Building Valuation

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Building Value, Changes to Scope, and Phasing

This document is intended to clarify the process for verifying building permit alteration value for fees and submittal type, changes to permit scope, and phasing of building permits.

Building Valuation Background. As outlined in Tacoma Municipal Code (TMC) 2.09.050 Fee Code, fees for Commercial and Residential Alteration Building permits (BLDCA/BLDRA) shall be based upon the valuation of the work. Valuation is defined as:

The determination of value or valuation under any of the provisions of this Code shall be made by the Building Official. The valuation to be used in computing the permit and plan review fees shall be the total value of all construction work for which the permit is issued. Finish work, painting, roofing, electrical, plumbing, heating, air conditioning, elevators, fire extinguishing systems, site work, and any other permanent work or permanent equipment shall be considered part of the valuation.

Alteration permits consist of additions, reconstructed portions, existing areas being altered, and miscellaneous non-occupied structures like walls, antennas, tanks, and similar construction. When an alteration has a mixture of additions, reconstructions, and remodels, then the submittal documentation must clearly outline each separate aspect of the project. This is necessary to properly determine valuation of the project.  Additions and portions being reconstructed shall be based upon floor area whenever possible and shall be calculated from the most recently City adopted “Building Valuation Data” (“BVD”) published by the International Code Council and City of Tacoma Fee Code.

• Where fees are based on building floor area, such floor area shall include all floor area within the exterior surfaces of the exterior walls, basement areas, areas of exterior exit stairways and balconies, and those parts of other exterior balconies and walkways under roof overhangs.
• Where it is not possible to base the permit fee on floor area, the permit shall be based on valuation of work directly. The building permit fee for alterations, repairs, towers, retaining walls tanks (other than domestic fuel oil tanks), and similar construction shall be based on valuation.
• Where there is a combination of addition/reconstruction and existing alteration/remodel, then the area with the addition/reconstruction shall be determined by floor area and the alteration/remodel shall be determined by value of the work. These shall be combined to provide the total value of the project for the alteration permit.
• In flood hazard areas, the determination of value as it applies to new and alteration construction has different thresholds for mitigation. Additional review is necessary when a structure is in the flood hazard area to determine substantial improvement/repair and substantial alteration/construction per TMC 2.02.185 Amendment to International Building Code Section 1612.3 and TMC 2.02.585 City Amendment to International Residential Code.
• Off-site Improvement condition thresholds are addressed separately within TMC Title 2.

To assist in verifying alteration values, an Alteration Valuation Table is provided. The Table establishes a guide for determining the value of the project based on a description of the scope of work and work area.

Alteration Valuation Table[1]^{, [2], [3]}

[1] The Building Official and staff reserve the right to determine the valuation based on their interpretation of the scope of work upon permit submittal.

[2] Projects located in the floodplains may have additional requirements and thresholds to what constitutes being part of the project valuation.

[3] Different thresholds exist in Tacoma Municipal Code Title 2 for determining off-site improvements.

[4] Calculated valuation for new construction area shall be per PDS and the City Fee Code.

[5] The extent of alteration includes one or more of the elements in the definition. The floor area affected shall be calculated on the entire area of the rooms where alterations are proposed. If a project has areas for which it is reasonable to distinguish as being of different categories, it is appropriate to calculate the areas separately to develop the project value.

How to use the Table.

This Table is used to verify the proper information provided by applicants.  It starts with review the proposal for alteration to an existing building and determine where the project falls on the Alteration Valuation Table. Use the percentage corresponding to the scope on the Table. Multiply the percentage by the total value of new per the adopted BVD values. Verify the value it relatively accurate to the proposed work scope and apply the permit fees per City Fee Code.

Example 1:

Given: 2,000 sf single-family Type VB construction home interior remodel with drywall gutting, some partition wall alteration, minimal structural modifications, re-piping and considered Medium Alteration of existing house with 100 sq ft addition.  This results in 40% level remodel and 100% level of the addition area. Multiply 40% by BVD values for single family home remodel area ([2,000 x $166.08] x 0.40 = $132,864) and 100% of the addition (100 sf x 166.08 = $16,608) with a total combined valuation of $149,472 by BVD values single family home.  In this case, it is residential single-family home with an estimated value of $149,472 for the total project and should be comparable to the value for the work performed with materials and labor.

Example 2: 

Given: 2,000 sf single-family home with removal of interior walls, ½ or less the exterior walls, demolition of all non-structural portions leaving a structural shell; installation of new or substantial replacement of electrical, mechanical systems in conjunction with significant changes in room configuration; significant structural upgrading to meet seismic requirements, or other substantial structural renovation, extensive structural repair. Based on the scope of work, this project would meet the 80% remodel valuation criteria. The resulting valuation will be 80% x (2,000 sf x 166.08) = $265,728. This calculated valuation should be comparable to the value for the work performed with materials and labor for this residential alteration permit (BLDRA).

Example 3: 

Given: 2,000 SF single-family home with complete removal of interior and exterior walls leaving only the foundation intact. Due to the extent of this scope, this project would be considered a new construction and rebuild of the home and 100% of the ICC BVD table fee will be used to reconstruct the home at a valuation of 100% x (2,000 sf x $166.08) = $332,160.

At this level of work, the type of permit required will be a BLDRN for new construction.

 Example 4:

Given: Commercial 2,000 sf tenant improvement alteration inside a 10,000 sf Type IIIB office building, that is not the initial tenant improvement. Work involves complete removal and replacement of all interior partitions and walls to realign office and conference rooms. But since no electrical or mechanical work is being proposed, this project would fall under the 60% remodel valuation. If the project did include electrical or mechanical work, it would raise the valuation to 80%. Therefore, project valuation will be 60% x [2,000 SF x $206.57 (Type IIIB Group B)] = $247,884. This amount should be comparable to the value for the work performed with materials and labor.

Commercial Projects

The valuation for tenant improvements, alterations and repairs to existing buildings shall be based on the scope of work and the valuation provided by the applicant on the application form with verification by permit staff. Initial tenant improvement, shell permits, and phased permitting fees will be per PDS Fee Schedule Table 8-3.

Per Planning and Development Services Fee schedule

The valuation to be used in computing the permit and plan review fees shall be the total value of all construction work for which the permit is issued. Finish work, painting, roofing, electrical, plumbing, heating, air conditioning, elevators, fire extinguishing systems, site work, and any other permanent work or permanent equipment shall be considered part of the valuation.

For Both Residential and Commercial Projects

PDS shall determine the value of new construction which cannot be computed by the gross floor area, such as towers, retaining walls, foundations, repair of a beam or addition of a stair. This value shall be the full estimated cost of all labor and materials independent of any contractual payment obligations between owner and the general contractor and may be based on the information submitted by the applicant.

1. NEW or ALTERATION CONSTRUCTION PERMIT. To clarify the methods for determining if the permit should be submitted as new construction or alteration. New or reconstruction of the entire building is considered new construction. In addition, projects exceeding the threshold of “Full Alteration” as defined in the Alteration Valuation Table of this document are considered new construction. This is the removal and replacement exceeding 80% based on value or scope.
2. MODIFICATIONS TO SUBMITTAL SCOPE. Alterations for Commercial and Residential permits are often complex and have varying scopes that change during design and construction due to discovery of unknown project factors.

Prior to Issuance. If significant changes occur during submittal and prior to issuance, the applicant should contact City staff to determine the best process for addressing. Most revisions can be processed through the original submittal with clear changes outlined in the scope and review documents. These changes may also address fees that can be corrected prior to issuance of the permit.

After Issuance.  Projects that change from the original scope after issuance must submit a Field Revision that outlines the change in scope and value. These changes will be reflected on the original permit with revised fees for the proposed change in work and additional fees for added staff review time. If additional permits like Site Development are necessary for this change, then additional review and development conditions for the permit may be necessary with any applicable permit fees applied.

If it is determined the revised scope exceeds the Full Alteration level to become new construction, then staff will determine if resubmittal as new construction permits is necessary.

Increase in Scope. A change from alteration to new construction permits is not required if all conditions and associated permits are provided with the Field Revision and the original alteration permit is modified to reflect the updated change in scope.

Reduction in Scope. If a project is being revised to reduce the scope, then a Field Revision may address that as well. Refunds based on the change in scope will be processed per PDS refund policy.  The refund results in less than full cost recovery due to review fees and processing time that cannot be refunded. If a change from complete project to a phased project, then additional steps and fees must be addressed per the Phasing of Permits section.

Modification After Passing Final Inspection. If a modification is proposed after passing final inspections, a new permit is required to address the changes proposed.

3. PHASING of PERMITS. The phasing of permits is typically applied to large commercial projects that have on-going upper floor design finalization when the foundation is complete and for separating out the shell structure and separate tenant improvement. The use of this process on residential structures covered in the International Residential Code is limited due to the projects being minor in size and requiring occupancy for living. In addition, work that does not continue through the phasing sequence to occupancy often results in violation cases due to incomplete work and potentially hazardous nature of the partial construction.

Initial tenant improvement, shell permits, and phased permitting fees will be per PDS Fee Schedule Table 8-3.

Phasing of permits to delay construction into stages of occupied and unoccupied spaces is not recommended for single-family, duplex, and townhouse construction projects.

Authorization of Phasing. If a new building project is proposed to be built in phases and the Building Official determines that separate development permits may be issued for approved portions of the project, the development fee for the entire permit shall be based on the value of work according to PDS Fee Schedule.

For the purposes of determining fees, the building permit can be separated into the following phases:

1. Foundation/Structural Shell permit: Where the foundation and structural elements are being authorized by the permit and there are no building walls or spaces above the foundation approved for occupancy.
2. Shell Building: Where tenant spaces are not included in the permit and the spaces do not receive certificate of occupancy. A certificate of completion is issued for the completed shell space.
3. Initial tenant improvement: Non-structural initial tenant alterations, which were not included in the building permit for the new building Work authorized at this rate will be limited to improvements to previously unoccupied space.

Fees for all commercial tenant alterations beyond the first permit will be computed based on valuation.

Applicable Regulations and References

• Tacoma Municipal Code Section: 09.050 – Fee Code
• Tacoma Municipal Code Section: 02 – Building Code