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I was thinking of increasing the headroom in my basement by raising the house and increasing the foundation height. The one thing that concerns me is the external pressure on the foundation. Could the existing foundation be topped with a two foot pressure treated knee wall, and then tie this to the floor joists with 45 degree bracing. This would create an insulatable two foot space at the top of the basement wall (just where you most need it) and give your basement a coffered cieling effect as well.