Why Fort Myers Beach's Houses Are Coming Back Faster Than Its Hotels

How do you justify spending $4 million to $5 million to rebuild a five-room inn? Jacki Liszak, president of the Fort Myers Beach Chamber of Commerce, asked that question about her own property in Gulfshore Business this fall. Her answer is that she can't, at least not without a height variance from the town and a public benefit to support it. Ian destroyed her Sea Gypsy Inn at 1698 Estero Blvd., and the lot is now leased to The Goodz, a hardware store.

In the same article she described the rest of the island this way: "The houses are coming out of the ground fast." Accommodations, by her estimate, are still at 65% to 70% of where they stood before the storm.

Both of her statements come from the same cost math. Rebuilding to today's code costs roughly the same per structure on Estero Island whatever goes inside it. A single household can carry that cost. Four or five hotel rooms often can't. For a buyer, this means new construction on Fort Myers Beach is priced from what it costs to build, not from the county comps.

A Fixed Cost Spread Over Different Numbers

Hurricane Ian destroyed about 900 of the 2,100 structures on Fort Myers Beach, and the year-round population fell from about 7,000 to 3,500. Every new or substantially damaged building that replaces them has to meet current floodplain requirements, including elevation standards. In residential and light commercial districts, the town caps height at three stories or 35 to 40 feet. Commercial and resort districts allow up to five stories or 70 feet, and anything taller needs a variance.

Those two rules work together. Elevation pushes living space up, and the height cap stops the building from adding floors to pay for it. On the bay-front home John and Leslie Munger are rebuilding on Madera Street, builder Randy Stam of The Property Medic told Gulfshore Business that "the first 10 to 12 feet is unlivable space." The ground floor that used to be the main living area is now garage and storage, and the living space starts about 12 feet up.

For a family home, giving up that ground floor is a design choice. For a small inn, it means rooms it can no longer rent. That difference explains why the island's residential streets are filling in first.

What "Built to Code" Looks Like on the Island Right Now

Code compliance sets a floor, and owners are spending above it. Recent local reporting shows a range of construction approaches, ordered here from most common to most specialized:

1. Concrete to the first floor, wood above. Stam calls this the more common approach. Concrete runs up to the first-floor elevation and wood framing goes the rest of the way.
2. Full masonry. The Mungers chose concrete block all the way to the roof. Code doesn't require it. As Stam put it, "It's based on the owner and the kind of money they want to spend." Their architect is John Carsi of Palladian Design Studio.
3. Steel frame. On Anchorage Street, Scott Houston is building a three-story, 6,500-square-foot home from a Bauhu Modular steel kit. It arrived as 85,000 pounds of steel in six shipping containers and is being assembled by Fort Myers Beach-based Tri-Town Construction. Houston said steel tariffs made the frame about 25% more expensive. Florida Solar Design Group installed 66 rooftop panels and three batteries so the home can keep its air conditioning running if the grid goes down.
4. All concrete. The Beach Observer reported in February that Royal Corinthian Homes had started an all-concrete home at 718 Estero Blvd. It has concrete floors, walls and roof on 30 drilled pilings. Company president Jonathan Walters said it would take longer and cost more than an average build, with occupancy expected in early 2027.
5. Modular. The same report noted that Idyll Construction was building two modular homes in the former 10-lot cottage cluster nearby.

Owners are still filing permits. The town's permit portal shows permit 261577, issued October 5, 2026, for a replacement single-family residence at 518 Carlos Circle.

For a buyer, two new elevated homes of similar size can differ a great deal in what went into them. On this island, the framing system is a pricing variable. It belongs on the list of questions to ask a seller and builder about, alongside square footage and view.

Why a House Can Make the Numbers Work

John Munger put a figure on the total in his Gulfshore Business interview: "By the time you acquire the lot and then elevate the house and make it sufficiently strong, you're talking $2 million to $3 million." He also said, "Folks with that kind of money have choices."

That figure is far above what either household paid for the property it replaces. Houston bought on Anchorage Street for $525,000 in 2007. The Mungers bought their bay-front house for $635,000 in 2013. These owners didn't choose that new cost basis because of a hot market. The code and their own resilience choices set it.

One household can carry that cost by spreading it across more than one use. Houston, who also has a home near Indianapolis, plans to rent his new house as a vacation property because of its higher cost. Gulfshore Business noted that building rentals instead of full-time residences was a trend on the island before Ian, and that vacation rental signs now appear across it. The Beach Observer described the same buyer profile in February: people looking for a mix of personal use and vacation rental income, many of them from Florida's East Coast and the Northeast.

A five-room inn has no comparable way to offset its cost. The building has to earn back its rebuild from a fixed number of room-nights, under a height cap it can only exceed by asking for a variance.

The Discount That Left and Came Back

Flood insurance is the one carrying cost on the island that recently changed in owners' favor. Soon after Will McKannay became town manager in May 2025, FEMA placed Fort Myers Beach on probation in the National Flood Insurance Program. According to Gulfshore Business, that removed a 25% flood insurance discount and added a $50 fee for policyholders. FEMA lifted the probation in November 2025. McKannay called the compliance process "a watershed moment" that let redevelopment move again. Single-family homes started going up after that.

FEMA's Florida Community Status Book, current as of October 17, 2026, lists Fort Myers Beach as Community Rating System Class 5 with a 25% discount, effective April 1, 2026. WGCU reported that the reduction applies to most NFIP-insured properties on policies issued or renewed on or after that date. If a seller's premium history comes from the probation period, it may not reflect what a policy issued now would cost. This is general information, not legal, insurance or financial advice. Confirm your own property's flood coverage and premium with a licensed insurance professional.

Where County Numbers Stop Helping

Regional data shows a calm, well-supplied mainland market. That makes the island's numbers stand out even more.

The last row is one owner's estimate, and it puts a new Fort Myers Beach home at roughly five to eight times the county's September 2026 single-family median. That gap comes from construction cost, not demand. A seller of a new elevated home has a cost basis set by the builder. A buyer comparing that home with an older surviving house is comparing two different construction standards, not just two prices.

The Commercial Blocks Are on a Slower Clock

The island's large commercial parcels traded quickly but have been slow to build. Seagate Development Group paid $52 million for the 10-acre Red Coconut RV Park site at 3001 Estero Blvd. in September 2023. The town approved two 17-story towers totaling 137 units plus four single-family homes, and a Lee County Circuit Court judge later ruled the town had followed proper procedure in granting the variances. London Bay paid $38.2 million for the 3.6-acre Outrigger site in July 2023. At Times Square, the $13 million Sunset Beach Resort held its groundbreaking on July 6 of this year, before its construction permits were in hand.

That means a buyer moving into a new home this season may wait years for the restaurants, rooms and storefronts nearby to catch up. On Madera Street, the Mungers' homeowners association has three empty canal lots for sale and plans to turn a fourth into pickleball courts. Blocks across the island are filling in one parcel at a time, and each parcel faces the same cost decision.

Questions We Hear About Island Rebuilds

Is a newly built home on Fort Myers Beach built to a higher standard than an older surviving one? New and substantially damaged structures must meet current floodplain requirements, including elevation standards. Beyond that minimum, owners have chosen anything from concrete-and-wood to full masonry, steel and all-concrete construction, so get the specific build details from the seller.

Why are some lots still vacant four years later? Each owner faces the same choice Leslie Munger described to Gulfshore Business: clear the lot and sell it, or rebuild. Rebuilding to today's standards usually costs far more than the property originally sold for.

Does the restored flood insurance discount apply automatically? WGCU reported that it applies to most NFIP-insured properties on policies issued or renewed on or after April 1, 2026. Confirm how it applies to your property with your insurance agent.

If you're weighing a new elevated home, a surviving home or a cleared lot on Estero Island, the construction details will shape value as much as the address. McMurray and Members can help you understand what is behind a rebuilt home's price before you make an offer. Let's Talk.