Saving lives is the ultimate concern when preparing for an earthquake, but building retrofits bring so many cost benefits that they make good business sense as well. 

Retrofits enhance a building’s value by extending its longevity and making it safer for the people who occupy it. But there are many other positive cost benefits as well.

These include protection from:

  • Liability costs associated with damage, death, and injury
  • Loss of income when a building gets red-tagged
  • Loss of equity if building is destroyed
  • Financial obligations tied to the original mortgage loan
  • Demolition costs including abatement of asbestos and lead
  • Reconstruction costs and cost overruns
Seismic Retrofits Make Good Business Sense. Here’s Why

Photo Credit to Southern California Earthquake Data Center At Cal Tech

Financial incentives such as preferable loan and insurance rates, density bonuses, reductions in development standards and relief from nonconforming provisions can also incentivize building owners to perform upgrades that promote building safety and revitalize communities for greater economic impacts.

Resilience is good for communities, and good for business.

Save Up to $7 for Every Dollar Spent

Every dollar spent retrofitting a soft-story structure will save the owner up to seven dollars, according to a Caltech study – and that analysis did not factor in loss to contents, alternate living expenses or deaths and injuries – all of which would have significantly increased the cost-to-benefit ratios.

In a separate study, the university determined that seismic retrofits are cost-effective when projected annualized loss would be reduced by 50 percent or more at a cost that would equal no more than 10 percent of the replacement cost of a building.

Here’s how a typical cost-benefit analysis would look like for that formula, based on a soft-story retrofit:

  • Apartment Building Value: $250,000 per unit
  • 10-Unit Apartment Building: $2.5 million
  • Retrofit Cost (10 units): $75,000
  • Percentage of Value: 3%

It’s not just academics who say retrofits are a wise investment for property owners. The Federal Emergency Management Agency found similar cost benefits in a two-year analysis of seismic retrofit scenarios applied to a variety of building types.

Avoiding Liability, Loss of Income

Loss of income can occur when commercial property is damaged to the point where it is no longer habitable. This can create severe financial hardship for property owners who not only lose their monthly rental income, but are simultaneously facing the costs of recovery coupled with ongoing monthly payments associated with their original mortgage.

What legal risks do property owners face if they don’t have their buildings retrofitted? A two-year study funded by the National Science Foundation’s Earthquake Hazard Reduction Program determined that case law puts the question in the hands of a jury to decide.

In a precedent-setting case in Paso Robles, two employees of a clothing store were crushed to death by falling bricks during an earthquake in 2003. The building had been ordered by the city to be seismically retrofitted, but the deadline to do it had not yet passed.

A jury in the case found the building owner negligent based on the fact that he had received a retrofit order, knew the building was potentially dangerous but had not taken action to correct the problem.  The liability award was for $2 million.

Is your building at risk? Thousands are.  Use that knowledge to protect your future.  Contact Optimum Seismic today at or call (833)978-7663 to arrange for a free property assessment