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The 50% Rule is a Federal Emergency Management Agency (FEMA) regulation of the National Flood Insurance Program (NFIP). When improvements to existing buildings, structures, and manufactured homes meet the definition of “substantial improvement(SI),” or when damage meets the definition of “substantial damage(SD),” communities must enforce requirements to bring those structures into compliance by meeting the requirements for new construction. This may include elevating the structure, using flood resistant materials, and proper flood venting among others.
Local officials must take four actions: (1) determine the cost of work, (2) determine the market value of buildings, (3) make SI/SD determinations and provide determinations to property owners, and (4) require owners to obtain permits to bring substantially improved and substantially damaged structures into compliance with the floodplain management requirements.
The City of Miami Beach tracks costs of improvements and costs of repairs over a specific period, referred to as “cumulative substantial improvement” of one(1) year. The formula the City of Miami Beach uses for determining substantial improvement is as follows:
Sum of Job values for all City of Miami Beach building permits in the last year /(divided by) the Property Value(as determined by the Miami Dade County Property Appraiser, or a certified Property Appraisal Depreciated Replacement Cost). If the decimal / percentage is greater than or equal to 0.50(50%) then this is considered Substantial and the structure must be brought into compliance with floodplain management (and building code) requirements for new construction based on flood zone. Every aspect of the structure must be made compliant.
For more information and answers to Questions About Substantially Improved/Substantially Damaged Buildings please refer to this FEMA publication: Answers to Questions About Substantially Improved/Substantially Damaged Buildings FEMA 213
