Residential Structural Retrofit Program – A Collaborative Opportunity –

1. Residential Structural Retrofit Program – A Collaborative Opportunity – California Earthquake Authority July 2010

2. Challenge • California is home to 65% of the nation’s earthquake risk • The majority of Californians live within 20 miles of a major fault • USGS is forecasting a 99% chance for a major earthquake (M6.7) within next 30 years • About 1.5 million houses were built in California before 1960 when (some) jurisdictions began to require adequately braced walls and bolted foundations

3. Local efforts to-date... • Few jurisdictions have succeeded in positioning residential structural retrofit programs in their building departments • Building codes that cover residential structural retrofitting (where available) differ across active programs • Local programs are not positioned to succeed statewide

4. Solution • The CEA is a publicly managed, yet privately funded statewide organization that provides residential earthquake insurance and mitigation programs • By law, the CEA sets aside 5 percent of its annual investment income up to $5 million for mitigation • Total CEA funds available for statewide mitigation currently exceed $20 million • The high number of houses built before 1960, combined with the leveraged value of post-disaster benefits from each mitigation dollar, has led the CEA recently to tighten its focus on residential structural retrofitting

5. Hosting scoping sessions • Collected input in Sacramento (discussion facilitated by former FEMA Director James Lee Witt), Los Angeles and Oakland • Requested guidance in defining, advancing and sustaining a common sense approach to a first-ever statewide residential structural retrofitting program • Heard from structural engineers; building officials; residential retrofitting contractors; earth scientists; trade associations; as well as local, state and federal government officials

6. Scoping session input… • Provide financial incentives to help offset consumers’ structural retrofitting costs • Align programming with (local) building codes and standardized plan sets • Emphasize contractor training • Implement effective marketing to engage consumer participation • Be sustainable into the future

7. Incorporating State Hazard Mitigation Plan • CEA mitigation programming successfully incorporated into 2010 State Hazard Mitigation Plan (SHMP) • SHMP is official statement of state’s hazard identification, vulnerability analysis and hazard mitigation strategy • SHMP is the result of a collaborative, multi-agency planning process with multiple opportunities for public participation • CEA incorporation in the SHMP likely will qualify its residential structural retrofitting program for additional federal assistance funds

8. Adopting statewide building code • Without a statewide building code for residential structural retrofitting, just a few jurisdictions in California previously inspected and approved these projects • Statewide standardized plan set not feasible due to variations in regional requirements • CEA strategized with state departments / commissions to address challenges • CEA garnered a gubernatorial Finding of Emergency to fast-track adoption of first-ever California Building Code for residential structural retrofitting • California Department of Housing and Community Development is managing code-adoption process • California Seismic Safety Commission co-funded the code-adoption process • California Building Standards Commission will adopt code on August 16, 2010

9. Issuing industry partner RFQ • Seeking a program partner to co-administer financial incentives and contractor training; released RFQ July 1, 2010 • Future partner currently must: • Oversee and existing home-building constituency • Be savvy on related building codes • Operate within statewide infrastructure • Demonstrate awareness for residential structural retrofitting needs • Have experiences with consumer incentives and contractor training

10. Forming Joint Powers Authority • Working with the California Emergency Management Agency (CalEMA) to form a Joint Powers Authority (JPA) to oversee a “California Earthquake Loss Mitigation Authority” • JPA designed to manage residential structural retrofitting program and related activities • Creates legal entity separate from its members • Separates JPA’S debts, liabilities, obligations from members • Allows contracting with private-sector firms to do JPA’s work • Seeking CEA Governing Board approval on August 26, 2010

11. Delivering sustainable funding • Funding currently available ($20 million) would enable the CEA to offer ($1,000) financial incentives to seismically retrofit 20,000 of the approximately 1.5 million houses especially vulnerable to structural earthquake damage – reaching just over 1 percent of the houses built before sufficient (local) building codes were in place • The CEA’s $20 million pre-disaster investment to help finance the “bracing and bolting” of single-family houses (averaging $3,000 to $5,000 per house) will generate an estimated $60 million to $100 million in near-term economic activity • The CEA’s $20 million investment in pre-disaster dollars will leverage a minimum of $80 million in post-disaster benefits • Under existing law, the CEA Governing Board will continue to set aside up to $5 million of the CEA’s investment income annually – enough to structurally retrofit an additional 5,000 single-family houses

12. How the National Mitigation Collaborative Alliance can help • Guide the CEA’s mitigation programming results into a national repository • Vulnerable housing inventories • Residential building code challenges / opportunities • Educate the CEA about related programs • Consumer incentives and contractor training • Building inspectors • Federal assistance