Posted on December 12, 2024
ST. PETE BEACH, Fla. – A Florida lawmaker from St. Pete Beach says she plans to propose a change to FEMA’s ‘50% Rule’ that could make it easier for homeowners to make repairs after a storm without triggering costly requirements.
The 50% Rule is a regulation of the National Flood Insurance Program (NFIP) and states that repairs made to a home in a designated flood zone cannot exceed 50% of the home’s market value unless the entire structure is brought into full compliance with current flood regulations.
For many residents, that would mean having to elevate the structure by several feet, repair work that could take years and can quickly drive up renovation costs by hundreds of thousands of dollars.
Compounding the challenge of 50% Rule compliance for homeowners in some communities is a lesser-known part of the rule that allows for a “lookback period” that will count any repair work made prior to the storm and during a given timeframe toward the homeowner’s 50% threshold. This can significantly reduce the amount a homeowner can spend on repairs without triggering the 50% Rule.
For example, a homeowner with a damaged property valued at $200,000 would be able to make up to $100,000 in repairs before triggering the 50% Rule. However, if their community has a lookback period, any repairs made during that time will count against their repair limit. If, say, the same homeowner upgraded to hurricane windows within that period and spent $25,000, they’d only be able to make up to $75,000 in renovations if they hope to avoid being required to bring their entire property into modern flood code compliance.
The rule applies regardless of who made the renovations and the period does not reset when a property is sold.
Lookback periods vary from community to community across the state. Many don’t have one at all, but others impose lookback rules ranging from one to five years in order to receive a reduced rate on national flood insurance.
St. Pete Beach has one of the longest lookback periods in the state, at five years.
According to a recent interview with the St. Pete Catalyst, State Rep. Linda Chaney is hoping to do away with lookback periods in order to make it easier for homeowners to stay within their 50% repair limit. She feels the rule ends up penalizing homeowners who’ve invested in improving their homes.
Chaney estimates doing away with the rule may raise costs slightly for flood insurance policyholders, but that it wouldn’t break the bank. According to a study she commissioned from Florida’s Office of Insurance Regulation, St. Pete Beach homeowners would be looking at about a 5% increase in their flood insurance rates, an average annual cost of about $36.
Chaney plans to introduce her rule change in the 2025 legislative session.
St. Pete Beach commissioners are also considering changes to their five-year lookback period.
