By Stacy Nguyen
Northwest Asian Weekly
West Kong Yick building (Photo by Stacy Nguyen/NWAW)
On Jan. 12, 2010, a 7.0 moment magnitude earthquake struck approximately 16 miles west of Port-au-Prince. Following the first quake, more than 50 aftershocks measuring 4.5 or greater were recorded, three million people affected, and death toll estimates ranged from 100,000 to 220,000.
A point of comparison, the 8.8 magnitude quake that shook Chile in Feb. 27, 2010 resulted in a final death toll of 525 victims. The 9.0 magnitude Tohoku quake and tsunami that hit Japan the following year in March resulted in approximately 16,000 deaths.
In 2011, John Thomsen, a principal at engineering firm Simpson Gumpertz & Heger, which designs, investigates, and rehabilitates building structures in the United States and internationally — including those in Haiti — wrote in a “Seismic Zone” column that a significant contributing factor to the Haiti quake’s high death toll was the collapse or severe damage of 250,000 residential buildings and 30,000 commercial buildings. These buildings were unreinforced masonry buildings (URMs) — buildings that are not seismic-resistant.
Thomsen wrote that prior to the 2010 quake, seismic-resistant design and construction were nonexistent in Haiti. Materials and construction types were driven by cost, with concrete being most readily available. Confined masonry construction, as Thomsen called it, was widely prevalent in Haiti and, being relatively heavy and with little-to-no ductility (a solid material’s ability to deform under tensile stress) — “led to the widespread brittle, abrupt failures seen across Haiti during the earthquake,” wrote Thomsen.
Seattle’s CID
While it cannot compare to the size, scope, and infrastructure of Port-au-Prince, Seattle’s Chinatown–International District (CID) does bear some superficial resemblances. It’s a designated historic district that contains a disproportionate number of Seattle’s URMs, and it also houses a disproportionate number of low-income residents, primarily Chinese immigrants who live in the low-rent, single-occupancy rooms in these buildings.
The cost to retrofit these URMs — make them more earthquake-proof, to spare lives more than to preserve these structures — is high, depending on the height and footprint of a building, and often beyond reach or a low-priority financial cost for many property owners in the CID.
According to a not-yet-released report from the Seattle Chinatown International District Preservation & Development Authority (SCIDpda), “URM-RRIO Pilot Project Report,” the cost of retrofitting Pioneer Square and CID URMs range from $6/square feet to $130/square feet (seismic retrofit alone), “for a per-project total of $120,000 to more than $4 million.”
Many factors affect the total cost to retrofit to the base level that the City of Seattle is currently considering — the Bolts-Plus model. According to the SCIDpda report, a number of URMs in the CID would not even qualify for Bolts-Plus — they’d require costlier structural upgrades.
Building size and height are contributing factors in the cost of retrofitting.
According to the report, “Parcels in the Chinatown ID tend to be larger, with many occupying a quarter of a block, and buildings have correspondingly larger footprints. … Also, the likelihood of a building having other vertical or horizontal irregularities increases with building size and height. Addressing these irregularities adds to the complexity of the renovation efforts.”
“Actually our buildings, both of them, are pretty easy to retrofit,” said Faye Hong, a representative for the Hop Sing Association (formerly Hop Sing Tong) in Seattle, which owns a building on the 500 block of Maynard, which houses Honey Court Restaurant, and the Gom Hong on the 500 block of Seventh Avenue South (the site of the former China Gate Restaurant). “Not like these 100-room hotels where you have to redo plumbing and everything.”
Bernie Kay, a significant shareholder of the West Kong Yick building, a URM, does have a multi-story 100-room former hotel to contend with. “Level one [retrofitting] alone, we put in about $1.5 million so far, and I’m not even finished yet,” said Kay. “To go to level two, it could cost another $5 to $10 million dollars. We don’t know if [the City of Seattle is] going to require us to go to level two. We can barely afford level one. Level one allows for people to safely exit the building. But it doesn’t guarantee the building can be used again. It could still be condemned and get knocked down.”
Financing
“Many CID property owners are charging really affordable rent [for low-income residents]. They are providing this community a great service, but it doesn’t make the bank look at them as qualifying for and able to pay back a loan,” said Cara Bertron, Real Estate Lab Coordinator at IDEA Space, a program of SCIDpda. “So additional public incentives are needed.”
The SCIDpda report presents this worst-case scenario:
In the event that mandatory retrofitting is enacted and enforced by the City of Seattle, building owners in the CID, without clear understanding of policies and the availability of funding sources, may simply default to the easiest solution, which is to shut down and/or sell their buildings, resulting in the loss of affordable housing and commercial units and the displacement of many CID immigrant residents and small business owners — many of whom have resided in the district for decades.
Currently, the financial incentives for retrofitting — honestly really low return-on-investment endeavors — are relatively meager. According to “Seattle Unreinforced Masonry Retrofit Policy: Benefit Cost Analysis,” prepared by Gibson Economics and CollinsWoerman (updated April 2014), an analysis determined that “for every $100 spent by a building owner to retrofit a URM, the long-term benefit in avoided losses (in present value) is $3.30. When death and casualties are monetized using FEMA multipliers, the total benefits more than doubles, but is still only $7.60 for every $100 spent.”
This is why the City of Seattle is treading carefully. Bryan Stevens, spokesperson for the City of Seattle’s Department of Construction and Inspections, pointed out that the high cost of mandatory retrofitting in the State of California led to the demolition and loss of historic buildings in Los Angeles.
It is often the poorest areas that are hit the hardest with these policies. In August 2010, the City of San Bernardino became the largest U.S. city to file for Chapter 9 bankruptcy. San Bernardino also happens to have one of the largest concentration of URMs — as it lies next to the San Andreas and San Jacinto faults.
San Bernardino previously had a mandatory retrofitting law, according to reports from the Los Angeles Times, but it was rescinded in 1999. As of 2014, fewer than 12 percent of URMs have been retrofitted there.
Incentives
“A state property tax exemption for retrofitting URMs would be a very good new option,” said Bertron. “Seattle is not the only city in the state with URM buildings. And there’s already a proposed state property tax exemption for providing affordable housing.”
Bertron said that financial incentives for retrofitting will be very important. By lowering the financial burden on property owners, the city can retain the more hard-to-quantify benefits of retrofitting, including historic and cultural preservation, retention of affordable housing and local small businesses, and less displacement of vulnerable populations, in addition to increased public safety.
However, the SCIDpda report also points out that a sizeable incentive for retrofitting — low-income tax credits — may be out of reach to multi-party ownership, which is common in the CID.
“The dozens or hundreds of shareholders who own the building must be willing to legally transfer the vast majority of ownership to for-profit investor/partners in exchange for the tax credits,” the report states. “This is a complex and challenging idea in a culture that highly values property ownership, even if the transfer is time-limited (5 years for historic tax credits; 15 years for Low Income Housing Tax Credits). In addition, the required paperwork to set up the legal structure for the tax credit deal will likely be more complex due to the ownership structure.”
According to a 2006 City of Seattle, Department of Planning & Development report (“Little Saigon & Chinatown/International District, Impacts on Local Businesses from Proposed LU/Zoning Changes & Dearborn Street Mixed-Use Shopping Center”), which polled 220 business owners in the area, about 14 percent of business owners in the CID cannot speak English at all. Another 27 percent speak two or more languages — one of which is English — but the report does not go into detail the level of proficiency these owners are in English.
Property development is a complex endeavor that requires expertise out of scope or expertise for many current CID property owners, though the owners that participated in SCIDpda workshops have stated that they are interested and willing to consider all tools and incentives presented to them.
Among the financial incentives for retrofitting that SCIDpda’s report presents are:
- Funding for more extensive study and pilot project,
- Community Development Block Grant-Disaster Relief funds from the United States Department of
- Housing and Urban Development (HUD),
- Interest rate buy-down,
- More federal pressure around Community Reinvestment Act.
Next steps
Currently, a mandatory retrofitting policy through the City of Seattle is rounding out its information-gathering stage. Public input will probably be sought in the coming months.
“[SCIDpda wants to] help property owners anticipate the policy changes that might be coming, and help them feel comfortable that they are making informed decisions,” said Bertron. “These are big questions that can create big impacts on this neighborhood. We want to make sure that people don’t make decisions because they don’t know, because they are surprised, or they are panicked. We want to provide info and assistance and advice.”
“Local ownership is really important,” she added. “Property owners provide a great service to the neighborhood. When [owners] are committed to the health and wellbeing of the community — that’s something that takes decades to replicate.”
This is the last part in a three-part story. More information from the City of Seattle can be found at goo.gl/LfnRcN. Contact SCIDpda through scidpda.org. Go back to part one here.
Stacy Nguyen can be reached at stacy@nwasianweekly.com.