THE ULTIMATE LBI BUYER’S GUIDE
Everything You Need to Know About Buying a Home on Long Beach Island
House Raising
Information about LBI house raising, flood insurance, Hurricane Sandy and the LBI NJ real estate market. House raising has become a big business on Long Beach Island New Jersey since Hurricane Sandy in an effort to lower flood insurance costs.
If you are required to raise your house, or you decide the costs are worth the added piece of mind, it is important to understand the process of raising a house on LBI NJ. Among the items needed to get started, you will need the following:
An engineering report on the structural soundness of the house.
A soil test to determine if the house will be raised on blocks or pilings.
A survey and flood elevation certificate.
Disconnection letters from the utility companies.
Flood Insurance, Hurricane Sandy and House Raising in the LBI NJ Real Estate Market
Most of the homes that are being raised on Long Beach Island are the 1950' s era Cape Cod homes. Traditionally, the houses were built on a block foundation. If the house being raised is located in an “A” flood zone, then the block foundation is still permitted. If the house is located in a “V” flood zone, then a breakaway wall system is needed to meet building requirements. There are cases when even in an “A” flood zone pilings will be required, as sometimes the soil cannot support the additional block foundation. Once all the required items are collected, the house raising company will come, elevate the house, install the additional foundation, and place the house on the new foundation. Afterwards, stairs and decks must be built for access to the house.
It is important to remember that not every house on Long Beach Island needs to be raised. Perhaps this is the biggest falsity concerning house raising on LBI. FEMA has established a Base Flood Elevation or “BFE” for all properties on Long Beach Island. This is the level above sea level to which FEMA recommends a new house be built to or a house be elevated to, should a major renovation take place. The BFE is computed by adding the natural elevation of the ground above sea level with the elevation of the structure. For example:
A house has a Base Flood Elevation (BFE) of 8 feet.
The ground elevation is 5 feet above sea level.
The house must be elevated 3 additional feet to meet FEMA’s requirement.
A house needs to be raised only if the house was “substantially damaged”.
A house is considered to be “substantially damaged” when the costs of repairs exceed 49% of the replacement value of the structure. There are many locations on LBI where the ground elevation is already at Base Flood Elevation. Therefore, no additional elevation would be required to meet FEMA’s minimum standard. There is an inherent advantage to a house that is raised, as it will be safer in future storms and flood insurance will be less expensive.
The cost of raising a house on Long Beach Island will vary, but for most homes the cost will be between $50,000 and $125,000 (I realize that is a wide range but there are a great number of variables that impact the cost). It is important to make sure that the investment is worthwhile, as sometimes the cost of raising will cost more than the finished home is worth in the LBI real estate market.
Build or Raise?
Raising a house is a significant investment and you should make sure the investment is worthwhile. It is very possible to overspend on such a project, especially if the house you are raising requires renovation. In these cases, from a LBI real estate market point of view, you are far better off tearing down and building a new home.
Let's assume you have (or are buying) a 1,500 Sq. Foot Cape Cod style house located on the bayside that needs to be renovated and raised. Using some simple numbers:
Purchase Price: $500,000
Cost to Raise: $75,000
Cost to Renovate: $65,000
Total Investment: $640,000 Current Market Value: $675,000-$700,000
Using the same scenario as a tear down:
Purchase Price: $500,000
Cost to Build: $250,000
Total Investment: $750,000 Current Market Value: $950,000-$975,000
While the overall investment is higher with a new construction, the finished product will be worth considerably more in the current market place. This does not take into account the savings of a more energy efficient house or the enjoyment of all the modern amenities you can install.
REAL ESTATE TIP: Many house raisers charge FAR more than the current market should be. Be sure to obtain multiple quotes to ensure the price you pay is fair.