This paper introduces a multistep damage identification process that is both straightforward and useful for identifying damage in buildings with regular plan geometries. The algorithm proposed in this study combines the utilization of a multi-damage sensitivity feature and MATLAB programming, providing a comprehensive approach for the structural health monitoring (SHM) of different structures through vibration analysis. The system utilizes accelerometers attached to the structure to capture data, which is then subjected to a classical statistical subspace-based damage detection test. This test focuses on monitoring changes in the data by analyzing modal parameters and statistically comparing them to the structure’s baseline behavior. By detecting deviations from the expected behavior, the algorithm identifies potential damage in the structure. Additionally, the algorithm includes a step to localize damage at the story level, relying on the jerk energy of acceleration. To demonstrate its effectiveness, the algorithm was applied to a steel shear frame model in laboratory tests. The model utilized in this study comprised a total height of 900 mm and incorporated three lumped masses. The investigation encompassed a range of scenarios involving both single and multiple damages, and the algorithm proposed in this research demonstrated the successful detection of the induced damages. The results indicate that the proposed system is an effective solution for monitoring building structure condition and detecting damage.