planning ahead
A Jolt to the System
by M. Brett Gladstone
A major push is on at City Hall to require the retrofit of thousands of soft-story structures, mainly apartment buildings, in San Francisco. The concerns are varied, but the costs could be substantial. The new law may be almost as jolting for some building owners as the next “Big One.”
The city has funded a $1 million study to predict what would happen to some of the most seismically at-risk buildings in San Francisco. The study is called Community Action Plan for Seismic Safety. The focus of the first piece of the study was on buildings that have (1) five or more dwelling units, (2) three or more stories, and (3) a ground floor with storefront windows or large garages with few structural support posts. Engineers looked at how these buildings would react to earthquakes centered near San Francisco with strengths varying from a 6.9 earthquake, such as Loma Prieta, up to a massive 7.9 quake equivalent to the estimated size of the 1906 quake.
Most apartment buildings in San Francisco built before 1974 were designed only to withstand “vertical” forces (like gravity), because those were the only forces included in the California Building Code at the time. The Building Code is a statewide law that has not always taken into account the special concerns of localities. Code provisions to protect against failure under “horizontal” forces (like earthquakes) were first added to the San Francisco Building Code in 1974. California Health and Safety Code Sections 19160-19168 encourage (but do not require) the city to heighten seismic safety standards for existing soft-story buildings.
The CAPSS study found that the damage to the city’s 2,800 larger soft-story buildings could run as high as $1.5 billion. The cost to retrofit these buildings to avoid this damage is estimated at $260 million. Paying $1 to prevent $6 in damage sounds pretty sensible, but there are other ways to look at this issue. Financing the retrofits is an issue of concern because the average cost to retrofit the 2,800 buildings is almost $100,000 per building.
Landlords are concerned about whether the city will be able to help them secure reasonably priced funding to pay for the upgrade work to their buildings. One proposal is to take the unused money the city had set aside for loans to property owners for the retrofit of unreinforced masonry buildings (UMBs) and offer loans under this program. Even though there are funds left over from the UMB retrofit program, landlords feel that accessing those funds triggers some regulations for which compliance is too expensive. According to Chief Building Inspector Laurence Kornfield, if the city were to make funds available, these regulations would be reconsidered. (One report prepared by the San Francisco Planning and Urban Research Association, notes that though the UMB Ordinance was beneficial for the city, its goal was limited to saving lives and the Ordinance would have been more productive had it emphasized preservation of buildings, as well as saving lives, to create a “resilient city.”)
Most landlords will wish to pass these safety costs through to their tenants. According to the Rent Board, however, the maximum passthrough for buildings with six or more residential units is only 10% of the current monthly rent per unit. The maximum passthrough for buildings with five or fewer units is the greater of 5% of the current monthly rent or $30. Because of these passthroughs, some tenants rights groups may choose to fight the retrofit law. One tenant advocate has argued that the risk of harm to these soft-story buildings is exaggerated, and that a 5% or 10% raise in rent will cause unnecessary financial hardship for many tenants and the loss of housing for some. Though 58,000 people reside in these buildings, it has been pointed out that the buildings in question did not fall down in the 1989 Loma Prieta earthquake. Structural engineers, however, argue that Loma Prieta was one-tenth the size of the 1906 earthquake, and the damage in the Loma Prieta earthquake would pale in comparison to the damage caused by a real “Big One.” Furthermore, they state that the damage in the 1989 Loma Prieta earthquake would have been far worse had it been centered in San Francisco.
The proposed retrofits will occur mainly on the ground floor, because that is where the weakness in soft-story buildings exists. Retrofitting would include adding sheer walls and steel beams and posts. Because the retrofit will occur mainly on the ground floor, commercial tenants are more likely to be displaced than residential tenants.
In many ways, the new proposals are being developed in a far different way than standard Building Code legislation. Historically, the Building Code has been developed by engineers. In this potential soft-story legislation, social factors are included in the determination of what buildings should be required to have new retrofit protections. City officials are looking to see what harms they most wish to protect against. The SPUR report also points out that seismic safety laws should be created using a cost-benefit analysis, with a determination of what benefits the city wishes to see. The report advocates that one of the main goals of new soft-story legislation should be that “enough homes have been retrofitted so that the vast majority of San Franciscans are able to shelter in place” after a seismic event equivalent to the 1906 earthquake. Therefore, residential buildings, rather than warehouses, for example, should be the focus of the new soft-story retrofit ordinances. The SPUR report stresses that the city should be a “resilient city,” focused on keeping its inhabitants safe and housed. It states that other critical features in need of retrofit include gas lines and water lines.
The study on housing may just be the first of many studies on how various types of buildings in San Francisco can be kept from failing in a significant seismic event. Other concerns that may also be addressed under the soft-story retrofit ordinance are: preservation of older buildings; keeping children safe in schools; and protecting businesses essential to the economic welfare of the city.
Protecting soft-story buildings will help the city recover faster after an earthquake and will hopefully avoid a traumatic post-event debacle, such as in New Orleans after Hurricane Katrina. In the example of New Orleans, the writers of codes for levies arguably did not properly factor in the cost of rebuilding a city ravaged by flooding when the writers determined that a lower level of levy protection was acceptable.
As the SPUR study points out: “A mandatory program that no building owner can afford, or that causes enormous short-term disruption to achieve a hypothetical long-term result, will accomplish little. On the other hand, programs designed for the convenience or benefit of individuals don’t often get the job done for the community.” Laws requiring existing structures to be improved for safety reasons are relatively rare, but the city has passed a few other such laws recently.
Unreinforced masonry buildings have been required to have more structural support; and residential hotels have been required to have sprinklers added.
The SPUR report raises three different strategies involving retrofit legislation. The first is “mandated retrofit” along the lines of the UMB ordinance, whereby owners of subject buildings are required to retrofit their buildings by a certain date. The second strategy is “voluntary retrofit,” which is premised on the notion that with education and enough incentives, property owners will take a long-term view on the benefit of performing upgrades to avoid the risk of future loss. The third strategy is “triggered retrofit,” along the lines of the disability access improvements to public facilities; property owners would be required to make their seismic improvements when performing voluntary renovations over a certain dollar value.
Though the city’s study is not complete, the estimate is that up to 80% of these soft-story buildings will be totally destroyed or damaged beyond repair in a strong earthquake. By the time this article goes to press, the Department of Building Inspection will have provided the mayor’s office with retrofit guidelines. The mayor’s office has announced that he is in favor of some form of retrofit legislation, though specifics of such legislation were not announced.
The opinions expressed in this article are those of the author, and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. M. Brett Gladstone is a partner in the San Francisco real-estate law firm of Gladstone & Associates, and can be reached at 415-434-9500. Copyright © 2009 by Black Point Press. All rights reserved.