Notice of Determination
If you get one of these letters, here is some good information. Ravenswood is going through this right now and I have borrowed this from their postings:
You can also email [email protected] with your address and information and he can see what information he can find.
In plain English, the City of Indianapolis has officially decided that this building was “substantially damaged” by the August 14–19 flooding. Under floodplain regulations, “substantially damaged” means the estimated cost of restoring the building to its pre-flood condition is at least 50% of the value of the building before the flood.
For example, if the city determined that the structure itself was worth $200,000 before the flood, and repairing the damage would cost $100,000 or more, it crosses the 50% threshold.
That calculation generally concerns the value of the structure, not the land underneath it. It also does not necessarily mean that 50% of the physical house was destroyed. A house can still be standing and looking fairly intact while the estimated cost of replacing drywall, electrical systems, HVAC, flooring, insulation, cabinets, structural components, etc., pushes the repair estimate over 50%.
The important consequence is this sentence:
“…must be brought into compliance with this Ordinance.”
Because the property is apparently in a Special Flood Hazard Area, Indianapolis will not simply allow the owner to repair it exactly as it was. Before issuing permits, the city can require the building to meet the current floodplain requirements.
For a residential property, that can potentially mean elevating the house so the required parts of the building are above the regulatory flood elevation. Depending upon the particular property and construction, other approaches may be possible, but simply replacing everything at the old elevation may no longer be permitted.
The letter is not saying:
* “Your house is condemned.”
* “You must demolish it immediately.”
* “You have to move out permanently.”
* “The city owns your property now.”
It is saying, essentially: “The damage is severe enough under floodplain law that ordinary repair rules no longer apply. Talk to us before doing reconstruction.”
There is another potentially important part of the letter: ICC coverage. If the owner had a National Flood Insurance Program flood-insurance policy in effect when the flooding occurred, “Increased Cost of Compliance” coverage may provide additional insurance money specifically for the cost of complying with floodplain requirements. That money can potentially be used for things such as elevation, demolition, relocation, or certain floodproofing measures, depending upon eligibility and the type of structure.
I would not start major repairs until this is sorted out. The letter explicitly warns that work done without the proper permits can be considered noncompliant.
The next thing I would do is contact Maurice Higgins, the Indianapolis Floodplain Administrator listed on the letter, and ask for the actual numbers behind the determination. In particular, I would ask:
1. What pre-damage structure value did the city use?
2. What estimated repair cost did the city use?
3. Can I have a copy of the Substantial Damage Estimate or worksheet used to make the determination?
4. Exactly what improvements will be required to bring this particular house into compliance?
5. Does the house have to be elevated, and if so, to what elevation?
6. Is there a process for challenging or requesting reconsideration of the substantial-damage determination if the valuation or repair estimate appears incorrect?
7. What permits can be issued now?
8. If there is an NFIP policy, what documentation does the owner need for an ICC claim?
The most important issue is really the math behind that 50% determination. If the city valued the structure at $160,000 and estimated repairs at $85,000, for example, the property barely crossed the threshold. If the structure was valued at $160,000 and repairs were estimated at $150,000, that is an entirely different situation.