What is the cost of being unprepared for disaster?

In California, the numbers are staggering – and growing.

This year alone, the Golden State has seen natural disaster in the form of COVID-19 as well as record-breaking wildfires, bringing price tags to taxpayers in the tens of billions of dollars.

What is the Cost of DisasterProjections show that a major earthquake could bring about far greater costs for recovery – given the massive scope of physical destruction these mighty temblors can cause to buildings and infrastructure.

Research shows a significant 4-to-1 cost-benefit when money is invested to prepare a region for disaster.

Given the mounting number of emergencies and crises in this state, it’s clear that the exorbitant costs associated with disaster response and recovery is at a level California can not easily afford.  And yet, we invest relatively little in mitigation measures that can prevent natural hazards such as earthquakes from becoming disasters.

2020 disaster costs

In January – before the pandemic and wildfires struck – California was flush with cash: projecting a $5.6 billion surplus. But COVID-19 quickly transformed that into a $54 billion deficit, NPR reported in August[1].

The pandemic has taken a toll on global economies, and California has suffered a significant hit. The state Legislative Analyst’s Office anticipates revenues from taxes to drop by $42 billion in 2020 due to COVID-19 and the higher caseload-related costs associated with Medi-Cal, California Work Opportunity and Responsibility to Kids (CalWORKs), and CalFresh[2].

Then, in the midst of the pandemic, came record-breaking wildfires, which ravaged up and down the state  – adding  another $10 billion to the estimated disaster costs, according to a Stanford University study released in October.[3]

Researchers at the University of California, Los Angeles, anticipate that it will take two years or more for the state to recover from the economic loss suffered from the pandemic[4]. Unemployment, which was 3.9% in February, will average 10.8% this year, fall to 8.6% in 2021, and 6.6% in 2022, the Los Angeles Times reported[5].

A major earthquake could cost $252 billion

These costs are real. And so is the risk of an earthquake of epic proportions striking the state.

Not since the Great San Francisco Quake of 1906 has California experienced an earthquake of the magnitude “The Big One” is forecasted to be.

That 7.9-magnitude quake, striking 114 years ago when Theodore Roosevelt was president, caused massive destruction due to seismic shaking, subsequent fires, and tsunami action. It caused $500 million in damage – the equivalent of more than $13 billion today.

Why is this relevant today?

There is a terrifying 46% likelihood that a major quake of magnitude 7.5 or greater will strike California in the next 30 years.

If those odds don’t scare you, this one will: It is almost certain – a 99% chance – that a 6.7-magnitude quake, (the same size as the devastating Northridge earthquake of 1994), will rattle the state in the next 30 years.

Many people in Southern California still vividly recall that Northridge quake, which was the nation’s most devastating natural disaster at the time. Homes, businesses, and apartment buildings splintered and collapsed. Aftershocks fueled the ferocity as large patches of the region were left heavily damaged: nine hospitals were declared unstable; schools and universities were red-tagged; gas and water pipes broke; utility lines fell; fires raged, and flattened bridges and overpasses left many roads impassable.

The threat of a similar quake striking again is so high that the California Geological Survey dubbed Los Angeles County as having the greatest potential loss from a major earthquake, compared to any other region in the state.

This was based on the many faults located in the region, anticipated ground motions, soils and the amount of density of development in the area.

In Southern California, a magnitude 7.1 quake along the Puente Hills fault running through downtown Los Angeles could cause more than $252 billion in damages with thousands killed and hundreds of thousands being displaced.[6]

The USGS “ShakeOut” study anticipates that at least five pre-1994 steel moment-frame high-rise buildings would collapse under this scenario, with about 5,000 people inside them if the quake strikes during regular business hours.

As many as 50 low- and mid-rise concrete moment-frame buildings would collapse, and 900 unreinforced masonry buildings would be irreparably damaged.

Projections for the Bay Area are also alarming.

Stanford University calculated that a 7.2-magnitude earthquake along the Hayward fault would be disastrous. “Direct [building and infrastructure] losses from simulations are U.S. $115 billion,” the report found. More than $60 billion of that would occur in the housing sector. Infrastructure damage would result in ripples through the economy causing an additional $35 billion in losses.

The study estimates that it may take more than two years for the regional economy to recover.[7]

Similarly, a 6.9-magnitude earthquake along the Rose Canyon fault in San Diego would devastate the seaside city, according to an Earthquake Engineering Research Institute study unveiled at the 2020 National Earthquake Conference in San Diego.  The report projected extensive losses:

  • 45% of all residential buildings damaged
  • 23,000 residential units severely or completely damaged
  • 36,000 households displaced
  • 40% of commercial and industrial buildings damaged, (20% extensively or beyond repair)
  • $38 billion in damage
  • $5.2 billion in lost income

“(Earthquake) damage to buildings is expected to be severe and widespread, particularly in the heavily populated coastal areas and in the older urban areas,” the study found. “While most newer buildings, particularly single-family residences, can be expected to survive the scenario earthquake with repairable damage, many larger and older buildings can be expected to be more severely damaged and potentially unsalvageable.”[8]

Northridge, at a magnitude 6.7, was the costliest natural disaster in the United States at the time – causing up to $20 billion in damages and $49 billion in economic loss.[9] That combined $69 billion in today’s dollars would total more than $121 billion[10].

Figures in 2020 dollars for other major quakes in recent times would be:

  • San Francisco ($700 million in 1906) = $10.6 billion in 2020
  • Loma Prieta ($2.9 billion in 1989) = $4.5 billion in 2020
  • Cape Mendocino ($48.3 million in 1992) = $85 million in 2020

All of these scenarios add up to hundreds of millions – if not billions – of dollars in damage and economic loss.

Preparedness: more cost-effective than emergency response

California has taken a leadership role in the U.S. in guarding against disaster, but it is enough?

Statewide fire hazard mapping and Chapter 7A building codes require changes in how structures are built to protect them against wildfire. Tempered glass, screened vents and non-flammable materials can dramatically increase the chances of a building surviving a fire.

The devastating Camp fire of 2018 — considered the worst fire in California history at the time –devastated the mountain town of Paradise.

Research shows that of homes in that community built to Chapter 7A code, 51% survived, compared to 18% of homes built prior to 2008 when the updated codes were enacted.[11]

According to Cal Fire, as many as 3 million homes lie within the various “fire hazard severity zones” around the state. Dave Sapsis, a Cal Fire wildland fire scientist, told the Sacramento Bee there’s no way to know definitively how many of those homes were built before 2008, but he believes “it’s the preponderance of them, the majority.[12]

Earthquakes present a similar situation to wildfire:

  • We know where they are more likely to strike. (Near active faults.)
  • We know what types of buildings are vulnerable to collapse from seismic shaking.
  • We know how to retrofit those structures to keep them standing and open for business.

Several municipalities have adopted retrofit laws requiring that older, vulnerable structures be fortified to withstand an earthquake. That includes: San Francisco, Los Angeles, Berkeley, Richmond, Freemont, San Jose, Oakland, Alameda, Beverly Hills, Santa Monica, and the counties of Los Angeles and Santa Clara.

When Los Angeles Mayor Garcetti in 2015 signed L.A.’s ordinance into law, he said he did it not only for life and safety issues, but to protect the city’s ability to function after that long-anticipated monster earthquake strikes. Public response to the new law has been much better than expected, particularly among building owners, who have recognized that it makes good business sense to retrofit their properties.

The two types of buildings requiring retrofits under L.A.’s ordinance are: soft-story buildings built before 1978 with parking on the ground floor and units built above; and non-ductile concrete structures, comprising most concrete multi-story buildings built before 1977.

As of Oct. 1, more than 5,000 of the 12,891 vulnerable soft-story structures in the city had been retrofitted, representing 39% of those deemed unsafe. (Soft story buildings have until 2022 to complete their retrofits.)[13]

Also as of Oct. 1, just 2 of the city’s 1,322 vulnerable non-ductile concrete buildings had been retrofitted. (These building owners have until 2040 to complete their retrofits.)[14]

That’s more than 5,000 buildings that are more likely to withstand a major earthquake’s shaking.

Every one of these retrofitted buildings represents enhanced resilience for the city — safer homes, workplaces and venues for commerce and entertainment.

There’s still a long way to go to complete the program in Los Angeles, but progress is being made.

It pays to be prepared

Research by an independent group of experts in 2005 found that for every dollar invested in actions to reduce disaster losses, the nation saves about $4 in future costs.[15]

Billion-dollar natural disasters are becoming more common in the United States. Since 1980, catastrophes of this magnitude have affected all 50 states, hitting five to 10 times annually. Preventive actions to reduce the costly cycle of rebuilding and repair are needed now more than ever. There are steps that individuals, businesses, communities, and the federal government can take now to better prepare for and avoid the worst effects of extreme weather—and reduce costs.[16]

Investing in preparedness saves taxpayers money, the Pew Trust Charities affirmed[17].

Yet while the payoff is clear, governments and individuals have historically underinvested in risk reduction, the Pew Center explains.

predisaster mitigation Spending

Safer buildings: the foundation of a resilient community

There are many similarities between the COVID-19 pandemic, wildfires and earthquake disasters that have stricken our state.

Any disaster is devastating, but with earthquakes, it’s not just a matter of the terrible moments of actual shaking – there are the often crushing costs associated with recovery.

Debris from fallen buildings needs to be cleared, landfills will be overloaded, and the costs to rebuild significant.

Being able to avoid these costs with retrofits is not only a smart decision economically, but socially.

Retrofits save lives, preserve much-needed housing, ensure that businesses can remain open in an emergency, and enable communities to snap back after a major earthquake – to protect and preserve quality of life for all.

[1] National Public Radio, “California has lost a greater share of revenue that most states due to COVID-19,” https://www.npr.org/2020/08/03/895377375/california-has-lost-a-greater-share-of-revenue-than-most-states-due-to-covid-19

[2] California Legislative Analyst’s Office, https://lao.ca.gov/Publications/Report/4263

[3] ABC Channel 7 News, https://abc7news.com/california-wildfires-cost-of-cal-fire-stanford-wildfire-research/6897462/#:~:text=Damage%20from%20California’s%20wildfires%20estimated,cooperation%20needed%20%2D%20ABC7%20San%20Francisco

[4] Los Angeles Times, “Think California is bouncing back? Recovery will take more than two years, economists say,” https://www.latimes.com/business/story/2020-09-30/california-economy-ucla-anderson-forecast

[5] Ibid.

[6] Earthquake Engineering Research Institute, “Loss Estimates for a Puente Hills Blind-Thrust Earthquake in Los Angeles, California,” Earthquake Spectra, Volume 21, No. 2, pages 329–338, 2005. https://earth.usc.edu/files/htdocs/papers/tjordan/2005_Field_EQSpectra_LossEstimates.pdf

[7] Stanford University Urban Resilience Initiative, http://urbanresilience.stanford.edu/

[8] Engineering and Environmental Research Institute, https://sandiego.eeri.org/2014-eq-scenario/

[9] Earthquake Country Alliance, https://www.earthquakecountry.org/northridge/facts/#:~:text=The%20Northridge%20earthquake%20was%20the,%2449%20billion%20in%20economic%20loss.

[10] U.S. Bureau of Labor Statistics, inflation calculator, https://www.bls.gov/data/inflation_calculator.htm

[11] Sacramento Bee, “The weakest link: why your house may burn while your neighbor’s survives the next fire. https://www.sacbee.com/news/state/california/fires/article227665284.html

[12] Ibid.

[13] Los Angeles Department of Building and Safety, https://www.ladbs.org/docs/default-source/publications/misc-publications/soft-story-compliance-report.pdf

[14] Ibid., https://ladbs.org/docs/default-source/publications/misc-publications/non-ductile-compliance-report.pdf

[15] National Institute of Building Sciences, “Natural Hazard Mitigation Saves: An Independent Study to Assess Future savings from Mitigation, http://c.ymcdn.com/sites/www.nibs.org/resource/resmgr/MMC/hms_vol2_ch1-7.pdf?hhSearchTerms=Natural+and+hazard+and+mitigation

[16] Pew Trust, «It Pays to Prepare for Natural Disaster,” https://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2017/05/it-pays-to-prepare-for-natural-disasters#:~:text=Investing%20in%20preparedness%20saves%20taxpayers,about%20%244%20in%20future%20costs.

[17] Ibid.