But how can you leave 3% interest rates on the table? So everybody is mortgaging; and so everybody has to have flood insurance.”

The insurance itself is not much of a deal for Campaigne’s clientele. “I know some people that aren’t mortgaging and who self-insure against this, just because the rates are so high and because the payout is so difficult, and so little. And it’s a very long delay before they pay out. FEMA adjusts it, they tell you what you get, and you get it, but you get it six months after you’ve already fixed the place. It’s a really difficult process, and people are very frustrated by that.”

But if you do carry insurance, the benefits of elevating the house to comply with FEMA standards are significant, says Campaigne. “We take that 3000-sqft house, a house that had $7,000 dollar a year flood insurance rate — before Irene — and once we made the house compliant, in the exact same location, their flood insurance premium went down to $400 a year. When you bring things into compliance, the flood insurance premium is next to nothing.”