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              Benefit-Cost Analysis
                          Benefit-Cost Analysis

                      How to Complete a Streamlined BCA
                  
                                        
                    
          
                    
                            
                                        
                    
          
                    
                            
                                        
                    
          
                    
                            
                                        
                    
          
                    
                            
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A Benefit-Cost Analysis (BCA) should be performed to demonstrate that a proposed mitigation project will be a wise expenditure of public funds.



**For all mitigation projects, a cost-effectiveness determination is required as a basic eligibility requirement.** In many cases, this means performing a full BCA in the BCA Toolkit.



However, if a project meets the following conditions, full analysis may not be required to be performed in the BCA Toolkit.



The project type is eligible for pre-calculated benefitsThe building to be mitigated qualifies as "substantially damaged" as defined by the National Flood Insurance ProgramView All Pre-Calculated Benefits & How to Use Them



Learn About "Substantially Damaged" Buildings



If neither of these two conditions are applicable for your project, you will need to perform a full BCA in the BCA Toolkit.



Pre-Calculated Benefits Resources



The term “pre-calculated benefit” refers to a benefit value that has been calculated based on research and statistical analysis or computer modeling of mitigation projects.



Each pre-calculated benefit that FEMA has determined is listed below. However, note that not every mitigation project type has a corresponding pre-calculated benefit. If a pre-calculated benefit is not listed for a specific project type, then it is likely that a full BCA will need to be performed.



alert - info**BCA Toolkit users are strongly encouraged to review and understand the conditions for which a pre-calculated benefit may be used.**



Be aware that using a pre-calculated benefit value does not change the eligibility requirement for developing a detailed cost estimate. A project’s cost estimate must be based on industry standards, vendor or construction estimates, or other reliable and defensible sources.



Available Pre-Calculated Benefits


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Hospital Generator Pre-calculated Benefit-Cost Analysis
FEMA Hazard Mitigation Assistance (HMA) funded mitigation projects must be cost-effective, which is typically demonstrated through a Benefit-Cost Analysis (BCA) or a pre-calculated benefit. This report details the methodology used to establish the pre-calculated benefit values for hospital generator projects. It is provided for informational purposes and does not contain any information needed to submit a grant application.
Jun 3, 2022
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Acquisition Benefit-Cost Analysis (BCA) Efficiencies for HMA Programs Methodology Report

Jun 3, 2022
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Residential Hurricane Wind Retrofits

Sep 21, 2023
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As noted in the *Hazard Mitigation Assistance Program and Policy Guide*, published March 12, 2023, this web page provides the current pre-calculated benefits values. This page is updated more frequently than the *Program and Policy Guide*. Therefore, if the number in the table below differs from the value provided in the *HMA Program and Policy Guide*, use the value in the table below. If you have a question about which value to use, ask the BCA Helpline







Mitigation Project type**Pre-Calculated Benefit Value****Additional Information and Resources*****Acquisitions***Acquisitions in the Special Flood Hazard Area (SFHA)$360,000 per structureFor guidance and documentation requirements, refer to Sections B.1.2.4.1.1, B.1.2.4.1.3, and B.1.2.4.1.4 of the HMA Program and Policy Guide, pages 304-305 and 307-308Acquisitions of Repetitive Loss and Severe Repetitive Loss properties located outside the SFHA$360,000 per structureFor guidance and documentation requirements, refer to Sections B.1.2.4.1.2, B.1.2.4.1.3, and B.1.2.4.1.4 of the HMA Program and Policy Guide, pages 305-308To read about how the pre-calculated benefits were determined, see the Acquisition BCA Efficiencies for HMA Programs Methodology Report1***Elevations and Mitigation Reconstruction***Elevations in the SFHA$228,000 per structureFor guidance and documentation requirements, refer to Section B.3.2.4.1 of the HMA Program and Policy Guide, page 359Mitigation reconstruction in the SFHA$228,000 per structureFor guidance and documentation requirements, refer to Section B.2.2.3 of the HMA Program and Policy Guide, page 341***Hurricane Wind Retrofits for Residences***Mitigation package: Intermediate ProtectionFor the definition of Intermediate Mitigation Package, refer to FEMA Publication 804, starting on page 46No roof replacement$15,784 per structureFor guidance and documentation requirements, refer to Section B.10.2.4.1 of the HMA Program and Policy Guide, pages 488-490To determine if the residential structure is located in an area with wind speeds greater than or equal to 120 mph:Use the ASCE 7 Hazard Tool: https://asce7hazardtool.online/Enter Location and select the **Search** buttonUnder Risk Category, select “II” Under Load Types, select “Wind”Select the **View Results** buttonObtain the wind speed below the Wind headingSelect the **Full Report** button to obtain the report as a PDFProvide the PDF as BCA documentationWith roof replacement$29,904 per structureSee No Roof Replacement aboveMitigation package: Advanced ProtectionFor the definition of Advanced Mitigation Package, refer to FEMA Publication 804, starting on page 63No roof replacement$48,302 per structureSee Mitigation Package: Intermediate, No Roof Replacement aboveWith roof replacement$62,422 per structureSee Mitigation Package: Intermediate, No Roof Replacement above***Hurricane Wind Retrofits for Non-Residential Structures***Non-residential wind retrofitsThe total project cost is less than 10% of the building’s replacement cost valueFor guidance and documentation requirements, refer to Section B.10.2.4.2 of the HMA Program and Policy Guide, pages 490-491To determine if the non-residential structure is in a wind-borne debris region, use the ASCE 7 Hazard Tool: https://asce7hazardtool.online/Enter Location and select the **Search** buttonUnder Risk Category, select “II”Under Load Types, select “Wind”Select the **View Results** buttonSelect the **Details** buttonToward the bottom of the Wind Details popup window, review that the shaded text includes the phrase “Glazed openings shall be protected against wind-borne debris as specified in Section 26.12.3.” If the wind-borne debris  text is present, select the **Full Report** button to obtain the report as a PDFProvide the PDF as BCA documentationNon-residential wind retrofits in Puerto Rico and the U.S. Virgin IslandsThe total project cost is less than 25% of the building’s replacement cost valueFor guidance and documentation requirements, refer to Sections B.10.2.4.2 and B.10.2.4.2.1 of the HMA Program and Policy Guide, pages 490-491***Tornado Safe Rooms***Residential tornado safe roomsVaries by stateFor guidance and application instructions, refer to the HMA Program and Policy Guide, pages 453-454The state-specific pre-calculated values on pages 453-454 are the current values***Post-Wildfire***Soil stabilization: Reseeding ground cover with quick growing or native species$35,428 per acreSoil stabilization: Mulching with straw or chipped wood$24,408 per acreSoil stabilization: Placing logs and other erosion barriers to catch sediment on hill slopes$35,428 per acreSoil stabilization: Planting grass to prevent the spread of noxious weeds$94,818 per acreFlood diversion (including flash flooding prevention and sediment reduction measures)$5,250 per acreFor guidance and documentation requirements, refer to Section B.9.2.5.1 of the HMA Program and Policy Guide on page 473Reforestation$143,019 per acreFor guidance and documentation requirements, refer to Section B.9.2.5.1 of the HMA Program and Policy Guide on page 473***Hospital Generators***Hospital generators in urban area$6.95 per hospital building gross square footageFor guidance and documentation requirements, refer to Section B.11.2.6.3 of the HMA Program and Policy Guide, page 509To read about how the pre-calculated benefits were determined, see the Hospital Generator Pre-calculated Benefit-Cost Analysis Methodology ReportHospital generators in rural area$12.62 per hospital building gross square footageSee resources for Hospital generators in urban area aboveThis report documents the methodology for how a pre-calculated value is determined, and the most recent value is provided in the Pre-Calculated Benefit Value column at the left.Practical Application of Pre-Calculated Benefits



When performing a BCA using pre-calculated benefits, use the available pre-calculated benefits value provided in the table above applicable memorandum as the benefits value for the property being mitigated. If the project cost for that property is less than or equal to the pre-calculated benefits value, then mitigating that property is considered cost-effective.



Note that even though a full BCA is not required, a benefit-cost ratio (BCR) must still be calculated since it is a required data field in FEMA’s electronic grant application systems such as FEMA GO. Either the BCR can be manually calculated or the BCA Toolkit can be used.



A manual calculation can be performed by dividing the pre-calculated benefits value by the estimated cost for mitigating that specific structure.



**EXAMPLE**The pre-calculated benefits value for an acquisition project is $360,000 per structure. If the estimated total project cost is $250,000 to acquire and demolish a house, manually calculate the BCR by $360,000 / $250,000 = 1.44. Enter the BCR into the project subapplication documentation where requested.



Be sure to follow the requirements listed in the *Hazard Mitigation Assistance Program and Policy Guide*for averaging the total project cost for all structures mitigated by the project.



**EXAMPLES**For acquisitions or elevations in a Special Flood Hazard Area, if the costs to acquire and demolish three homes are $340,000, $300,000, and $300,000, calculate the average cost per structure as ($340,000 + $300,000 + $300,000) / 3 = $313,333).



Another example of following the requirements in a pre-calculated benefits policy involves using a location factor to boost the pre-calculated benefits value for project locations that have higher-than-average construction costs.



**EXAMPLE**RS Means or Marshall & Swift construction data may show that a location factor of 10% is applicable. In this case, the pre-calculated benefits value for an acquisition project can be increased by 10% by the following calculation: $360,000 * 1.10 = $396,000. Then, the pre-calculated benefits policy should be followed as explained above, but with using this higher dollar value. Additionally, the source of the location factor must be provided as supporting documentation.



Structures for which pre-calculated benefits apply can be entered into the BCA Toolkit. If the BCA Toolkit detects that a project cost value qualifies for using a pre-calculated benefit policy, a sidebar will appear in the Cost Estimation Info section. If the user selects “Yes” to consider the structure under the pre-calculated benefits policy, the analysis for that structure will end and the benefits and costs will be displayed in the Project Summary screen just as they would be displayed if a full BCA was performed.



The advantages of entering data this way for structures and projects for which pre-calculated benefits apply are that (a) the latitude and longitude values will be automatically generated for each structure, (b) the BCA Toolkit can aggregate the BCR for multiple structures in the project according to the pre-calculated benefits policy, and (c) users will have an exportable BCA file to attach to their project subapplication.



Warnings about Using Pre-Calculated Benefits



Take care to understand the pre-requisites for using a pre-calculated benefits methodology. For example, the *Acquisitions and Elevations in the Special Flood Hazard Area (SFHA)* policy applies *only* to buildings that are located within an SFHA. If the project involves mitigating buildings both inside and outside an SFHA, the pre-calculated benefits methodology can be used only for the buildings within the SFHA. Additionally, the policy prohibits aggregating buildings inside SFHAs with those outside SFHAs. Therefore, since it is often difficult to show that mitigating buildings outside of an SFHA are cost-effective due to a lack of flood data, it may be necessary to perform a full BCA in the BCA Toolkit for some or all of the buildings included in the project.



The cost estimate used as the basis for pre-calculated benefits must consider the entire project cost for the project type. For example, all required costs for an acquisition project, such as legal fees, structure demolition, and site restoration, must be included in the cost estimate and not just the cost to acquire the structure. Similarly, the cost estimate must not include ineligible project costs.



When using the hurricane wind pre-calculated benefits, make sure to verify in which county and/or wind zone the project is located, especially for cases where the structures are located near the boundary between two counties or in a county that is partially located in the appropriate wind zone.



Substantially Damaged Building



For communities participating in the National Flood Insurance Program, “substantial damage” is defined by the local floodplain management ordinance as a structure in a Special Flood Hazard Area for which the total cost of repairs is at least 50% of the structure’s market value before the damage event occurred, regardless of the cause of damage (the local ordinance may have a lower percentage). For the official FEMA BCA guidance related to substantially damaged buildings, refer to Section B.1.2.4.2 on page 308 of the HMA Program and Policy Guide.



If the following conditions are met for a substantially damaged structure, you do not have to perform a full BCA using the BCA Toolkit:



The mitigation activity is structure acquisition and demolition.The building is located within a riverine (not coastal) floodplain as shown on a preliminary or effective Flood Insurance Rate Map (FIRM). *Note: The building may be located in the floodplain based on its elevation instead of being located in the floodplain on a FIRM. In this case, the elevation documentation should be included in the project subapplication.*The Local Floodplain Administrator has supplied documentation that the building is substantially damaged (from any origin).The following documentation must be submitted with the project subapplication:



The FIRM or other documentation showing that the building is located in a riverine floodplain.The substantial damage determination letter.The above conditions have been met in the FEMA GO Cost-Effectiveness screen, users should enter a Total Project Benefits value that is equal to the Total Project Costs value. FEMA GO will automatically calculate a BCR of 1.0 on the screen and will allow users to navigate past this screen without an error.
Last updated November 1, 2023

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