Nathan Colmer | The Van Dyk Group
C: 609.290.4293 | O: 609.492.1511
Building a new home on LBI can not only lower the cost of your insurance, it can also be a great long term investment! When a piece of vacant land or a tear down home is purchased for the right price and a home is built on budget a buyer should be able to realize immediate equity in the home and, if they chose to do so, sell for a profit.
It is important to understand the rules and regulations associated with LBI construction zoning. While it of course best to speak with an architect who can advise you on the most up to date codes, there are a few constants that can be followed when building a new home in the LBI real estate market. These constants can help to identify the best building sites and the best investment opportunities in the Long Beach Island real estate market.
Building a new home has to conform to not only the local Long Beach Island town rules but also to the current FEMA guidelines. The rules and regulations for the local municipalities of Long Beach Island will vary so it is best to specifically discuss a project to determine what can and what cannot be done with a specific site. For example, Long Beach Township allows for 33.3% lot coverage for the footprint of a home (which will be comprised of living space and decks) assuming you meet the setback requirements. Beach Haven and Harvey Cedars mandate that living space not exceed 50% of the total lot size but are less restrictive on the deck guidelines.
All properties on Long Beach Island have a base flood elevation associated with them. There are three predominate flood zones on LBI. They are an “A” flood zone, a “V” flood zone and a “X” flood zone. The majority of Long Beach Island falls into the “A” flood zone. Homes in an “A” zone are permitted to have solid block or piling foundation systems, and usually fall into a Base Flood Elevation (BFE) of 7-9 feet.
“V” zones are the most restrictive with higher elevations (usually 9-15 feet), and limitations on what can be used as a foundation system. For example, solid wall foundations (blocks) are not permitted, as the foundation system needs to have break away walls. “V” zones are mostly limited to the oceanfront and some bayfront areas on LBI. The “X” zone is actually the best zone to be in, as it is the least restrictive, with some lenders not even requiring flood insurance in these zones!
FEMA defines an A”” and “AE” flood zone as having a 1% chance of an annual flood (it is partly from this definition that the term “100 year storm” comes from when speaking of Hurricane Sandy). Homeowners in an “A” or “AE” flood zone on Long Beach Island can expect the following:
Due to FEMA’s interpretation that flooding will be less destructive in an “A” or “AE” flood zone, flood insurance is less expensive than a “V” zone. In order for a property to be zoned a “V” zone on LBI, FEMA must ascertain that the subject property will sustain the direct impact of a 3 foot or higher wave. In the eyes of FEMA, properties on LBI in an “A” or “AE” flood zone do not share this risk. It is for this reason that homes in “A” and “AE” flood zones can be built on a solid block foundation with flood vents rather than the break away wall system required in a “V” zone. For some buyers, an “A” or “AE” flood zone on Long Beach Island will be more attractive in the real estate market. In the wake of Hurricane Sandy, the LBI real estate market has become very reactionary to flood zones and flood insurance. Many buyers are concerned with the potential for flood insurance rate increases, and the impact these increases will have on the future value of the Long Beach Island real estate market. The good news is, most homeowners will see very manageable rate increases.
A “V” flood zone is considered to be an area of higher risk. Therefore, flood insurance rates tend to be higher in a “V” zone as compared to an “A” zone. Also, there are building restrictions and additional methods that are recommended to safeguard the house. It is very important to understand new construction in a “V” zone on Long Beach Island, NJ. In short, homes must be built higher, with breakaway walls, and to achieve the best rate, built without enclosures below the structure. When building in an “A” or “V” zone, both FEMA and the towns on LBI have established a minimum required height, often known as the BFE (Base Flood Elevation). Building higher than the BFE will lower both the flood insurance premium on LBI as well as future flood risk. A helpful example is offered by FEMA to demonstrate that by building higher, the flood insurance rate (premium) on Long Beach Island will drop significantly
There are two foundation systems commonly used for new construction on Long Beach Island. The most common is a piling support system with a breakaway wall foundation and flood vents. This system will be viewed as less risky by insurance companies, and can often result in a discount on the flood insurance premium. Less commonly used are block foundations. Although this was the go to method for homes built in the early stages of development on LBI, these systems are rarely used for new homes on LBI. You do see this foundation system commonly used for raising homes on LBI. In either case, flood vents are an important upgrade that can significantly raise or lower the cost of flood insurance on LBI. The rule of FEMA, and to meet code, you need 1 square inch of flood vent for every 1 square foot of enclosure. Regardless if your plan is to buy a knock down on LBI or build on an existing property, keeping in mind the guidelines imposed by FEMA will not only lower your risk, it will also save you money in the long run!