Jeff Brandes: The flood rule that’s pricing Floridians out of their homes

Every system, no matter how well-intentioned, has a breaking point. On Florida’s coastlines, we’ve found ours in a little-known federal regulation called FEMA’s 50% Rule.

Take St. Pete Beach. A homeowner, insured and prepared, experiences two back-to-back storms. One floods her home through the city’s sewer system. The other rips off her roof. She files claims, hires contractors, and follows the process. Then she’s hit with something unexpected: because repairs exceed 50% of her home’s assessed market value, excluding land, FEMA regulations require the entire house to be brought up to current flood plain standards. That means elevation, demolition, and hundreds of thousands in additional costs.

In theory, the 50% Rule promotes resilience. In practice, it creates an impossible choice: spend more than your home is worth, or walk away.

Now zoom out. This isn’t an isolated story — it’s a growing pattern across older coastal neighborhoods in Florida. When modest homes are substantially damaged, they’re often razed. But what replaces them isn’t equivalent. Bungalows are bulldozed, and in their place rise luxury homes built to the latest code — and sold to the highest bidder. The rule doesn’t restore what was lost. It resets the neighborhood. It’s a one-way ratchet: always upward, always more expensive. For longtime residents, it’s not the storm that forces them out. It’s the aftermath.

FEMA’s role doesn’t stop there. The agency’s flood insurance claims process is notorious for delays, denials, and confusion. Adjusters often arrive late. Paperwork gets lost. Appeals can take years. As of 2023, there were still unresolved appeals related to claims from Hurricane Sandy — more than a decade after the storm.

At its core, the system is structurally flawed. Wind and flood damage are covered under separate policies, often by different insurers. Homeowners are forced to prove the unknowable: was it water or wind that ruined their living room? The courts get involved, and months — sometimes years — pass as insurance companies argue over liability. Meanwhile, families remain displaced, unable to rebuild.

One reason flood isn’t included in standard homeowners insurance is because it’s not reinsurable in the private market. Without a federal backstop, insurers can’t absorb the catastrophic risk. So we separate perils, divide coverage, and create confusion.

We can do better.

Florida should lead the way in combining perils into a single, all-risk insurance policy — one policy, one adjuster, one check. To do that, states must be allowed to opt out of the National Flood Insurance Program (NFIP), receive federal block grants, and establish their own flood insurance systems backed by federally supported reinsurance pools. This would solve the reinsurance problem and finally make comprehensive flood coverage viable in the private market.

We must also reform the 50% Rule itself.

First, base the threshold on replacement cost, not outdated market values that often severely underestimate actual rebuilding costs in today’s economy. Second, exempt emergency repairs — such as roof patching or mold remediation — from triggering full compliance. Third, reward mitigation efforts. If a home already features an elevated foundation or a fortified roof, those upgrades should be considered in determining compliance. And finally, allow hardship exemptions for seniors and low-income homeowners — those least able to absorb the financial burden and most vulnerable to displacement.

None of these proposals are radical. They’re common sense steps toward a system that promotes safety without punishing the people it’s meant to protect.

This isn’t about politics. It’s about fairness. The homeowner on St. Pete Beach didn’t ask for special treatment. She asked for clarity and a chance to stay in the home she worked hard to maintain. What she — and thousands like her — need is not another FEMA form, but a policy built on empathy.

One that recognizes the storm isn’t over when the skies clear. For many families, that’s exactly when the real disaster begins.

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Jeff Brandes is the president of the Florida Policy Project and a former Florida state Senator who has long focused on housing, insurance, and disaster resilience issues.