A home at 307 67th St., Holmes Beach, was remodeled last year based on a private appraisal that established value using a formula approved for homes that fall under the pre-Florida Insurance Rate Map.
In the hope of encouraging one-story home remodels, Holmes Beach commissioners turned away from using values from the Manatee County Property Appraiser’s office, and instead let stand the more flexible “market value” definition that includes private appraisals.
The move turns around the commission’s previous direction to city attorney Patricia Petruff to draft an ordinance to eliminate independent certified appraisals for substantial improvements to ground-level homes, which limits rehab, remodel or addition of a structure that equals or exceeds 50 percent of its market value before any improvements.
If the cost exceeds or equals 50 percent, it is considered by FEMA to be a substantial improvement.
If the cost of improvements are less than 50 percent of the building’s market value, it is considered non-substantial.
The Federal Emergency Management Agency 50 percent rule applies to ground-level pre-FIRM homes, those built previous to the enactment of the Florida Insurance Rate Map.
Property owners have an option to retain ground-level living space in pre-FIRM homes under the rule that the city building department enforces through local and state codes.
With the support of building official Tom O’Brien, commissioners had favored substituting the county appraiser’s value for rehab permits on pre-FIRM homes to achieve consistency and address what some considered questionable appraisals.
However, at its Feb. 21 meeting, the commission reconsidered its previous leanings after receiving emails from appraisers and others that objected to the proposed elimination of private appraisals to determine substantial improvements.
In addition, new policies to be established by the mayor and building department — requiring the city to seek a second opinion for what they described as out-of-line private appraisals — were recommended by city attorney Patricia Petruff and the commissioners.
The commission’s about face on appraisals was led by Commissioner David Zaccagnino. He pointed out the county appraisal method would result in valuations too low to allow pre-FIRM remodels, and as an example used his 1939 home’s value of $45,000.
“There are houses on my street where they sold the lot for $400,000 and tore the house down,” he said.
O’Brien defended the proposed change, saying it has been successfully used by the county and Longboat Key. He viewed it as “a less confrontational methodology” that would benefit the department.
Monti disagreed, saying he did not favor a “black-and-white policy,” and that the issue “boils down to one of interpretation” and trust in the building department.
Commission Chair Jean Peelen initially favored the county appraiser-based change because she hoped to achieve consistency, saying she wanted a policy that could outlive the current department.
Another consideration discussed by commissioners was the intent of FEMA to eventually require properties pre-FIRM homes to be elevated.
Titsworth said, “If that’s FEMA’s intent, I don’t think it’s fair to people who have lived in their homes, taken good care of their homes, nurtured their homes, kept up with upkeep so there’s no rot.”
She questioned how the Manatee County Property Appraiser value could be valid, without someone looking at the homes as private appraisers do.
“Some of these old homes have considerable value just because of how well the people took care of them,” she added.
Commissioner Marvin Grossman researched seven houses that sold in the last three months, and determined it would take a 25 percent modifier to bring the county appraisers property value to the sales price.
But even with a modifier, he said, the county’s lower values could inhibit FEMA remodeling, and so he favored the more flexible private-appraisal approach.
Like the other commissioners and Petruff, Grossman objected to appraisals based on replacement values.
Petruff pointed the homeowner can choose to establish market value by independent certified appraisals, adjusted tax-assessed values or actual cash value — the structure’s replacement cost depreciated for age and quality.
She told commissioners leaving the code as is was fine, but recommended the city set a procedure for “appraisals with a seal,” warning that only another certified appraiser can challenge such appraisals.
Petruff also recommended renovation costs be examined by a reputable source.
Dave Moynihan, a real estate professional and chair of the city’s board of adjustments, and certified appraiser Richard Bass, wrote opposing the proposed change.
Moynihan stated, “Changing the Manatee County property appraiser’s valuations would be a mistake. Those figures are all over the board and lack consistency and are traditionally very low compared to real value. As a 35-year-plus island Realtor, I have seen sales going at assessed value to three times assessed value.”
He continued, “If you feel that a certified appraiser is inflating numbers to benefit the homeowner and or builder, then I recommend you initiate a review of the FEMA appraisals by a reputable firm.”
As an appraiser employed by the city to review questionable appraisals last year, Bass also objected to the county-only approach.
“Relying on Manatee County’s assessed values is, in my opinion, not valid. The property appraisers’ office does not update the cost approach each and every year. They conduct statistical analysis and allocate value between land and improvements using a mass-appraisal model.”
Limiting substantial improvements based on county values, Bass continued, “artificially limits the opportunity to improve properties (and) increase the tax base of the city.”