Bill Proposal Coastal Flooding Home Rebuilding

Abstract:

There are many homes in Florida that are coastal and in a flood zone that are below Base Flood Elevation (BFE). A large percentage of these homes are 1950-60’s that were built slab on grade and reside well below the current BFE. As is the case with many homes like this across the state they have been the recipient of multiple flood claims over the years, and more as of recent. Global forecasting predicts this is only going to continue to be more frequent and worse as time goes on. Flood claims take tolls not only on the families that get flooded, lose belongings/property, work time and risk being displaced. It also costs a lot of state and municipal time/funds as well as private and public cost of flood claims.

There are really 4 options to mitigate this.

1) Total abandonment of the property to either sell in hopes that someone else may build a house at the current level or it just becomes a “browns field” and reclaimed by nature. Families would move from the neighborhoods they love.

2) First floor abandonment. Many of the homes in Florida are block construction and with modification the current living floor can be abandoned and turned into a “Florida Basement” that is unfinished space that water can come and go. Some are enclosed some are left open for a “Stilt House” look.

3) House Lifting. There are companies that can take a current house and lift it to a height to meet the flood level, not all houses can be lifted.

4) Scape and start over. Remove the existing old structure and build brand new to complete windspeed and flood codes.

COST TO GOVERNMENT = $0

Conducting first floor abandonment is very expensive and time consuming. You are basically doing a complete remodel and just leaving the outside walls and slab. Any savings of keeping the foundation are lost in labor costs. You are also limited to the same footprint as you had before, but you can build your new floor in anyway that you would like. It’s not always a clean job as you are making things fit where they may not as easily as a fresh build. But this is a viable and utilized option.

House lifting as well is very expensive. Costs vary widely depending on interior or exterior stairs, decks etc. Not 100% of all areas can support pilings for a lift. You are also still lifting a house from the 1950’s that is not built to hurricane code, it’s just lifted so it doesn’t flood. People also must keep their entire floorplan the same. There are risks of cracking etc in a lift.

Scrape and start over appears to be generally at or less expensive than first floor abandonment, but it’s faster as it’s a ground up build. The house it built to the proper height, to hurricane code, and to the floorplan that a resident wants. One of the largest hurdles of a new build is a complete and total tax reset. This makes people that are homesteaded at a very nice tax rate reset to a much higher rate, often $15-20K a year higher that creates a large disincentive to build a new house.

Proposal:

This would be for homesteaded properties only.

It would only apply to homes that are below BFE and raising their homes to at or above the current level. The idea is to provide current relief to those that want to remain in their areas that are prone to flooding.

This would not apply to rental/corporate owned etc, just homestead. Now I can see an argument for all, but in this case it’s just homesteaded.

The ask of the city/county/state is to allow help in the 3 major scenarios.

Criteria needed to qualify:

Homesteaded Property

Building from a below BFE to at or above current BFE standards.

In a total tear down and rebuild if they can build to their current Base Square Footage (BSF), livable “heated square footage” plus they can add 10% square footage (If allowed by code) with no change to their current tax rate. If they chose to build larger anything beyond the current BSF+10% would be taxed as if it was an addition however their county treats that today. There may be some houses with multiple tax rates baked in their overall tax bill. Their Save their homes tax would continue as before with no change until the house is sold or homestead exemption is removed. This would also exempt the new additional garage space (If they built a Florida basement style enclosed garage). Existing garage space would still be calculated as before, but new space would be completely exempt.

In raising and first floor abandonment the tax savings would be the same but cover new garage as listed above, no tax on new garage.

This would only apply for the homesteaded property while they remain homestead. Once they sell or transfer the property category it will be reset to the current tax rate as it does normally.

Cost to government = $0:

So the best part is there is no immediate cost to city/county/state on this. It encourages new and proper construction in these areas that are very prone to repeated coastal flooding. This construction helps create jobs in the area (Payroll taxes paid) and purchase of building supplies (Sales Tax Paid). Everything that becomes an economic engine that goes along with construction. This is an immediate effect for the city/county/state. Now they are not losing out on tax revenue, it’s just a deferred realization of that tax. If families do nothing, city/county/state still spend time and resources to help flood victims and have to spend more resources to mitigate flooding on infrastructure. The city/county/state also will have no change in tax revenue if people do nothing. If the improvements are made to the homes, all that is happening with property tax is it’s being deferred until that property changes hand or homestead is removed and it will revert to a much higher rate. In reality, the governments will gain much more tax revenue in time to encourage the rebuilding of homes, it’s just delayed some. All homes will transfer at some point. Cost of rebuilding is all on the homeowners with no dollar outlay from any government agency.

This is one of the few things that is cost neutral for government to do to help improve the lives and people who want to remain in their area and remove the costly risks of flood damage.

Chris Marone

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