by Peter Roos
The 50% Rule is a regulation of the National Flood Insurance Program (NFIP) that limits “improvements” or ‘“restoration” to a structure in to buildings in FEMA Special Flood Hazard Areas to 50% of its market value: If a structure’s restoration is estimated to cost more than 50% of its market value, the entire structure must be made “flood compliant” meaning, elevated to or above the base flood elevation. The cost of the improvements includes structural costs, built-in appliances, flooring, interior finishes, and overhead and profit on the job. Even if you can do some of the work yourself, the market value of your labor is included in this analysis. The goal of the rule is to reduce the future flood exposure.
Each community administers its own permitting, with careful attention to ensure restoration costs do not exceed 50% of the structure’s market value. In St. Pete Beach the permitting department is requiring “complete FEMA packets” for any permit applications. The FEMA packet is supposed to identify, in detail, all restoration costs the structure will require.
The Pinellas County Tax Assessor’s website has a breakdown estimating land vs. structure value for every taxable unit. The FEMA packet application cover page contains two boxes. The applicants must check one. The first box says, “I am attaching a Florida State Certified Appraiser’s report of the property.”
The other says “I accept the Pinellas County Property Appraiser’s Office valuation of the property.”
Our public adjuster Nathan Shepherd of PolicyHolderAdvocacyGroup.com and our old friend Jim Beggins suggested we hire a Florida Certified Appraiser for a FEMA market value appraisal.
Ten days and $1,500 later we have a 68-page report that pegs our dwelling value at $550,000, more than twice the tax assessor’s figure, and high enough that we could spend $247,000 of our flood insurance proceeds, if needed, and stay under 50% of market value. Any balance remaining could be used for other improvements needed, wanted or desired by us or subsequent owners in the ensuing one to five years.
Irate residents have been protesting loudly about permitting delays that are “keeping us out of our homes.” City officials are
rightfully concerned that not following FEMA and NFIP guidelines could leave the entire community without the current 20% flood Insurance rate discount earned over the years, thanks to the city’s compliance. For our home alone, that discount is currently worth about $1,250 / year, more than $100 monthly.
Modern Movers, LLC has been successfully elevating existing homes in flood plains for years. A family-owned company with the largest hydraulic jack system made, they say they can successfully lift virtually any type of home and secure a new foundation above the flood plain. Their rough estimate of costs is currently $110-$160 per square foot of the structures to be elevated, including attached buildings like garages. Their website www.modernmovers.com lists the benefits of elevating as follows:
- Flood Protection
- Additional Living Space
- Structural Reinforcement
- Property Value Enhancement
- Cost-Effectiveness
- Mitigation of Environmental Risks
Considering these benefits, home lifting can be a practical and strategic solution for homeowners looking to protect their investment, expand their living space, and address structural concerns without resorting to complete reconstruction.
Jim Beggins lives in a Gulf-front townhome in Madeira Beach. His floors had never before gotten wet from Gulf waters, however, part of the sea wall protecting his ground floor came through the new, expensive, hurricane resistant, sliding doors and his entire townhome was in the Gulf of Mexico for a few hours on Sept. 26, just like our home in St. Pete Beach.
Jim has long been a real estate innovator. If you read our “Real Estate” column in last month’s edition, it was one Jim wrote five years ago, advising readers against investing on the ground level. He offers the same advice today. “It may have been over 100 years since the last time the water swamped Pass-a-Grille, but global warming is for real, and I’ve been surprised lately by the height of tides even without a storm in the Gulf. I predict it will be way sooner than 100 years before we see a repeat event.
If you can afford to move to higher ground, or to elevate your home, you will be far happier in the long run.” Towards that end, Jim and some of his builder friends have been working on an “Elevated Table” concept.
Rather than trying to fix their badly damaged homes in the flood plain, Jim envisions building people a steel platform, or table, elevated the few feet needed to get out of the flood plain, onto which a prefabricated, FEMA compliant home, strong enough for hurricanes and tornadoes, can be securely fastened at a later date.
Jim thinks there are hundreds of homeowners who would opt for this less expensive option, that will accomplish the goals of the National Flood Insurance program by reducing the number of structures likely to flood in the future.
They were still working on pricing and design options when we went to press for this issue but promised a complete presentation of the “Elevated Table” concept for our January edition. Incidentally, a FEMA packet is not required of designated historic structures which are allowed to rebuild in the flood plain.
This may account for a recent spike in requests for historical designation. Another article in this issue presents FEMA’s punishment for Fort Myers Beach, whose residents are losing their 25% flood insurance discount because FEMA says their town has not been properly enforcing the rules. That may explain some of what we are feeling about our own communities.