Projects Subject to Substantial Improvement Rule

When planning a construction project that is subject to FEMA's "Substantial Improvement" rule it is important to breakout the overall costs of the project into items that are included and items that are not included under the rule. The following listing establishes the guidelines for making this determination.

  1. Items to Be Included
  2. Items Not Included
  • All items permanently attached to the structure.

Structural Elements

All structural elements, including:

  • Attached decks and porches
  • Bearing walls, tie beams and trusses
  • Exterior wall finishes (brick, stucco or siding), including painting and decorative moldings
  • Floors and ceilings
  • Hardware
  • Interior partition walls
  • Monolithic or other types of concrete slabs
  • Re-shingling or re-tiling a roof
  • Spread or continuous foundation footings and pilings
  • Windows and doors
  • Wood or reinforced concrete decking or roofing

Interior Finish Elements

All interior finish elements, including:

  • Bathroom tiling and fixtures
  • Built-in bookcases, cabinets and furniture
  • Hardware
  • Kitchen, utility and bathroom cabinets
  • Tiling, linoleum, stone or carpet
  • Wall finishes
    • Drywall
    • Marble
    • Painting
    • Paneling
    • Plaster
    • Stucco
    • Other decorative finishes

Utility & Service Equipment

All utility and service equipment, including:

  • Built-in kitchen appliances
  • Central vacuum systems
  • HVAC equipment
  • Lighting fixtures and ceiling fans
  • Repair or reconstruction of plumbing and electrical services
  • Security systems
  • Water filtration, conditioning or recirculation systems


Also included:

  • Labor and other costs associated with demolishing, removing or altering building components
  • Contractor overhead and profit

Note: Owners doing their own work must include the cost of materials and a reasonable cost for labor