As area residents we enjoy the many amazing benefits of coastal living. The beaches, the abundant natural beauty, the Gulf, the blue sky and the sun are perhaps why most of us moved here. But, our low land elevation does create the possibility of flooding in major storm events. To protect your home and investment from water damage it is very important to carry flood Insurance even if you are not in a flood zone.

Flood Insurance has become a very hot button issue in recent years especially after Hurricane Katrina and Super Storm Sandy drained the Federal Emergency Management Agency (FEMA) of disaster relief funds. Flood Insurance premiums are rising dramatically in flood hazard areas and will keep on increasing for years to come. However FEMA flood insurance is by far the safest and most effective way to protect your home whether or not you are in a flood zone.

To participate in the FEMA flood insurance program and make affordable flood insurance available, counties and communities must prove they adhere to FEMA regulations. A very significant FEMA regulation is called the “50% RULE”.

So just what is the 50% Rule?

Sarasota County and local cities participate in the National Flood Insurance Program (NFIP) making affordable flood insurance available for structures within their jurisdiction through FEMA. The county or city adopts and enforces floodplain management ordinances to reduce future flood damage. The FEMA 50% rule is a minimum requirement for participation in the NFIP. It limits the cost of improvements, that is, additions, alterations and or repairs, to non-conforming structures to less than 50% of the ” market value” of the structure prior to the start of the work.

FEMA has identified areas that are at higher risk for periodic flooding and determine the minimum lowest floor elevation for structures in those areas. On the flood insurance rate maps, (FIRM) developed in 1975, high-risk flood zones are denoted as zones A, AE, A 1 through A 30, and VE. This designation is usually followed by the minimum lowest finished floor elevation height requirement for example AE -12. Structures in these zones that have the lowest finish floor below the required elevation are called “non-conforming”. Even though there are exceptions, most structures that were built before 1975 are considered non-conforming.

“Market Value” is always based on the condition of the structure before the start of the Improvement or before damage has occurred. Only the value of the structure is pertinent, the value of site improvements such as patios, pools, accessory structures and landscaping are not included. The market value can be either determined by the adjusted property appraisers assessed Improvement value or through an appraisal prepared by a qualified professional appraiser in accordance with FEMA guidelines.

So, for non conforming properties, FEMA will take the county property appraiser’s improved value and then basically add 20% to that number. Whatever that total comes out to be, the cost of the new proposed improvements must be under 50% of that adjusted value. Otherwise the home must be brought up to the most current flood elevation and building standards.

An example might be helpful here; Let’s say you own a house on Siesta Key that was built in the 1960s. Let’s assume the County property appraiser values the property, again the structure itself, at $80,000. By simply adding 20% to the property value ($16,000) you now have a FEMA market value of $96,000. The FEMA 50% Rule says that you can only make improvements to this non-conforming structure up to $48,000 in total. You are not allowed to phase in improvements over time to keep pumping up your market value FEMA considers this a “substantial improvement” which is not allowed in a flood prone area. FEMA has very strict regulations including prohibition of living in the property if the cost of improvements exceed 50%. They also have worksheets, contractor/owner-occupant affidavits and cost itemization guidelines. FEMA says that improvements or repairs the cost of which exceeds 50% of the market value are classified as substantial Improvement. A nonconforming structure that is substantially improved is required to conform with the requirements for new construction including to the required minimum elevation. New elevation requirements on the Keys can be between 18-19.3 ft.

The only alternative that FEMA allows for the 50% Rule is for the homeowner of a non-conforming property is to hire a qualified professional appraiser. The appraiser will conduct his or her own FEMA approved appraisal process. Instead of just adding 20% to the county property appraiser figure, the appraiser will conduct an onsite visit and will add or subtract values for improvements that may already exist in the home that did not require permits. These improvements generally include flooring, kitchen and bath remodeling, cabinets, appliances, etc. These existing improvements can possibly add thousands of dollars to the market value which of course creates a higher threshold for the magic 50% Rule.This appraisal is still subject to review by the county or city building authority and other FEMA guidelines.This type of appraisal can cost around $1000

So in summary, the 50% Rule affects ten’s of thousands of older homes in our low lying coastal communities. Furthermore flood maps and minimum floor elevations in flood zones change over time. The most current flood maps for most of our area were finalized in November of 2016. These new flood maps added around 40,000 homes to high hazard flood areas. Many of these were built after 1975. If you are considering improving your older home please check with your local county property appraiser’s office for your official flood zone designation. Or you can call me for or the county for a reference for a qualified appraiser.


Dan Heschmeyer