Be Smart — Assess Risks To Your Investments

New information has prompted the state to update its earthquake fault hazard map — and the move has many people in San Diego’s real estate industry worried the new classifications could be bad for business.

Members of the public have until May 19 to review and comment on the new maps, which if adopted will expand the regulatory zones associated with new findings about the Rose Canyon fault. The new maps establish new hazard areas along Interstate 5, branching off through downtown and up to La Jolla.

San Diego’s Rose Canyon Fault, once considered inactive, has the potential to release a devastating 6.9 quake, according to Earthquake Engineering Research Institute calculations:

  • 120,000 damaged buildings, 8,000 beyond repair
  • 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

Water, sewer, and gas service would be interrupted, along with airport and rail service. Building damage could create a significant housing and job loss crisis, researchers concluded. Liquefaction would damage beach communities, and landslides are projected to affect Mount Soledad, Point Loma, Mission Valley, and Sorrento Valley.

What’s best for the real estate industry?

News of these maps (and the threats that accompany them) sparked fear among many building owners and developers that the maps might hinder transactions in the future by requiring additional notification designed to keep people informed.

This is not realistic thinking:  The real harm to our industry comes when people do not understand and deal with the very real threats posed to their investments.

Multiple studies show a remarkable cost benefit to building owners who take steps to safeguard their structures  — and that starts by being informed about risks.

Caltech researchers put the benefits at up to $7 for every dollar spent on an earthquake retrofit of a vulnerable building.  This calculation accounts for several factors:

  • Liability associated with damage, death, and injury
  • Loss of income when a building is uninhabitable
  • Ongoing financial obligations tied to the original mortgage
  • Costs to rebuild, and more

A more resilient San Diego

EERI suggests that San Diego conduct a countywide review and inventory of seismic hazards to identify regional priorities and funding mechanisms. This should lead to the following outcomes:

  • Cities would compile inventories of seismically vulnerable structures, develop programs and ordinances for earthquake retrofits
  • The San Diego Association of Governments would map out overlay regional zoning and high-hazard areas to trigger review to reduce risks in those areas
  • Utilities and governments will increase disaster plans for resilience and emergency response

Read EERI’s report here: https://sandiego.eeri.org/2014-eq-scenario/; view the seismic fault map here: https://maps.conservation.ca.gov/cgs/EQZApp/; get more information on the maps and how to submit public comment here: https://www.sandiego.gov/sites/default/files/2021-02-22_fault_zones.pdf.

You can also learn by watching The Resilience Advantage – a monthly webinar series featuring experts addressing risks, building safety, business and economic impacts and social concerns associated with seismic resilience of buildings. There is no cost to attend. Optimum Seismic has teamed up with a coalition of leading business organizations and government officials to present important information for business and community decisions to make appropriate decisions.

The next webinar, entitled Sustainability & Resilience-A Natural Connection, is from 11 a.m. to 12:30 p.m. Wednesday, April 21. For more information, visit optimumseismic.com/the-resilience-advantage. Past webinars are also posted there for those who missed any of the series.

Visit optimumseismic.com for more information, or call us at 323-978-7664.