and, if not, the future land use and damage poten- 

 tial of new structures. 



(2) Value per physical unit. This step involves es- 

 timating future unit value. Increases in the value of 

 property in the floodplain may result from the ex- 

 pansion of existing facilities or the construction of 

 new units. The following guidance applying to con- 

 tent value is derived from an empirical study of 

 flood-prone property: 



(i) Existing development Use the OBERS region- 

 al growth rate for per capita income as the basis 

 for increasing the real value of residential contents 

 in the future. 



(ii) Future development Project the value of con- 

 tents within new residential structures from the year 

 each unit is added. 



(iii) Translation to future flood damages. Use the 

 projected rate of increase in the value of flood-sus- 

 ceptible household contents as the basis for in- 

 creasing the future unit flood damage to household 

 contents. 



(iv) Limit The value of contents should not 

 exceed 75 percent of the structural value of the 

 residence unless an empirical study proves that a 

 special case exists (e.g., trailer parks), nor should 

 the increase in value of household contents be pro- 

 jected beyond project year 50. 



(v) Commercial and industrial property. The pro- 

 cedure described for residential contents does not 

 apply to commercial and industrial categories. 



(3) Damage susceptibility. The third step in meas- 

 uring future flood damages is to determine the 

 damage susceptibility of units. Once the number of 

 physical units and the value associated with each 

 unit are known, examine possible future changes, if 

 any, in damage susceptibility relationships as a 

 function of the total value of each physical unit and 

 the stream's flood characteristics, such as velocity, 

 depth, duration, volume, debris load, and salinity. 

 Some of the determinants of damage susceptibility 

 are type of activity, vertical development, location 

 within the floodplain, nature of flood proofing, con- 

 struction material used, and individual response. 



(d) Projection of income losses. Income losses 

 may be projected to increase on the basis of pro- 

 jected land use. Increases in physical losses should 

 not be used to project income losses. 



(e) Projection of emergency costs. Emergency 

 costs encompass a wide vanety of programs. 

 Some, such as emergency shelter and food, are 

 primarily a function of occupancy of the floodplain 

 but not of the value of development in the flood- 

 plain. Emergency costs should not be be projected 

 to increase as a direct function of physical losses. 



2.4.12 Evaluation procedure: Step 8— 

 Determine other costs of using the 

 floodplain. 



The impact of flooding on existing and potential 

 future occupants Is not limited to flood losses. 

 Some of the impacts are intangible but others can 

 be translated into NED losses. These latter include 

 the following: 



(a) Flo'od proofing costs. High flood hazards lead 

 to high flood costs. Therefore, compute the flood 

 proofing costs of different activity-types and differ- 

 ent flood hazard zones. 



(b) National flood insurance costs. A national 

 cost of the flood insurance program is its adminis- 

 tration. The cost of servicing flood insurance poli- 

 cies in effect at the time of the study is the average 

 cost per policy, including agent commission, and 

 the costs of servicing and claims adjusting. FIA 

 should be contacted to obtain these costs. 



(c) Modified use. In some cases, the flood hazard 

 has caused structures to be used less efficiently 

 than they would be with a project. For example, the 

 first floor of garden apartments may not be rented 

 because of a flood hazard, or property may be con- 

 figured in a different way with the plan compared to 

 without a plan. 



2.4.13 Evaluation procedure: Step 9— Collect 

 land market value and related data. 



If land use is different with and without the pro- 

 ject, compute the difference in income for the land. 

 This is generally accomplished by using land 

 market value data. Provide supporting data in the 

 situations described in paragraphs (a) through (d) of 

 this section. 



(a) Land use is different with project. If land use 

 is different with compared to without the project, 

 collect the following data as appropriate to com- 

 plete step 10. 



(1) Comparable value. If the plan does not result 

 in a major addition to the supply of land in the area, 

 the value with protection is the market value of 

 comparable flood-free land. If the plan results in a 

 major addition to the supply of land, the effect on 

 the price of land should be taken into account in 

 estimating the value of floodplain lands with protec- 

 tion. The flood-free land should be comparable in 

 terms of physical and infrastructural characteristics. 



(2) Existing value. Use the value of nearby flood- 

 plain sites or, as appropriate, the current value of 

 the floodplain. In either case, report the current 

 and, if available, past market values of the flood- 

 plain. Use actual market values, not capitalized 



37 



