Substantial Improvement (50% Rule)

All municipalities in Monroe County participate in the National Flood Insurance Program and are required to have floodplain regulations. Flood Damage Prevention Ordinances are in place for residents of a community to purchase subsidized flood insurance through the National Flood Insurance Program (NFIP).

Substantial improvements, commonly referred to at the 50% rule, are any reconstruction, rehabilitation, addition, or other improvement of a structure where the cost exceeds 50% of the market value of on the structure.

Existing buildings built prior to 1974 have been grandfathered into the National Flood Insurance Program (NFIP) at their current elevations.  However, that grandfathered status terminates once the building needs to be repaired or renovated over 50% of the market value of the structure (this includes the structure only and does not include the land).  Once that threshold is exceeded, renovation must meet current codes.  This includes elevating the dwelling above the base flood elevation.

The market value of the structure is determined in two ways.  The Monroe County Property Appraiser’s value for the building (‘Market Improvement Value’ only and not the land).  Then 20% is added to that building value (15% for the City of Key West).  This is typically on the lower end of the value and may not represent the actual costs of the structure.


The other way is to obtain a private Market Value property appraisal from a local property appraiser.  A private appraisal typically reflects the actual depreciated value of the building and is higher than the Property Appraiser.

Any project for improvement of a structure to correct existing violations of state or local health, sanitary, or safety code specifications which have been identified by the local code enforcement official and which are the minimum necessary to assure safe living conditions.