I’m coming to you live on location from Key Biscayne Florida.
One of the most beautiful places to visit in the US are the Florida Keys. The waterfront homes in the keys are a dream to me. Many of them are built up on stilts to protect them from the storm surge of the occasional hurricane.
This strip of islands stretches all the way from Miami to Key West. From the very first Key, called Virginia key, down the Rickenbacker causeway towards Key Biscayne. Further south, Key Largo. The entire drive through the keys stretches for 118 miles or about 190 km.
The state has a rule that the island chain has to be able to get everyone out 24 hours before a hurricane hits. And there’s just one road out. So there’s a limit to how many people are allowed to live in the Keys.
Hurricane Irma in 2017 did considerable damage to properties on the keys. Overall in Monroe County, 27,649 homes experienced some degree of damage, including 1,179 homes being destroyed, 2,977 homes receiving major damage, and 5,361 suffering minor damage.
Starting in 2023, no new building permits will be issued in the Florida Keys, a stipulation of a 1970s state mandate aimed at controlling development in the environmentally sensitive archipelago and ensuring timely evacuation of tourists and residents in the path of hurricanes.
Because the Keys were designated an area of critical state concern, development there is regulated by a law called the Rate of Growth Ordinance, known as ROGO, which requires property owners to go through a myriad of steps that can take decades before they can build.
Many of the thousands of people who have not built on their land haven’t done so because they are mired in the ROGO process.
The question is, will the renovation of an existing property be allowed? As long as the density is not being increased, will the county allow an existing property to be redeveloped, to be improved?
This has not been made clear.
As a real estate investor, this kind of situation is precisely what I look for. I love to see situations where there is a supply demand imbalance. In this case, there is a constraint being applied on the supply side. When these types of conditions exist, the downside risk to property value is reduced. The demand for homes in the keys appears robust.
The Keys have already survived a devastating category 4 storm. That has not deterred people from wanting to live there, from owning their own piece of paradise.