The 50% Rule: Repair vs. Replacement

When evaluating whether a damaged facility is eligible for replacement, FEMA compares the eligible repair cost with the eligible replacement cost and evaluates the feasibility of repairing the facility.

A facility is considered repairable when:

The cost to repair the disaster-related damage does not exceed 50% of the cost to replace the facility based on its pre-disaster design, capacity, and function; and
It is feasible to repair the facility so that it can perform the pre-disaster function as well as it did prior to the incident.

Repair Costs	Replacement Costs
The repair costs (numerator) is the cost of repairing disaster-related damage only and includes costs related to compliance with codes and standards that apply to the repair of the damaged elements only. This includes federally required codes and standards.	The replacement costs (denominator) is the cost of replacing the facility on the basis of its pre-disaster design (size and capacity) and function in accordance with applicable codes or standards.