What happens in Los Angeles often impacts surrounding communities. Specifically, the earthquake safety laws signed in October 2015 by Los Angeles Mayor Eric Garcetti are considered to be the toughest in the nation. It requires that the owners of an estimated 15,000 buildings most at risk of collapse during a major quake make the structures stronger.
The affected properties include non-ductile concrete buildings (not including detached single-family homes or duplexes built before 1977) and wood-frame apartment complexes built on top of carports. Property owners will have seven years to fix wood apartments and 25 years to fix concrete buildings under the new ordinance.
Considering Los Angeles sits in the heart of California earthquake country, the ordinance ends years of debate on whether Los Angeles should force building owners to retrofit structures that could fail. Other cities could follow in Los Angeles’ footsteps.
The two most dangerous types of buildings targeted in the ordinance are brittle concrete buildings and wood apartment complexes with weak (also referred to as soft) first stories. The issue is not only injury, loss of life and property, but the economic impact caused by the collapse of residential and commercial sectors that could take years or even decades to recover.
The retrofit program officially kicked off in mid-2016 when the city began a tiered mailing program with dates determined by the type of affected building. Landlords were given two years from the date of the order received to submit proof of a previous retrofit, proof that a retrofit is unnecessary or plans to either retrofit or demolish the structure. Building owners required to retrofit are running out of time.
With mandatory retrofitting, the required seismic upgrades will be costly. It is estimated that wood apartment retrofits would cost $60,000-$130,000, while taller concrete buildings could cost millions of dollars to strengthen.
Earle Wasserman, chairman of the board for Mission Valley Bancorp, is also a past president of the Apartment Association Greater Los Angeles. Through Wasserman’s leadership and industry insight, Mission Valley Bank has created financing programs that provide the necessary funds for property owners to get the job done.
Specialized lending makes it possible for qualified businesses to get the financing they need, often times with much more flexible terms than more conventional loan options. For all types of commercial financing – retrofitting, refinancing or new purchases – consult with a trusted advisor banking professional to determine next steps.
Marianne Cederlind is executive vice president and chief business banker of Mission Valley Bank. She can be reached at 818-394-2300.