Business

L.A.’s Earthquake-Proofing Problem: Who Pays?

Los Angeles city officials are trying to get ahead of the next "big one" and save lives, but the costly upgrades needed for wooden and concrete buildings make a proposed retrofitting plan a big ask, associations in the city note.

It’s a big task, earthquake-proofing the country’s second-largest city.

Nonetheless, Los Angeles Mayor Eric Garcetti this week called for a seismic shift in the way that already-standing structures are protected from large quakes. The recommendations, outlined in a newly released report [PDF], are firm, requiring retrofitting of many wooden buildings built before 1980 within five years and of concrete structures built before 1980 within 30.

Hundreds of lives are at stake whenever the next quake hits, Garcetti argued. “Complacency risks lives,” the mayor said, according to The Los Angeles Times. “One thing we can’t afford to do is wait.”

For the most part, business groups are on board with the strategy—the boldest set of recommendations issued by a California city—but they see one problem: the high cost of implementing the changes. Retrofitting a wooden apartment building costs between $60,000 and $130,000; the cost for concrete buildings varies significantly—from tens of thousands of dollars to more than a million—depending on the size of the structure.

As City Councilman Gil Cedillo noted: “The question is going to come down to: What are the costs, who pays, and how long does it take to pay?”

Associations varied in their take on the situation, including:

The Los Angeles chapter of the California Apartment Association suggested that its smaller members may struggle to come up with the funding needed to pay for the changes. “Our concerns are not about the mandate; they really are about the ability to comply,” Executive Director Beverly Kenworthy told the Associated Press. “I don’t think you can assume people have access to the kind of capital this would require.”

The Apartment Association of Greater Los Angeles, meanwhile, suggested that potential rent increases linked to the upgrades could cause friction in the owner-tenant relationship. “It’s going to take some finesse to make sure it works for both sides, and we don’t want to drive that proverbial wedge between owner and tenant,” Executive Vice President Jim Clarke told the L.A. Times.

And in comments to The New York Times, Carol Schatz, president and CEO of the Central City Association of Los Angeles, said financial help from the city would be essential. “The most meaningful incentive is a low-interest or no-interest loan or a grant,” she told the Times. “That’s what probably would mean the most.”

Garcetti has suggested tax breaks as a solution, including a five-year exemption from the city’s business taxes for companies that move into newly retrofitted buildings. On top of this, the L.A. Times notes, he supports offering building owners easier access to business loans to help them pay for the necessary structural changes.

(iStock/Thinkstock)

Ernie Smith

By Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. MORE

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