If you are NOT in an X zone, you are likly in an AE zone and then the rates are a function of the BFE Base Flood Elevation and the lowest elevation of the dwelling. 

However, if they wanted to justify it, I'm sure the justification is that renters cause more problems than owners; renters tend to live then shorter periods of time and there are expenses when someone moves in/out such as extra trash pick-ups, programming them into an entry system, cleaning costs as the move in/out can be messy around the building, light damage to the building, scheduling of the freight elevator, cost of providing additional notices as now the tenant and owner need to receive copies, etc.

The big advantage to the design is a relatively small foot print (3740sq ft) and a fit in anywhere elevation (appearance). 

No place is perfect but I go to Arizona too often in the summer and I cannot handle the heat in the low elevation cities in the summer.  

Work on your elevator pitch and start dialing!

It sharpened my elevator talk about buying houses.

Sounds like your team is well-established at this point and the value you find on BP will elevate you to greater success! 

Typically it is the local building and zoning with a similar rule, repairs of more than 50% are not prohibited, But if the rebuild/renovation cost is more than 50% of the property value then the property must be brought to Current building codes, which may include the floor elevation being raised to current building requirements, which is usually not feasible, cost wise.

Which elevator pitch would make you want to join the business as an investor?! 

Adding crisp white towels, a decorative soap dish and small potted plant on a window sill is a expensive way to elevate a bathroom.