Longboat Key sees dozens of home rebuilds since January 2020

Even before their Halyard Lane home was built, Kathryn and Ron Lee fell in love with the canalfront view the property provided, even though there was already a house on it. 

A house they weren't particularly interested in.

Years ago, the couple split time between their former Longboat Key home on Birdie Lane and the Northeast.

“We were gradually spending more time here, and we find this lot with a small house on it,” Ron Lee said of the land, which once featured a home last valued at $84,000. “It was derelict, and it was clearly a teardown. You’d buy it just for the dirt and build a new house.”

The Lees say they’ve met several Longboaters who have visited, bought a home on the island and then decided to buy “a better place” on the same piece of land.

“We’ve always lived in traditional homes, and we then began to envision maybe doing something different and building a modern one here,” Kathryn Lee said.

They're not alone. On an island with hardly a vacant lot or open space, demolition is almost always a consideration for new home.

From Jan. 1, 2020, to June 23, 2021, the town of Longboat Key Planning, Zoning and Building Department approved 36 permits for single-family homes or mobile homes. Of those, 24 were replacement structures, accounting for $22.2 million of total permitted construction value over the time period of $28.94 million.

While the Lees bought their Halyard Lane property in May 2013 for $2.2 million, they didn’t move in until 2019. It took several years for crews to finish building the three-bedroom, three-bathroom home.

“If I look at what we paid for the land, what we spent on professional fees and what we spent on building, I’d have been surprised if there was much capital gain to be made, frankly,” Ron Lee said. “That has proved to be a hell of a lot better than my expectations, but we built it to live in it.”

The Sarasota County Property Appraiser’s website shows the 2021 just-market value of the Lee’s current home at about $3.88 million. Popular real estate sites indicate a higher-still estimated value.

Longboat Key District 1 Commissioner Sherry Dominick is a Realtor with Michael Saunders & Co. She explained that people moving from other areas often are interested in new construction where older homes already exist.

“I think ever since COVID, we’ve seen a movement afoot towards the single-family home, and perhaps in preference to condos because people want the kind of sanctuary of their own home rather than a condominium, at least during the COVID period,” Dominick said. “And, that trend, I think, has continued.”

Dominick said many homeowners make upgrades like adding a home office or an exercise area. She also mentioned how FEMA’s 50% rule forces many homeowners to elevate their homes if they want to make significant updates.

“That requires you to elevate if the improvements you’re making are in excess of 50% of the value excluding the land, and it doesn’t take all that much before you cross that rule and then you have to elevate, so you have basically a new structure being built,” Dominick said.

Some of that added value is driving up the town's overall property values, along with a decrease of active listings in the past year.

The town’s year-to-year property tax values rebounded this year after falling in 2020 for the first time since 2013. Property taxes typically make up about three-fourths of the $16 million-$17 million in total revenue the town collects each fiscal year.

As new homes go up, the rate of homesteaded properties has stayed relatively flat, indicating vacation homes are going up elsewhere.

Town Manager Tom Harmer said the town’s 2,995 homesteaded properties are similar to what Longboat Key has seen in previous years. For example, Longboat Key had 2,956 homesteaded properties in 2014.

“When you went back and looked say six or seven years ago, we were in the same situation,” Harmer said. “So some communities because of the way development has happened and hotel houses and things like that, the number of residences that are homesteaded have gone down, and they’ve lost voters and it’s kind of changed the character of the community.

“What we’ve seen is, we’ve been pretty darn stable over the last six to eight years with our primary residences, and I think that’s good and it’s not a total surprise.”

The Lees are among the Longboaters who now call the island home on a full-time basis. They say the building process was worth it.

“It was wonderful just moving in here,” Kathryn Lee said. “It was quite a long and involved…building a house, it has a lot of fun aspects to it, but it has a lot of stress.

“Prices go up, timelines extend, things that you’d thought you’d agreed upon aren’t quite understood.”

Dominick recommended having a thorough understanding of the costs associated with the building process. She mentioned the high demand for homes, the scarcity of resources to build them, code requirements and FEMA requirements.

“I know of one project where the cost was going to be so significantly more than the homeowners hoped that they stopped after demolition was done of the interior of their old house, and now they have it on the market trying to sell it,” Dominick said. “And so, the house is just a shell, so making sure you understand all the costs is probably the single most important thing.”

Dominick also said it’s important for owners to understand the timeline of their builds because it takes time to see a return on investment.

“The second thing is understanding how many years you’re going to have to own the property in order to potentially recover your investment,” Dominick said. “Not to over-improve your property…in other words, make sure that your selection of finishes are in line with the neighborhood, and you’re not choosing the most expensive of everything because you may not recover your investment.”