ST. PETERSBURG, Fla. — To say the home-buying process in Florida is overwhelming might be an understatement for some.
A crazy real estate market, expensive homes and flood insurance, and now, there's one more thing you need to worry about – your home's lookback period.
Your home's lookback determines how much money you can spend on repairs within a set time frame.
So, what is a lookback?
You first need to know about FEMA's 50% rule. This rule applies anywhere that wants to participate in the federally-backed FEMA National Flood Insurance Program (NFIP) to help people purchase flood insurance.
If you live in a special flood hazard area, this impacts you.
The FEMA 50% rule means that if you, a homeowner, need to fix or improve your house, the cost of the work done can not equal or exceed 49% of the home's depreciated market value within the specified lookback period of the municipality issuing the building permit.
Your lookback period is set by the municipality in which you live. Some communities require the cost of improvements to be calculated cumulatively over one or multiple years.
For example, in the city of St. Pete Beach, the lookback period is five years. This means if your home's depreciated market value is $100,000, the homeowner has five years to use a budget of $49,000 on home repairs or renovations before the lookback period resets.
So what happens if you go over that set budget? Your permit gets denied.
When permitted working hits or goes over 50% of your home's depreciated value, the building then must be brought into compliance as if it were new construction.
There are two exemptions to FEMA's rule: If a home improvement is being completed to correct a code violation or in instances of work being done on a historic building.
If you've made it this far and still wonder, how does this impact me? The lookback period on a home does not reset with a new owner. This means if a previous homeowner sold you your home with turnkey renovations, then a storm hits, you may not be able to get the permitting needed for repair work to be done.
How do you find out what your home's lookback period is?
"There's no centralized place for information," Mike Wyckoff, president of the Pinellas Realtors Organization, explained. "So each municipality has its own separate rules on how they're interpreting it and there's no one place to go to get that information."
This means if you're looking to buy a home in the Tampa Bay area and want to know the lookback period for five different cities, you have to call each one and hope to get a straight answer.
"It really is frustrating for buyers," Wyckoff said.
Wyckoff said he's had buyers walk away from their dream homes after learning the reality of where a long lookback period may leave them. It's a confusing topic to explain that could leave homeowners unable to comply with their home insurance.
"I think the average homebuyer doesn't get it, they don't even know," Wyckoff said. "And then if you try to explain it to them, they think, 'Oh, it's 50% of the purchase price of the house.'"
It's not. It's the depreciated market value. And the depreciated market value does not change until your lookback period resets. If you're looking to make home improvements now, navigating the rising cost of labor and supplies for contracted work, you may be doing that within a budget set by a home value, and depreciation value, calculated years ago.
After Hurricane Ian, Lee County learned the hard way that a five-year lookback period meant a lot of people who were trying to have compliant homes couldn't even start to repair storm damage.
"They ended up having to change it because it meant that their people couldn't rebuild, versus people being able to get back in their homes," Cyndee Haydon, the 2023 National Association of Realtors chair, said.
Following Ian, Lee County and Cape Coral changed their county and city codes to a one-year lookback period, enabling residents to fix their homes with a more flexible FEMA-approved budget.
"It's even more urgent because insurance companies keep mandating more and more things be done," Haydon said. "The average homeowner has no idea and they're doing all the right things."
Haydon has worked with clients who are being told by home insurance companies they need to replace their roofs, but they can't because a previous homeowner exhausted the permitted work budget of a home.
"Knowing what the look back period is one thing, how much you have left when you buy a house? How much did they use up is a whole other thing," Haydon said. "It's a complicated problem."
Seeing the problem so many are facing, Haydon is now advocating for change.
"A one-year look back that standard across the state would be ideal, because then wherever you live, people know what to expect, how to plan and what to look for when you're buying a home," she said.
In Pinellas County alone, there are 24 municipalities. That's 24 varying lookbacks without a standardized way to find out how much work has been done on a home and how much it costs.
Haydon wants to see the state legislature create a standardized lookback for the entire state over a one-year period. This would also allow more people to take advantage of state programs to harden their homes against storms.
Haydon has been working since August to compile the lookback information of each Pinellas County municipality.
Six cities have no lookback periods:
- Gulfport
- St. Petersburg
- Indian Rocks Beach
- North Redington Beach
- Pinellas Park
- Treasure Island
Two cities have a one-year lookback period:
- Clearwater
- South Pasadena
- Unincorporated Pinellas County
Five cities have a five-year lookback period:
- St. Pete Beach
- Belleair
- Belleair Beach
- Dunedin
- Largo
Safety Harbor has a lifetime lookback period.
10 cities and/or towns have not responded to Haydon's requests.
Malique Rankin is a general assignment reporter with 10 Tampa Bay. You can email her story ideas at mrankin@10tampabay.com and follow her Facebook, Twitter, and Instagram pages.