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FEMA's 50% rule could make it more expensive for homeowners to rebuild after Hurricane Ian

 Tricia and Ron Murray dock their boats outside of their flooded North Port home days after Hurricane Ian ripped through the state.
Courtesy of Tricia Murray
Tricia and Ron Murray dock their boats outside of their flooded North Port home days after Hurricane Ian ripped through the state.

Hurricane-damaged properties in Florida counties are subject to a federal rule that could thwart recovery efforts for some homeowners.

The FEMA 50% rule, as part of the National Flood Insurance Program, mandates that if a home incurs substantial damage — determined when repair costs total or exceed 50% of the property's market value — it must be brought up to current building codes and floodplain regulations.

North Port homeowner Tricia Murray said this can be costly.

She became familiar with the federal rule after finding her home nearly counter-deep in canal water after Hurricane Ian.

"We had 3 feet of floodwater in our house still, five days later after the storm," Murray said. "So, we spent the first few days just going in by kayak and canoe just trying to save whatever we could out of the house."

A North Port home belonging to Tricia and Ron Murray inundated with canal water.
/ Courtesy of Tricia Murray
Courtesy of Tricia Murray
A North Port home belonging to Tricia and Ron Murray inundated with canal water.

Murray predicts that replacing the floors, cabinets, drywall and doors in her North Port house could rack up about $100,000 in repairs, or 51% in her home's market value. Federal guidelines governing substantial improvement only recognizes the market value as the physical structure, not including factors like geographic location in its appraisal.

If the written estimate of damage to Murray's home tips over the 50% mark, she will also have to raise her home to comply with updated flood elevation levels, which can be extremely costly.

"Basically you'd have to tear the house down and rebuild it up higher, either on stilts or by bringing in a lot of fill dirt," Murray said. "But that's the challenge now is that we have to stay under the 50%, or else that's going to trigger the 50% rule. If that were to happen, if we were to trigger that rule, we wouldn't have enough insurance money to rebuild."

Murray said she's not alone. Most of her street suffered flood damage that left their homes uninhabitable. Since then, Murray said most of her neighbors have been camping in their front lawns.

She said the primarily working class- and retirement-based community of North Port was already stretched thin before Hurricane Ian. Without assistance, Murray said most people couldn't afford a total rebuild of their home.

"I hope the city can work with us in every way that they can, legally, to help us try to repair homes and not have to rebuild them because — in my opinion — that would leave this neighborhood with abandoned homes," Murray said.

In particular, she has requested the city of North Port reconsider a rule that allows home repairs completed within a five-year time frame to be included in a substantial improvement calculation. In effect, she said this unfairly puts households closer to the 50% threshold requiring ground-up repairs.

"And here lies the biggest problem in it: A lot of homeowners who might have just renovated their home — maybe put a new roof on, renovated their bathrooms, their kitchen — when they live in a municipality which counts that work over the past five years and these building owners now have substantial damage, they might not get enough FEMA allowance to be able to rebuild their homes," property appraiser Patricia Staebler said. She also owns a Bradenton-based appraisal and consulting firm and regularly teaches FEMA appraisal policy across Florida.

Staebler said the fallout from Hurricane Ian could also create favorable conditions for investors, who are already eyeing coastal properties where homeowners will likely be priced out of rebuilding.

"In the single family market and in the condominium market," Staebler said, "I see the vultures already flying over Florida and just waiting for the perfect moment to buy properties."

Gabriella Paul covers the stories of people living paycheck to paycheck in the greater Tampa Bay region for WUSF. She's also a Report for America corps member. Here’s how you can share your story with her.
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Gabriella Paul
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