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.  

Key Issues
--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 
important.
--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.

Costs
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 
(http://www.fema.gov/nfip/manual.shtm).

Risk
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. 
[End of graphic description]

Siting
Note that over a long period, poor siting decisions are rarely overcome by 
building design.

Design
--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.

[Graphic Description] Table that shows the effects of selected design items on 
costs.. 
[End of graphic description]

[End of Fact Sheet No. 6]