How Do Siting and Design Decisions Affect the Owner’s Costs?
Home Builder’s Guide to Coastal Construction
FEMA 499/June 2005
Technical Fact Sheet No. 6
Purpose: To show the effects of planning, siting, and design decisions on
coastal home costs.
--When building a coastal home, initial, operating, and long-term costs (i.e.,
life cycle costs) must be considered.
--Coastal (especially oceanfront) homes cost more to design, construct,
maintain, repair, and insure than inland homes.
--Determining the risks associated with a particular building site or design is
--Siting, designing, and constructing to minimum regulatory requirements do not
necessarily result in the lowest cost to the owner over a long period of time.
Exceeding minimum design requirements costs slightly more initially, but can
save the owner money in the long run.
A variety of costs should be considered when planning a coastal home, not just
the construction cost. Owners should be aware of each of the following, and
consider how siting and design decisions will affect these costs:
--Initial costs include property evaluation and acquisition costs and the costs
of permitting, design, and construction.
--Operating costs include costs associated with the use of the building, such as
the costs of utilities and insurance*.
--Long-term costs include costs for preventive maintenance and for repair and
replacement of deteriorated or damaged building components.
Note: Flood insurance premiums can be reduced up to 60 percent by exceeding
minimum siting, design, and construction practices. See the V-Zone Risk Factor
Rating Form in FEMA’s Flood Insurance Manual
One of the most important building costs to be considered is that resulting from
storm and/or erosion damage. But how can an owner decide what level of risk is
associated with a particular building site or design? One way is to consider the
probability of a storm or erosion occurring and the potential building damage
that results (see matrix).
Building sites or designs resulting in extreme or high risk should be avoided —
the likelihood of building loss is great, and the long-term costs to the owner
will be very high. Building sites or designs resulting in medium or low risk
should be given preference.
[Graphic Description] Costs, Hazards, and Damage Vary With Location: Homes
located farther landward may be less appealing to some owners, but will be less
prone to damage and will cost less to build, insure, and maintain. Homes located
closer to the shore may have spectacular views, but are subject to greater
risks, more frequent and more severe damage, and higher construction,
maintenance, and insurance costs.
Note that over a long period, poor siting decisions are rarely overcome by
--How much more expensive is it to build near the coast as opposed to inland
areas? The table below suggests approximately 10 - 30 percent more.
--What about exceeding minimum design requirements in coastal areas? The table
suggests that the added construction costs for meeting the practices recommended
in the Home Builder’s Guide to Coastal Construction (beyond typical minimum
requirements) are nominal.