Lessons from Failing to Develop
a Stronger and Safer Built Environment

Second Edition

Aris Papadopoulos

Copyright ©2016 by Aris Papadopoulos
All rights reserved

Resilience Action Fund

eBook available through www.buildingresilient.com

ISBN 978-0-9861816-0-3

This publication is designed to provide authoritative information with regard to the subject matter covered. It is sold with the understanding that neither the author nor the distributor is engaged in rendering technical, legal or other professional service. If technical, legal or other expert assistance is required, the services of a competent professional person should be sought.

Second Edition
Published in USA

To my parents, Vassiliki and Dimitri,
who, though uneducated,
taught me everything important I know
in life!

Foreword to 2nd Edition:

About a year ago I self-published online this book’s first edi­tion. It was fast, cost-effective and allowed for ease in later correcting and updating a hardcopy second edition.

I was able to publish just before the UN’s 3rd Annual Conference on Dis­as­ter Reduction, held March 2015 in Sendai, Japan. That conference produced the Sendai Framework for Disaster Risk Reduction: 2015-2030 (SFDRR), a milestone agree­ment signed by 187 nations. It is a document on the level of im­portance of the 1992 UN Framework Convention on Climate Change, de­vel­oped at the Earth Summit in Rio de Janeiro. SFDRR will have major future ramifications on how govern­ments, business and societies strengthen resil­ience in the face of disaster hazards.

SFDRR still remains below the radar screen for the vast majority of government officials, businesspeople and the general public, with scant media coverage. Nonetheless it has unleashed a stream of activity that will raise its visibility in the coming decade.

One of these actions was integrating several private sec­tor initiatives of the UN Interna­tional Strategy for Disaster Reduction (UNISDR) under a single umbrella. This was launched Novem­ber 2015 in London, as the Alliance for Disaster Resilient Socie­ties (ARISE). I was elected to its 12-member board. With initial membership of over 100 private sector entities, it represents a geographic, size and multi-sectoral mix that in the coming years promises to grow and contribute to achieving the goals of SFDRR.

Metrics, awareness and disclo­sure, as well as public and private policies, programs and incentives will drive broader business engagement. These will catalyze the emergence and growth in resilience-related prod­ucts and services that forward-thinking businesses can capital­ize on.

On the other hand, much remains to be done in changing pub­lic, business and social habits and attitudes that inhibit and deter adopting resilient policies and behaviors, as well as addressing resilience opponents. Unless we identify, spotlight and address these barriers, pro­gress will be slow and difficult. This subject remains the primary purpose of this book. Thank you.

Aris Papadopoulos
January 2016

Personal Note:

In 2014 I retired as CEO of Titan America, a US construction materials company. 57 is not your typical retirement age. After 35 years in business, 20 as CEO, I felt the need to pursue my passion: advancing the globe toward a more disaster-resilient built environment. Over time, I had accumulated a breadth of experience and knowledge on the building industry, the condi­tions under which it operates and what makes it tick; prior work in Europe and the Middle East gave me additional perspectives.

My fire-in-the-belly was nurtured from personally surviving numerous disasters: two earthquakes (my paternal home of Greece), two hurricanes (my present home of Florida), an industrial fire, and the 9/11 World Trade Center.  After the last I realized the need to serve a deeper purpose – beyond running a business. Increasingly, I questioned why many building decisions were made the way they were, and after failures what could have prevented them. In the process I delved into the murky waters of codes.

Aiding me was my engineering (MIT) and business (Harvard) back­ground. This was not simply a technical matter but a socio-economic one. I dived into the rising wave of sustainability but discovered that it was missing one essential element: Resilience.

Never a prior fan of the United Nations, in 2010 I met Margareta Walhstrom, head of the UN’s resilience initiative – the UN International Strategy for Disaster Reduction (UNISDR). We shared common interests and she invited me to join a group of business leaders; the UN’s effort to engage the business community impressed me. In 2011, this evolved into the Private Sector Advisory Group (PSAG) of the UNISDR. I served as its first chair until 2013 and have remained active ever since.

This book is my first attempt to document my life’s observations and thinking on the subject. I do not consider it a scholarly writing. If it does not meet academic standards, it was never meant to. Its purpose is to stimulate critical thinking and discussion, which will lead to action.

I am sure that many will differ and disagree with me or defend the status quo. I invite them. There will be no progress unless we challenge what we do and seek to improve on it.

I do not aim to profit from this writing. Any and all proceeds are as­signed to Resilience Action Fund, a non-profit organization I started. All my life I was on the receiving end of activism. Now having graduated from corporate life I can finally be an activist myself.

Only God is perfect. Therefore, I acknowledge the opportunity to correct, update and improve future editions. Your feedback and suggestions to this effect are most welcome and invaluable.

Thank you for the honor of your attention!

Aris Papadopoulos                                                                                                                       February 2015


I wish to acknowledge the following people and companies for their assistance, advice and support (listed alphabetically):

  • Carl Schneider of Schneider Insurance and Smart Homes America
  • Debbra Johnson of Debbra A.K. Johnson, LLC
  • Fred Krimgold of Virginia Tech
  • Holly Tachovsky of Buildfax and her staff, including Sefton Patton
  • Jeremy Gregory of MIT and his students Reed Miller and Arash Noshadravan
  • Julie Rochman of IBHS and her staff, including Tim Reinhold and Siavash Farvardin
  • Leslie Chapman Henderson of FLASH and her staff, including Sarah Chason and Audrey Rierson
  • Margareta Walhstrom of UNISDR and her staff, including Andrew Maskry and Kiki Lawal
  • Naresh Raheja, of RMS
  • Rowan Douglas of Willis Re and his staff and associates, including Greg Low and Sophie Abraham
  • Steve Szoke of PCA
  • Thomas Loster of Munich Re Foundation and his associates, including Alexander Allman

In addition I wish to thank my daughters Angelina and Eliza for their perspectives from a younger generation, Florian Barth for his years of encouragement, Dimitri Papalexopoulos for helping me move to the next phase of my life and finally all my friends at UNISDR for sharing the passion and vision of a more hazard-resilient world.

I accept full responsibility for any errors and omissions. The opinions expressed in this book are mine and should not be viewed as representing those of any parties herein referenced or acknowledged.

Thank you all!


In the new millennium, sustainable development (also known as “sustainability”) became a popular topic among many policy, business and academic circles. What it means depends on whom you talk to and what they are advancing.

In 1987, the United Nations World Commission on Environment and Development published a report titled “Our Common Future”. Known as the Brundtland Report (named after the commission’s chair, former Norwegian Prime Minister Gro Harlem Brundtland) it offered this succinct definition:

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

The report contains the word “environment” over 600 times, “government” around 300 times, and “risk” 108 times. “Disaster” is refer­enced 24 times. Yet there is no mention of “resilient” and only a single happen­stance of the word “resilience”. Overall the report was written by government for government, to sound an alarm on the rising risks from failing to act and collaborate on the environment.

Five years later the Earth Summit in Rio de Janeiro put forward the UN Framework Convention on Climate Change. Since then, sustainability evolved into a very active ‘green movement’. This took many forms and faces…from conservation, to resource efficiency, to global warming, to climate change, to biodiversity; its overarching theme being the relationship of humans with nature. In essence the green movement focused on “protecting nature from humans”.

However where in sustainability do we address ‘protecting humans from nature’? Is this not a fundamental need of both present and future genera­tions? Perhaps the green movement implies that if we succeed in pro­tect­ing nature, somehow nature will reciprocate and automatically protect us.

Certainly treating nature well is better than treating it poorly, but is no guarantee of being protected. Nature acts predictably and unpredictably in both benevolent and malevolent ways. While modern-day humans exert greater influence than our predecessors, natural forces still hold the upper hand.

The point is: while being good to nature is important, it is not enough.  To be sustainable we must also effectively protect humans from both nature and themselves. Therein lies the essence of resilience.

The green movement spurred a drive towards ‘green development’ and ‘green investment’. But what if these investments are not resilient? Is de­stroying a green asset not a double loss?

There is no greater blow to sustainability than destruction. It is failure, independent of the lost asset’s green qualities. Therefore being resilient is an essential prerequisite for being ‘sustainably’ green.

A successful ‘sustainability movement’ requires concurrent successful green and resilience movements. Without resilience, green is a mirage of sus­tainability. In that sense, green and resilient are two sides of the same coin.  This book’s subject is precisely the other side of the sustainability coin.

What is resilience?  The UNISDR defines it as:

The ability of a system, community or society exposed to hazards to re­sist, absorb, accommodate and recover from the effects of a hazard in a timely and efficient manner, which includes preserving and restoring essential basic structures and functions.

This provides for many scopes and perspectives of resilience: from nar­row, such as the resilience of an aircraft part; to broad, such as how well peo­ple within society co-exist with each other. Resilience can refer to something material and non-organic like a bridge or a building wall, or organic and liv­ing like a plant or a human body. These have similarities but also differences.

This book focuses on resilience of material/non-organic systems. Living/ organic systems differ, in that they possess particular capa­bilities not found in non-living systems, like adaptability and evolution. So­cial and ecological systems behave similar to the living/organic world. Since most literature on resilience focuses on concepts related these latter types, not making the distinction often creates confusion when we refer to resilience in the material/non-living systems. Obviously the material/non-organic world af­fects the organic/social one and vice versa.

Resilience is a system attribute rather than a disjointed collection of re­silient parts. In reality systems are nested within systems. A window is a part within a building system, a structure is part of an urban system, and a city is part of a socioeconomic system.

At any level a non-organic system’s resilience can be characterized by three sequential properties: Resistance, Redundancy and Contingency:

  • Resistance: primary ability to resist and withstand hazards (shocks and stresses)
  • Redundancy: redundant parts, if critical elements of the system fail
  • Contingency: an emergency plan, in case a significant portion of the sys­tem fails

The first two I call ‘Resilience Capacity’ and the third ‘Emer­gen­cy Capacity’. The objective is for Resilience Capacity to perform the job 99.9% of the time. When Emergency Capacity is called to action it’s already a failure. In fact the lower a system’s Resilience Capacity, the more Emergency Capacity it needs. Unfortunately for reasons that we will explore, public focus and resources are disproportionately directed toward Emergency Ca­pacity.

This book focuses on resilience of the built environment for three rea­sons:

  1. The built environment is humanity’s front line of protective defense (i.e. shock-absorber) against most natural hazards; the human ‘cocoon’ as we later call it
  2. The built environment is already humankind’s largest investment and over the next half century is expected to grow significantly larger, driven by increased global population and urbanization
  3. During the recent half-century failures in the built environment have been escalating at an alarming rate

Finally the built environment is the author’s primary area of experience and knowledge. More specifically we will focus on lessons learned in the United States (US). Though you may consider this limiting, it will prove to be very useful.

Over the past century the US made the world’s largest investment in de­veloping its built environment, as the country grew and prospered.  However today this investment suffers one of the highest failure rates. This makes the US an excellent case study for the developing world, which is planning an unprecedented period of economic growth.

In doing so I aim to demystify and shed light on the processes by which the built environment is created in a language that hopefully everyone can un­derstand.

So lets begin!

Table of Contents


Foreward to 2nd Edition

Personal Note






  1. From One Disaster to Another: Superpower Vulnerability
  1. Cocoon We Live In: Our Built Environment
  1. Concentrating Risk: A Tale of Too Many Eggs
  1. Urbanization: The Urge to Concentrate
  1. Not the Oscars: Disaster Vulnerability Ratings
  1. Paradise Lost: The Road to Non-Resilience
  1. Urban Fires: Burning Our Fingers Repeatedly
  1. Risk Stimulus: US Flood Insurance Takes in Water
  1. Solution or Problem: Building Codes
  1. Choices We Should Make: What To Save and What Not
  1. Trojan Horse of Disasters: Affordability Abused
  1. A Disastrous Tug-of-War: The Battle for Resilience



  1. Weak and Cheap: The Business of Non-Resilience
  1. When Disaster Strikes: Knock on Wood
  1. World’s Wood Powerhouse: Canada Cries Timber
  1. False Sense of Security: A Culture for Disaster
  1. Off the Rocky Road: Making Cars Resilient
  1. Pioneer Who Saw the Light: Story of John Freeman
  1. Predicting the Unpredictable: Limits of Sharing Our Problems
  1. Investing or Gambling: Brief History of Insurance
  1. Color Blind: Fifty Shades of Green
  1. Built Environment Makeover: From Repetition to Resilience
  1. Gone With the Wind: Disaster Reruns
  1. Ground We Shake On: Pro-action Over Inaction



  1. Liquid Rock: Harnessing Nature’s Strength
  1. Acts of God or Man: Enforcing Accountability
  1. Collateral Damage: When Government and Resilience Collide
  1. Private Action: Balancing Principles With Profit
  1. Disaster Cures: Lessons For Resilient Living





Resilience Action Fund


PART I: Before the Storm

If you’re going to have a disaster,
my advice is: have a big one!

Former US government official
speaking before a 2015 conference

Chapter 1

From One Disaster to Another: Superpower Vulnerability

Three major disasters mark recent US history:

  1. August 1992: Hurricane Andrew, a category 5 storm, hits the urban coast of south Florida with 150-175 mph winds and a 17-ft. storm water surge. It continues on to Louisiana, and in its wake leaves 65 people dead, a quarter million homeless, and 1.4 million without power. 600,000 homes/ buildings are destroyed/damaged. 43 million cubic yards of debris are created. Damages amount to $26.5 billion (1992 dollars). The local insurance industry does not survive. The state of Florida (i.e. its taxpayers) steps in to fill the void. In its aftermath, building codes are strengthened and enforced setting some of the highest standards for hurricane resilience in the world.
  1. August 2005: 13 years later, Hurricane Katrina, a category 4 storm, hits the urban coast of Louisiana and neighboring states with 120-145 mph winds and a 20-30-ft. storm surge. It is followed within weeks by hurricanes Rita and Wilma. In their wake, 1,836 people die, 300,000 homes/buildings are destroyed/damaged, 120 million cubic yards of debris is generated, and dam­ages amount to $108 billion (2005 dollars). The US federal government (i.e. taxpayers) steps in to pay the bills.  Building codes are upgraded along coastal communities, but not consistently.
  1. October 2012: 7 years later, Hurricane Sandy (a category 1) hits the dense New York/New Jersey metro areas with 80-100 mph winds and a 14-ft. storm surge. 286 die, 300,000 homes/buildings are destroyed/damaged, and 8.5 million people are without power. Sandy creates 20 million cubic yards of debris and inflicts $68 billion (2013 dollars) in damages. Again the fed­eral government steps up to foot the bill. Again building codes are up­graded.

In total these three events killed 2,187 people, destroyed/damaged 1.2 million homes/buildings, cost $250 billion (2014 dollars) and created 180 million cubic yards of debris. This cost does not include indirect economic losses (productivity, revenue, health etc.). The debris alone would fill a land­fill the size of 3,000 football fields 4 stories deep.

The alarming note is that all this destruction occurred over a mere fifth of a century in just the eastern quarter of US and from only one hazard type.  The built environment failed on a scale that it shouldn’t have. Its Resilience Capacity proved low. The panic button was pushed repeatedly only to reveal that Emergency Capacity also was lacking.

According to the US Federal Emergency Management Agency (FEMA, part of the Department of Homeland Security), during the last four decades the total number of major disaster declarations has more than doubled.

2005-2014  631
1995-2004 529
1985-1994 314

A number of factors lie behind this escalation, but it is clear that the US has become more disaster-prone. If the most built and economically de­vel­oped nation is so vulnerable, how worried should the rest of the world be?

The UN estimates that the average annual global cost of disasters has reached $300 billion and is growing. Only about a quarter of this amount is ac­tu­ally insured. This figure exceeds the GDP of 80% of the world’s econo­mies. If converted to a tax on annual global GDP growth, it would equal 12%.

The three events mentioned earlier only form the most visible tip of the US ‘disaster iceberg’. If we review tornados, the conclusion is similar.  Exam­ine floods, same story. Investing made the US a ‘superpower’, but when it comes to that investment’s resilience to natural hazards the US appears to have ‘built’ itself into a vulnerable corner.

Its relative exposure can be seen in this ten-year review (2000-09) by Global Humanitarian Assistance, which lists the ten countries with popula­tions most impacted by natural disasters:

1. China1,321 million people impacted
2. India602
3. Bangladesh73
4. Philippines53
5. Thailand44
6. Pakistan33
7. Ethiopia29
8. Vietnam22
9. US21
10. S. Africa15

The above represents 90% of the global populations affected by disasters during this period. The US is the only developed country to make the list. In terms of population impacted specifically by flood disasters, the US ranked fifth in the world and again was the only developed country.

However the record is even more severe when the same countries are ranked by the economic cost of disasters. The US is #1.

1. US353 billion US dollars
2. China206
3. India26
4. Pakistan17
5. Ethiopia9
6. Bangladesh6
7. Vietnam6
8. Philippines3
9. Thailand2
10. S. Africa1

These represented 61% of total global disaster losses. US losses exceed­ed the sum of the remaining nine countries combined. Of course US invest­ment and wealth intensity is higher. You would expect that level of investment would come with a higher level of lasting quality. Unfortunately much of it is not.

This magnitude of disaster losses might appear affordable to Americans (while public debt mounts), but would definitely be unbearable for the rest of the world. Such development is clearly unsustainable. While the US may not serve as the role model for resilient development, it may better form an exam­ple of how not to develop. Non-resilient development is very costly. It also wastes valuable natural resources and burdens the environ­ment with enor­mous disaster debris. So far, the green movement appears to have missed this.

The purpose here is not to ‘beat-up’ on the US, but rather to learn from its experience and avoid repeating its mistakes. What can nations (and the US) do differently to make their development more resilient to destruc­tion (i.e. invest in Resilience Capacity)? The answer requires analyzing the root causes of vulnerability. We will therefore explore the US development model with an eye on extracting these lessons.

Chapter 2

Cocoon We Live In:
Our Built Environment

Economic development is the product of investment in both capital assets and human capabilities. An asset is something used over a pe­riod of time. While knowledge is probably the most important form of human capability, the largest category of asset investment is the built environ­ment. It consists of all land alterations, public and private buildings and infrastructure including the ‘soft-structure’ that enables it to function. Most of this invest­ment has and will continue to be directed toward urbanization.

A primary purpose of the built environment is to provide shelter— pro­tecting people, possessions and activities from natural elements and human factors. The built environment is the de facto front-line of protective defense against natural hazards. When it fails, all within are exposed to damage or de­struction.

We spend almost all our lives either in or around the built environment.  One study showed that on average people spend 70% of their lives inside homes, 20% in other buildings and 5% inside transportation. Only 5% of our time is outdoors, and even then we are rarely far from something built. The built environment is truly the ‘cocoon’ within which we live. While we don’t realize it and mostly take it for granted, the safety and enhancement of our persons, possessions and activities all depend on the resilience of this cocoon.

From the moment prehistoric humans shifted from natural to man-made shelter investing in the built environment has never ceased. Most has been destroyed and replaced multiple times. Throughout history natural haz­ards and wars were the primary reasons for premature failure; while wear and functional obsolescence the main drivers of mature or planned destruction.

By one estimate the global building stock amounted to about 140 million square meters in 2013. While the US represented less than 5% of global pop­ulation, it had about 20% of the world’s building stock. This underscores the magnitude of US investment in the built environment compared to the rest of the world.

By 2023 the global building stock is expected to grow by 24% to over 170 million square meters. According to UK-based EC Harris, this investment will be more heavily weighed towards the developing world:

S. Africa15%

Obviously, much investment is concentrated in the BRIC countries.  However even with its already significant base, the US will continue to invest heavily. It is adding new stock at a rate of 1.8% per year, renovating existing stock at the same rate, while demolishing at 0.6% annually. At that pace within 25 years 75% of its built environment will either be new or renovated. That represents a tremendous opportunity to improve Resilience Capac­ity. On the contrary, failure will sink it deeper into the vulnerability hole.

Over 70% of the US built environment is residential.  Over 75% of that is single-family housing.  Finally over 90% of single-family homes are con­structed of wood.  As we will later discuss, this segment represents almost half of the US built environment and is its greatest vulnera­bility.

AIR Worldwide, a company that models risk, estimates the value of US residential and commercial built investments to be around $65 trillion. Of this, $28 trillion—almost 45%—sits in 18 hurricane-exposed states along the At­lantic Ocean and Gulf of Mexico. Over a third of that value is located in the very vulnerable coastal counties of those states. Those having the greatest to­tal investment and coastal (in parenthesis) exposure are:

1. New York$4.7($2.9) trillion
2. Texas$4.6($1.2)
3. Florida$3.6($2.9)
4. New Jersey$2.1($0.7)
5. Georgia$1.9($0.1)
6. N. Carolina$1.8($0.2)
7. Virginia$1.8($0.2)
8. Massachusetts$1.6($0.8)
9. Maryland$1.3
10. Alabama$0.9($0.1)
11. Connecticut$0.9($0.6)
12. S. Carolina$0.8($0.2)
13. Louisiana$0.8($0.3)
14. Mississippi$0.5($0.1)

The northeastern US represents the highest concentration—almost 60% —of total coastal exposure. If a high percent of the existing ‘cocoon’ is low in Resilience Capacity, such risk should be of enormous concern to policy­mak­ers and the public.

However public discussion has generally focused on the symptoms rather than the underlying causes of this vulnerability. Action has mostly been towards increasing Emergency Capacity rather than raising Resilience Capacity; add­ing more life jackets when we should be upgrading the ship. That is exactly the focus of our discussion.

Chapter 3 –

Concentrating Risk:
Tale of Too Many Eggs

Before we explore the US model in more detail it would help to better un­derstand certain basics regarding risk.

Thanks to our built-in ‘fight-or-flight’ survival instinct we more easily perceive and react to immediate risk and danger. This may explain why we so quickly react with emergency response and recovery tactics when threatened by hazards.

However we are less able to comprehend, judge and plan for risks that occur over longer time periods, particularly low probability—high impact dangers. Perceptions of compounded, conditional and joint-risk probabilities are not intuitive. Which is why we are so often baffled when disaster strikes.  We then seek simple explanations often relying on whatever is popular and at the time fashionable.

Is today’s almost knee-jerk tendency to attribute most disasters to climate change a symptom of this phenomenon? This is not implied to diminish the potential impact that climate change may have on the frequency and magni­tude of certain natural hazards, though most of that impact remains ahead of us. However reacting so may prevent us from appreciating the more signif­icant driver of rising disaster vulnerability in recent history: urbanization.

Most people qualitatively appreciate the notion that putting too many eggs in one basket is more risky, without necessarily being able to quantify it. Let’s per­form a few mental exercises to understand this better.

Assume we have 30 eggs. We also have 100 baskets. Baskets come in one of 3 colors: green, yellow and red. 40 are green, 30 are yellow and 30 are red. Imagine these randomly arranged on the floor in a 10 x 10 grid.

Every hour there is a chance that a large rock will fall into each basket.  A rock falling into one basket does not affect the chance of another rock fall­ing in any others (they are independent events).

What differentiates each basket color is the probability of a rock falling into it:

Green:   1% probability (average once in 100 hours)

Yellow: 2% probability (average once in 50 hours)

Red:       4% probability (average once in 25 hours)

We can tolerate breaking a few eggs once in a while. ‘Disaster’ is de­fined as an event when 10 or more eggs are destroyed during any given hour.  We can replace the destroyed eggs at the beginning of each hour but the cost of eggs is constantly going up (plus cleanup charges). We can also place up to 5 eggs in any one basket before having to re-engineer the basket.

Question: How do we distribute our eggs so as to minimize the chance of a disaster event? 

The answer is simple and for most people intuitive: place each egg sepa­rately in a green basket (there are plenty).

If we do the calculations, the probability of a disaster event is 1 in 4 tril­lion! This is extremely low risk (MIT engineers helped with the math).

If we next move all our eggs to separate yellow baskets, the probability of disaster increases by a factor of 850 (i.e. 850 times more likely) to 1 in 5 billion.  A large increase but still very low risk.

Finally, if we move our eggs separately into the red baskets, the probabil­ity of disaster increases by a factor of 600,000 (over the green) to 1 in 7 mil­lion. A huge increase but still a relatively low risk.

What is important to observe is how drastically the probability of disaster increases as we move into higher risk baskets (it grows exponentially).

Now, let’s assume that our eggs take on a life of their own. For reasons we will later discuss they no longer wish to sit alone in their baskets. Let’s say 5 eggs decide to share a single green basket while the rest remain in their orig­inal (green) baskets. Is this a big deal in terms of disaster risk?

The answer: very much so; and the result is quite astounding. By merely moving 5 of our 30 eggs into a single green basket the probability of disaster increases by a factor of 200,000. The chance of a disaster becomes one in 22 million. Even though we still occupy only the ‘safer’ green baskets, this risk lies somewhere between having all our eggs individually in single yellow and red baskets.

That aggregating a few eggs into a low risk basket can be as risky as placing them individually in higher risk baskets is intuitively surprising.

If a second five-egg basket is later created, the probability of disaster in­creases dramatically to 1 in 100. This is over 200,000 times riskier than the single 5-egg basket. It is almost 70,000 times worse than placing individual eggs in the highest risk red baskets.

How does this all relate to our earlier discussion? Consider the following analogy:

  • Each egg represents a unit of human presence and developmental in­vestment
  • Each basket represents a certain geographic unit
  • Each falling rock represents a hazard (or combination of hazards) occur­ring in a specific geographic unit
  • Each geographic unit has a low, medium, or high risk, based on haz­ards affecting it
  • Each hour represents a year
  • Each disaster is an event that exceeds a certain threshold of human and asset loss
  • Urbanization is the act of concentrating human presence and devel­op­ment investment in particular geographic units

Our exercise first revealed the change in disaster risk when moving human presence and investment to geographic units with greater haz­ards. Then we saw what happens when we begin to ‘urbanize’ that investment.

The first was generally expected but perhaps not so strongly. I’ll name it:

First Law of Disaster Risk’

Disaster risk grows exponentially with hazard risk

This nonlinear relationship between hazards and disasters is not some­thing we perceive at the micro or individual level.  However it happens at the macro level and thus should concern governments. Disaster is a macro phe­nom­enon.

The bigger revelation is how dramatically disaster risk increases by simply urbanizing. This can be described as the ‘Eggs-in-Basket Principle”, which we’ll call the:

Second Law of Disaster Risk’

Disaster risk grows exponentially with urban density, even when hazard risk remains constant

The Second Law has major implications on how we think about disas­ters. It implies that urbanization is a primary root cause behind the rise in disaster risk of recent human history. Its affect far overshadows that caused by any measured or perceived increase in hazards—natural or man-made.

The question then becomes: what can be done to offset this increase in disaster risk?

The answer is: increasing the Resilience Capacity of our baskets. To re­duce the risk of a ‘rock’ breaking our ‘urban eggs’ we need to make these ‘ur­ban baskets’ more resilient and create baskets that are stronger and more re­silient to hazards. That means building fire-, wind-, and flood-resistant bas­kets to protect our eggs (with redundancy).

The built environment is our ‘basket’. It should be obvious that if invest­ments in urbanized (or -izing) areas apply the same standards and methods as those in rural/less dense ones, the results can be disastrous.

A major flaw in the history of human urbanization lies exactly there. Ur­banization more or less came about by copying and pasting the standards and practices used in less-urban environments, just making them denser.

Example: a simple wooden house in the low-density countryside may have low Resilience Capacity, but as we saw in our exercise the chance of a ‘dis­aster’ is miniscule. The particular house may still be destroyed by fire, wind or flooding, but if the next house is a quarter mile away it probably won’t lead to a disaster. Other neighbors in the general area will likely pitch in to help the unfortunate one.

Now place that structure in an urban setting, build it taller and denser, and the result—sooner or later—will be a disaster. It’s exactly how cities of the 18th and 19th century initially formed. That is until they finally burned down and were rebuilt with greater Resilience Capacity.

Unfortunately much of this century’s unplanned urbanization in the de­vel­oping world is occurring in a similar way. Often the reality is worse: the standards used in unplanned urban development are even lower than those used in less dense areas. This compounds the risk even more. We’ll later dis­cuss why people tend to become less risk-sensitive when placed in urban sur­roundings.

Which invites me to postulate the ‘Stronger Basket Principle’, that we will call the:

Third Law of Disaster Risk’

Disaster risk is inversely proportional to Resilience Capacity

In order to manage the level of disaster risk, the more we ur­banize the more we need to raise Resilience Capacity—even when the hazards remain constant. Since urbanization drives disaster risk exponentially it fol­lows that Resilience Capacity also needs to grow exponentially. Otherwise we increase the risk of disasters.

This means stronger building codes and practices providing greater re­sistance and redundancy to hazards. Unfortunately other than a few cities that learned from their disasters, building codes rarely proactively recognize or correlate with urban density. The issue is subtler since density is a moving target. Do we establish resilience requirements for an area based on today’s density or that projected 30 years from now? If for a rapidly urbanizing area we use today’s density, in several decades that same investment will be low in Resilience Capacity and therefore exposed to higher disaster risk.

In addition due to rising land scarcity, over time urbanization tends to spread to locations of higher risk (i.e. expanding into neighboring yellow and even red baskets). This includes flood-prone coastal and river areas and less-stable ground locations (such as liquefaction risk lands). When we compound that on top of density, disaster risk profile escalates even further. Therefore we need to increase Resilience Capacity exponentially just to offset and keep risk leveled.

Without getting mathematically complex let’s assume that disaster risk increases with hazard risk and urbanization…raised to the second power.  Lets also assume that both hazard risk and urban density each increase by 50%. In order to just keep disaster risk constant, Resilience Capacity will need to be five times higher (1.5 x 1.5 both raised to the second power).  We’re going to need more Resilience Capacity than we ever imagined.

Emergency Capacity also needs to grow, but simply investing in more ‘bandages and life jackets’ will never solve the underlying problem. It will just make it more costly.

Which leads to the final resilience principle, termed the:

Fourth Law of Disaster Risk’

Emergency Capacity required is inversely proportional to Resilience Capacity

This has implications on how governments and societies expend their limited resources to address disaster risk. The more they invest in Resilience Capacity, the less they have to invest in Emergency Capacity and vice versa.

As we will later analyze, US building codes in particular represent a haphazard political collage with little consistency or correlation to either den­sity, urbanization, or actual hazards. Even worse, they are based on historic, rather than present (and definitely not future) hazard levels.

For decades Resilience Capacity has been kept at minimal levels with little investment in adding capacity. This level cannot cope with present day hazards and densities, much less those coming down the road. Instead, a large investment has and continues to be made in Emergency Capacity, which fails to address the underlying root causes.

As a result the multi-trillion dollar investment the US made in its built environment is and will increasingly be vulnerable to disasters. It has started to become a drain on the country’s economic and environmental re­sources. The most worrisome part is that to an enormous degree the root causes continue in full force, to the ignorance of most policymakers and the general public.

Chapter 4

Urbanization: The Urge to Concentrate

The first towns and cities formed thousands of years ago. However ur­banization on a global scale is a relatively recent phenomenon that accel­erated during the past century.

The urge to urbanize is propelled by several social and economic drivers. In his book ‘Triumph of the City’, Edward Glaeser explains that cities make us richer, smarter, happier, and healthier. There is little doubt that many city dwellers are not exactly that, though most aspire to be. If most choose to remain it suggests they perceive that rural alternatives provide worse rather than better chances of improvement. There are exceptions such as many Athenians returning to villages during the recent Greek crisis.

Many state-sponsored economic and welfare programs have encouraged urbanization by steering a disproportionate share of largess towards cities in the form of jobs, services, benefits, etc. Others, like China, have tried to reg­ulate and control urban migration.

In some ways the appeal of cities resembles that of lotteries; people dream their ticket could be the next lucky winner. However upside oppor­tunity also comes with downsides. One of these, even though governments are reluctant to admit, is that urban areas are more vulnerable to disasters … un­less they have invested in raising Resilience Capacity.

Definitions of urbanization vary by country, with more densely popu­lated nations setting a higher threshold. Large urban areas typically agglom­er­ate multiple city jurisdictions. Most countries set a density threshold of 400 people/km2. However, for Australia it is 200/km2, whereas Japan uses 4000/km2. The US defines an urban area as a census block with over 1000 people having a density over 400/km2 and surrounded by blocks with density over 200/km2. The UN tries to harmonize these varying definitions in its global statistics.

Densities of the world’s largest urban areas typically average around 5000/km2. The 2014 report by Demographia shows for the world’s 100 most populous urban areas that 20 had densities over 10,000/km2 of which 5 ex­ceeded 20,000/km2. These were all in Asia: Dhaka, Bangladesh (44,000), Mumbai (32,300), Hong Kong (25,700), Karachi (22,800) and Surat, India (21,000).

The global 100 in terms of population also included 12 US metropolitan areas. However their densities are among the worlds lowest; all were below 2,500/km2. More than any other country the US has followed an urban sprawl model of development. The following table lists the densities of these US cit­ies ranked by total population.

1. New York1,800 people per km2
2. Los Angeles2,400
3. Chicago1,300
4. Dallas1,200
5. San Francisco2,100
6. Miami1,800
7. Houston1,200
8. Philadelphia1,100
9. Atlanta700
10. Washington, DC1,400
11. Boston800
12. Phoenix1,300

This development model causes US urban areas to be the most land-in­tensive in the world. For example, Tokyo has twice New York’s population but occupies a 30% smaller land footprint. London has half the people on a landmass is less than 1/6th that of New York’s.

This raises interesting questions regarding the relationship between urban landmass size and disaster risk. Urban settlements historically began on the safest landmasses and from there spread to whatever land became available, often by (literally) moving mountains, rivers, wetlands, and coastlines. Even though the 2rd Law favors lower densities, two considerations work against re­silience:

  1. The greater the appetite for land, the more likely development will spread onto higher risk sites. Staying resilient requires an ever-higher investment in erecting and maintaining protective infra­structure.
  2. A lower-density developmental model means a higher percent of sin­gle-family residences. As we will later discuss, this tends to be the most hazard-vulnerable building segment.

As a result the benefit of lower density is lost. The fact that the US suf­fers from greater disaster impacts (compared to other developed economies with higher urban densities, such as in Europe) only shows how much lower its Resilience Capacity is. The 3rd Law dominates (Disaster risk is inversely proportional to Resilience Capacity).

The challenge is not simply today’s densities, but what they will be in the future. When cities run out of land they resort to building higher and denser.  Whether this improves or worsens disaster risk depends on how quickly and proactively they apply the ‘3rd Law’. If they mostly invest in Emergency Ca­pacity and wait for the next disaster wake-up call, they will eventually run into trouble.

Overall the entire world is on a one-way race towards global urbani­za­tion. By 1900 only 15% of world population was urban. Half a century later (1950) it doubled to 30%. By 2007, another half century later, this crossed the 50% mark. By 2050 it is estimated to exceed 70%. Europe, the America’s and Oceania are already there.

While these percentages sound large, they actually understate the sheer magnitude of human concentration underway. By incorporating population growth the absolute numbers are staggering:

1900   0.25 billion people in urban areas

1950   0.75 billion

2007   3.3 billion

2050   7.0 billion

The rate of urban concentration was 10-fold over a century (1900-2000 and 1950-2050). Our ‘eggs’ are concentrating in fewer ‘baskets’ at tremen­dous speed. This full-throttle urbanization movement is changing the global dis­as­ter risk profile significantly.

The question is: are the baskets becoming resilient fast enough? Unfor­tu­nately the answer is no. Most are already at a low Resilience Capacity even for sustaining today’s densities, much less tomorrows’.

In 2014 twenty-nine urban centers around the world had populations over 10 million earning the title ‘Megacity’. Ten of these had over 20 million and have been termed ‘Metacities’. Two are over 30 million, Tokyo and Jakarta. By 2030 the number of Megacities could reach 50, of which half may be Metacities. While the biggest get even bigger, about half the world’s urban residents still live in cities with populations below half a million.

A consequence of this speed of urbanization is that both the number and severity of disasters we stand to experience will continue trending upwards. In addition to more disasters as we presently know them, the probability of expe­riencing future ‘mega-disasters’ is increasing (which in our exercise might be defined as the loss of 20+ eggs).

That this has not yet become a primary global priority presents a serious blind spot for humanity. Between disaster events the signals easily get lost in the daily ‘noise’. Are we becoming numbed into accepting the current level of disasters as ‘business-as-usual’?  If yes we will be ill-prepared to face the fu­ture ‘mega-disasters’ that could be coming at us just over the horizon.

Certainly, other hazards still plague many parts of the world: disease, war, terrorism, malnutrition, abuse and pollution. Today many needs compete for attention and resources. Threats and priorities are often difficult to discern.  On the other hand, the world has made considerable strides in making green­house gases and energy footprint a global priority. In this regard I pose the following challenge:

How do we leverage our determination on climate change to form a pathway for raising Resilience Capacity and reducing the disaster risks posed by global urbanization?

It can be done if we consciously refocus. But we may need to update some of our thinking. That is to view greater resilience as a primary pathway towards a greener and more sustainable future. Resilience is a critical and central part of the solution. Instead of something that we mostly cannot af­ford—as detractors tend to claim—resilience is what we cannot afford to live without. Our choices and actions will have far reaching human, economic and environmental consequences.

The time to act on raising Resilience Capacity is NOW!

Chapter 5

Not the Oscars: Disaster Vulnerability Rankings

Hazards are everywhere (if you include fire). However some areas are more vulnerable due to higher hazard occurrence frequency and/or inten­sity compared to Resilience Capacity for the level of urban density. Although there is no widely accepted vulnerability metric we will explore a few indic­ative rankings.

A recent list of urban centers ranked by magnitude of hazard exposure and population at-risk are:

1. Tokyoearthquake, typhoon, tsunami
2. Manilaearthquake, typhoon, flood
3. Pearl River Deltatyphoon, tsunami, flood
4. Osaka-Kobeearthquake, typhoon, tsunami
5. Jakartaearthquake, typhoon, flood
6. Nagoyaearthquake, typhoon, tsunami
7. Kolkataflood, tsunami
8. Shanghaiflood, typhoon
9. Los Angelesearthquake, tsunami, fire
10. Tehranearthquake

In the US, FEMA provides statistics of major disaster declaration fre­quency by state since 1953.  The 10 highest were:

1. Texas88
2. California80
3. Oklahoma75
4. New York70
5. Florida67
6. Louisiana60
7. Alabama58
8. Arkansas58
9. Kentucky57
10. Missouri56

About half are in the hurricane-exposed Gulf and Atlantic coasts. You would assume that these states have all gone the extra mile to enhance their Resilience Capacity but you will be disappointed. As we will later un­cover many lack or only recently adopted statewide building codes, use outdated versions or have no mandatory enforcement, especially when it comes to homes.

Below is a 2014 rating by Kiplinger of the 10 states most at-risk from disaster (based on 2006-13 property losses)

  1. New Jersey
  2. Texas
  3. Tennessee
  4. Missouri
  5. Alabama
  6. Oklahoma
  7. Mississippi
  8. Louisiana
  9. Colorado
  10. Arizona

Half of these were also on FEMA’s ranking.

In 2012 the Insurance Institute for Business and Home Safety (IBHS), an insurance-funded testing and research organization, evaluated 18 US Gulf and Atlantic Coastal states. IBHS scores were based on the adoption and strength of statewide building code standards, enforcement, and contractor licensing programs (higher means better). As we will later discuss the US lacks federal building codes for hazards and relies on local authorities.

In 2013 IBHS checked back to see which states were improving versus deteriorating in their practices. Shown below are scores for the larger states, marking (x) if they appeared on one or both of the prior disaster rankings:

1. Florida95ImprovingX
2. Virginia95Improving
3. New Jersey93X
4. Massachusetts87
5. South Carolina84Improving
6. Connecticut81Improving
7. North Carolina81Worsening
8. Louisiana73WorseningXX
9. Maryland73Improving
10. Georgia66Improving
11. New York60ImprovingX
12. Alabama18ImprovingXX
13. Texas17XX
14. Mississippi4X

Note that most of the states in the bottom half of the codes list also ranked poorly on disaster rankings. It suggests that disaster perfor­mance and building codes are related.

Note that Florida appears to have learned its lessons from Hurricane An­drew and put in place the system and resources to strengthen its Resilience Capacity. On the other hand, Louisiana (with neighbors Texas and Missis­sippi) has failed to learn from Katrina. In fact Louisiana (along with North Carolina) appeared to be heading in the wrong direction. Unfortunately absent a fed­eral mandate, only another disaster will mobilize the state to change its course.

One also begins to see the inherent fragmentation and inconsistency of the whole US building code ‘system’. More to follow.

Chapter 6

Paradise Lost: Road to Non-Resilience

Resilience Capacity appears to be a critical weakness of US built environment. This investment is failing to withstand natural hazards at an alarming rate. Why?

A list of all possible reasons:

  1. Errors in design
  2. Errors in construction
  3. Unplanned changes in use
  4. Inadequate maintenance
  5. Over-aged structures
  6. Hazard levels that have increased over time
  7. Hazard design assumptions that understate actual hazards

If it were a less developed country reasons 1-4 might deserve further ex­ploration. While there remains room for improvement, the US does rela­tively well on these. Therefore we focus on reasons 5-7.

Reason 5: Even though we saw in Chapter 2 that the US is investing in renewing and renovating its mostly private built environment, the public side does suffer from a growing percent of aged and poorly maintained infra­structure. Having been one of the first economies to invest heav­ily, it is also one of the first to age. There is a growing list of bridges, roads, tun­nels, and water management facilities whose reconstruction is past due. Demands of social and military programs have limited available resources to modernize fast enough; even the 2009 Stimulus Program failed to make much impact. As a result the US can expect to keep falling further behind as the list of aging infrastructure grows faster than the rate of facility renewal.

This links to the failure of under-designed and ill-maintained water lev­ees during Katrina, which caused devastating flooding in large parts of New Orle­ans. However it did not appear to have been a significant cause in either An­drew or Sandy. Therefore we consider it important but not the primary root cause.

Reason 6:  Climate change is blamed for many hazards. While we should not disre­gard the connection between warmer waters and storm formation, hurricanes, tornadoes and other hazards did not suddenly appear or gain inten­sity in this part of the world. In the years from 1900 until Hurricane Andrew 18 devas­tating hurricanes hit the eastern US, killing nearly 19,000 people. Between Hurricanes Andrew and Katrina, another 13 severe hurri­canes struck. There­fore we will not rest by attributing the root cause of vulnerability to increased hazard levels.

This leaves Reason 7: Understating the actual level of hazards in design assumptions. How can this be? In a developed country designers do not uni­lat­erally set their hazard levels. They follow prescribed building codes.

Are building codes themselves the underlying weakness of US devel­opment? The country has an enormous resource of technical and research ex­per­tise, hundreds of professional, business and governmental organizations, and a plethora of private and public forums. How can it be that this ‘system’ is unable to deliver a ‘resilient’ result? Unfortunately the record shows that to a large degree it has failed in this regard.

Post-disaster revisions consistently demonstrate the inadequacy of appli­cable codes. Even when updates are made at one location, they are not adopted at hundreds of others that are also in harm’s way. Weak building codes in turn mean low Resilience Capacity.

There is generally little discussion and even less understanding of the ‘Laws of Disaster Risk’ in the scientific and engineering community; much less so among policymakers and the public. The focus is predominately on symptoms rather than causes, and on response rather than prevention.

So what are the underlying reasons that US building codes are kept low and generally fail to perform against natural hazards?  It is a question we will investigate this in considerable depth.

Chapter 7

Urban Fires: Burning Fingers Repeatedly

Fires have been a primary hazard in the long history of urban devel­op­ment. Below is a sample record of major urban fires (year, AD):

Rome64, 847
Constantinople406, 532, 1204
London1135, 1212, 1666, 1694
Lisbon1755, 1988
New York1776, 1835, 1842
Hong Kong1878
San Francisco1906
Tokyo1923, 1945
Los Angeles1961

Let’s detail history’s three most memorable urban fires: Rome, London and Chicago.


By the time of Christ, Rome was the world’s largest urban center with about a million inhabitants. For centuries Roman law prescribed standards for minimum building setbacks and heights. However as urbanization picked-up and politics dominated Roman life, these were largely ignored. Construction became denser with buildings abutted one another. Wood was the cheapest material and wooden structures rose up to nine stories to accommodate the swelling population. As a partial remedy Emperor Augustus limited building heights to 7 stories and 70 feet.

However Resilience Capacity was in serious decline. Then in 64 AD the city went up in flames. Seventy percent of it burned down. Of Rome’s 14 districts, 10 were destroyed, 3 completely and 7 largely. From its ashes a more resilient Rome was re-built with wider streets, water infra­struc­ture and stone buildings. Its Resilience Capacity was raised to a high level. Destruction debris filled nearby wetlands expanding the city’s limits. In the centuries that followed, Rome flourished as the urban epicenter of west­ern civilization.


It took eighteen centuries for another million-occupant city (perhaps out­side China) to emerge. In the 1800’s London’s population mush­roomed from below a million to over 6 million in the merely a century. Throughout the western world the industrial revolution fueled the first wave of rapid ur­banization, creating over a dozen cities with populations over a million. The more interesting story is how London came to achieving its preeminent urban status.

By the mid-17th century the Middle Age city of London already concen­trated a half-million occupants. Like early Rome it was mostly the product of unplanned growth with a proliferation of densely packed wooden buildings. Its Resil­i­ence Capacity was rapidly declining.

Like Rome it eventually burned to the ground. The great fire of 1666 de­stroyed 80% of the city. Like Rome from its ashes a more resilient London was rebuilt with wider streets, water infrastructure, and brick and stone buildings. An unexpected side benefit was the extermination of rodents whose plague-infested fleas in the prior two years had killed almost 70,000 people.

Parliament passed the ‘Rebuilding of London Act of 1666’ to raise Re­silience Capacity. This set prescriptive rules for the rebuilding of London in­cluding the width of streets, infrastructure and the materials, height and di­mensions of buildings.

Its specifications stated that building with brick is not only more comely and durable, but also more safe against future perils of fire. Only door cases, window-frames and shop fronts were allowed to use hard oak wood. To help finance this massive reconstruction the city levied a duty of one schilling per ton of coal.

With stronger building codes in place, London’s growth accelerated on a solid footing during the 18th century. By the end of the 19th century it was the world’s largest and probably most resilient city. As a side note these same codes helped contain the destruction that London suffered during the World War II bombings.

Health and fires were the greatest challenges facing urban centers during the 18th and 19th centuries. However the problem was that few cities took proactive initiatives by learning from each other. As the record shows one by one each lived through its own great fire, paying the price for its low Resil­ience Ca­pacity. Each city followed disaster by adopting more resilient codes.


The third most quoted urban fire occurred in Chicago almost two centu­ries after London. By 1870 Chicago’s population exceeded 300,000.  It was the forth largest and among the fastest-growing US cities. Chicago however was another city built of wood. Not only were its buildings wooden, but also its streets, sidewalks and bridges. It would eventually pay the price for its low Resilience Capacity.

In the Great Chicago Fire of 1871 a third of the city totaling 2,000 acres and 18,000 buildings were destroyed. Three hundred lost their lives and 100,000 were left homeless. The cost of destruction reached $190 million, which would be $4 billion in 2014 dollars.

Like London new codes were adopted requiring buildings to be con­structed of brick and stone with clay roof tiles. Streets were widened and re­configured into a grid system. The water system was expanded to reduce reli­ance on fire water-trucks. Fire escapes became standard in all designs.

In the reconstruction steel made its early appearance. In 1884 the world’s first skyscraper—the 10-story Home Insurance Building—forever changed urban landscapes.

Most of the disaster debris went to fill a lakeshore area north of the city, which became and to this day operates as the free Lincoln Park Zoo.

In raising Resilience Capacity on stronger codes Chicago propelled its growth. Less than twenty years later its population reached a million and it ranked the second largest US city.

An overall pattern emerges from these three cities:

  1. Initial rapid urbanization occurs haphazardly and opportunistically, ig­noring lessons learned elsewhere, with pressure to maintain the status quo.
  2. Left unregulated and unaccountable, builders apply low cost, conven­ient and non-resilient construction solutions.
  3. Development practices that appear innocuous in less-dense settings be­come highly risky when applied in denser urban concentrations.
  4. Resilience Capacity drops to low levels until finally disaster provides a rude wake-up call.
  5. Following disaster, building codes and practices are strengthened to raise Resilience Capacity.
  6. Even though greater Resilience Capacity requires higher initial invest­ment compared to prior practices, it stimulates growth and leads to a pe­riod of sustained economic and social prosperity.

Let’s remember this pattern as we later discuss other hazards. I call it the ‘Urban Destruction-Resilience Cycle’.

So have we learned our lessons regarding Resilience Capacity with re­spect to fires?  For cities in the US and most parts of the world large-scale ur­ban fire destruction is a thing of the past.

Insurance data from 1993-2012 indicates that only 1.6% of economic losses from catastrophes were caused by fire. Catastrophes however are de­fined as events whose losses exceed $25 million. Unfortunately below the ra­dar screen the problem persists. We may be no longer sinking ‘Titanics’ but year-after-year we sink an enormous number of small ships. As we will later see the US burns the equivalent of a 1 million-occupant city (like an Austin, Texas or San Jose, California) every year.

The non-profit National Fire Protection Association (NFPA) is con­sid­ered the leading international authority on fire prevention and protection.  It was founded by insurance companies in 1896, a quarter of a century after Chicago’s disaster. Its initial mission was to develop standards for applying water sprinkler fire suppression in buildings.

More than a century later NFPA has grown into an organization with over 70,000 members from nearly 100 countries. Its membership has ex­pand­ed beyond the insurance to include government, firefighting pro­fessionals, engineers, businesspeople, academics, trade unions and public in­terest groups. Its scope has grown to encompass electrical, fuel and boiler standards.

NFPA’s current mission is to reduce the worldwide burden of fire and other hazards on the quality of life by providing and advocating consensus codes and standards, research, training and education. 

NFPA has more than 250 technical committees engaging about 6,000 volunteers. It develops, publishes and disseminates more that 300 consensus codes and standards. They are developed and updated every 3-5 years in an open consensus procedure involving public input and a final appeals process. These are not mandatory until formally adopted by authorities and busi­nesses. However they are referenced directly in the building codes of most US and many international regulatory jurisdictions.

NFPA can certainly be credited with improving building fire prevention and containment over the decades, but should it have done more by now?  The consensus process is glacial, tedious and ultimately involves many com­pro­mises. Certainly it is not a system to task with fast-tracking something urgent and critical. When it comes to hazard resilience it can be viewed as a process of ‘disaster consensus’, a near term and uneasy détente of technical, public and business interests. But let’s examine the record to illuminate this.

NPFA’s own fire statistics show that over the past 35 years (1977-2013) US building fires dropped in half, from about a million a year to half a mil­lion. However, almost all this improvement occurred during the first half of this time period. Very little progress has been made since the mid-1990s.

In round numbers during the last decade about 500,000 structural fires occur annually, taking 3,000 lives and costing a $10 billion per year. In other words every year, year-after-year a World Trade Center scale disaster occurs in the US. Yet it never gets much headline media or causes anyone in Washington to declare a ‘war on fire’.

500,000 buildings is about the size of a one million-occupant city. The most fire-vulnerable building segment and the one suffering the greatest losses is housing. One and two family homes make up about 50% of the US built environment, but account for 60% percent of the fires and economic losses.

High-rise residential represents 20% of the built environment. It accounts for 20% of fires, but only 10% of the economic losses. Thus average fire losses are 2.5 times higher in low-rise houses compared to apartments of same size.

NFPA itself admits that the fire risks and losses are lower in high-rise (7 stories plus) compared to low-rise buildings of the same use. The rea­sons presented are the greater use of fire protection systems and non-combus­tible construction materials. However after 1998 NFPA discontinued pre­senting its information by construction material type. Why such im­portant data was dropped remains unexplained and is a point of concern.

Cooking causes 60% of fires, while heating 15%. Compared to apart­ments, one and two-story houses contain a higher percent of combus­tible building materials and are 10 times less likely to have sprinkler systems. As a result fires are 60% more likely to spread to other rooms and eventually the entire structure.

90+% of these homes are built of wood. The same wood that burned down Rome, London, Chicago and thousands of other cities throughout history. Hence it appears the US has not completely learned its history lesson.

NFPA’s founding mission was to promote the installation of water sprin­kler systems. Almost 120 years later 99% percent of wooden homes still lack sprinklers. Notwithstanding the fact that studies show the death rate in homes with sprinklers to be 83% lower than homes without them, and prop­erty dam­age to be 69% lower.

NFPA estimates that the median cost for a sprinkler system to be $5,000 (2013); less than 3% of the average construction cost of a 2,300 square foot wooden house. Yet the consensus-driven code process does not yet re­quire them for one- to two-story homes, while mandating them in most multi-story buildings.

So has NFPA done enough? The answer is clearly no. We will later dis­cuss which forces systematically obstruct the code process from getting there.

Recently this has begun to turn in an even worse direction. In the name of ‘green’ construction there are current efforts to build taller and denser wood structures in urban areas. If permitted this will worsen US Resilience Ca­pacity with disastrous consequences.

In 2011 NPFA estimated the total annual direct and indirect cost of US fires to be around $300 billion or 2% of GDP. This is as high as the UN’s es­timate to annual global disaster losses ($25+ million events), which in­cluded the US.

$120 billion of this consists of human, property, and economic losses in­cluding insurance charges. The remaining $180 billion is the full cost of Emergency Capacity. In contrast only about $30 billion is invested annually in Resilience Capacity to make buildings less vulnerable to fires.

The US spends six times more on fire Emergency Capacity than it invests in Resilience Capacity. This represents a significant imbalance and hits at the heart of the problem (remember the ‘4th Law’). With its Resilience Capacity persistently stuck in low it has little choice.

FEMA reports that every $1 invested in Resilience Capacity saves $4 in hazard-related costs. Therefore if the US simply doubled its annual Resili­ence Capacity investment it could potentially reduce its annual economic im­pact by 40%. A portion of this would be less spending on Emer­gency Capac­ity.

Why is such investment not occurring? Well it is occurring in the indus­trial, commercial, and institutional building segments. It is not occurring in the largest and most vulnerable building segment, which is residential. The reason consistently provided by defenders of the status quo is that ‘we cannot afford it’. It appears they have succeeded in brainwashing us (including the consensus code developers) into agreeing.

Just to appreciate how large fire Emergency Capacity in the US actually is (2013):

  • 1 million firefighters (career & volunteer)
  • 30,000 fire departments
  • 55,000 fire stations
  • 145,000 fire trucks

Put in perspective, active US military personnel number less than 1.4 million. Actually the US is fighting a ‘war on fire’ but we never realized it.  From the record it does not appear to be a war that it is winning.

Granted, firefighters do more than just fight fires. They respond to a wide range of hazard emergencies. They even provide emergency medical services; however, their main purpose is fires.

70% of firefighters are volunteers, 98% of which are in communities less than 50,000 in population. In fact 73% of volunteers are in communities smaller than 5,000. About 60% of career firefighters are in communities large than 50,000 people. Since 1986 the number of career firefighters increased by 50%, whereas the number of volunteers stayed level.

It is a profession that makes tremendous sacrifices and lives under con­stant stress. If only we could make the built environment they strive to protect less vulnerable.

Chapter 8

Risk Stimulus: US Flood Insurance Takes In Water

Many ancient and medieval urban centers developed away from the coast: Babylon, Memphis (Egypt), Persepolis, Athens, Peking, Rome, London, Kyoto, Delhi and Paris. Perhaps Alexandria and Constantinople be­ing notable exceptions. The reasons were to protect themselves from both surprise military attacks by water and from coastal flooding.

In older times people simply built on stable high ground (as opposed to ground that might erode). This was the time-proven defense against flooding.  But higher ground is usually surrounded by lower ground. As towns and cities grew larger, they needed more land. High ground became scarcer.

It therefore became increasingly enticing to take risk and build on lower ground. Some of it was filled-in. Some was made more secure by changing and controlling water flow patterns, generally known as water management.  Most was built with just the hope that nothing bad will happen soon. This be­came the general rule in coastal and riverside development.

However in modern history the great majority of urban built environment investment has been coastal: New York, Boston, Washington (DC), Miami, New Orleans, Los Angeles, San Francisco, Rio de Janeiro, Buenos Aires, Hong Kong, Mumbai, Singapore, Sydney, Cape Town.

Today an estimated 40% of the world’s population lives within 100 km of the coast. Approximately 600 million people (10% of the global popula­tion) live below the 10-meter elevation line, even though these areas make up only 2.2% of the global land mass. 200 million live below the 5-meter eleva­tion. This is expected to reach half a billion people during the 21st century.

Almost 60% of the US population lives in 772 counties on the shores of the Atlantic, Pacific, Gulf of Mexico and Great Lakes. Between 1970 and 2010 the percent of people living in coastal counties grew by 40%. By 2025 it is forecast to reach 75%. Coastal county densities are six times greater than average inland densities. The densest US coastal corridor is from Washing­ton to Boston.

Today half of the world’s 50 largest metropolitan areas are coastal. The degree of coastal urbanization in the US is even higher. Of its 12 largest metro areas, 75% are coastal. This exposes its built environment even greater haz­ards.

The world is not simply experiencing global urbanization. It is experi­enc­ing rapid coastal urbanization (coastalization). This compounds both ur­ban and coastal risks, worsening disaster vulnerability far more than we per­ceive. Both the ‘1st and 2nd Laws’ come into play; two exponential risk drivers working against us simultaneously.

Of course coastal areas exposed to storm surges and tsunamis are not the only ones vulnerable to flooding. Most inland cities were been built along riv­ers. These face rain and river flood risks. Cities combining both coastal and river risks may be the most exposed.

Below is a ten-year 2000-09 summary of countries ranked by population affected by flood disasters:

China525.6 million people affected

Again, the US was the only developed country to make the list. This highlights its high urban exposure to coastal/river areas. It also suggests that its development has failed to adequately account for flood vulnerability.

The US government’s actions in this regard form a case study on how public policy can often drive behavior in the opposite direction from that de­sired: increasing risky investment rather than reduce it. Let’s examine.

Prior to 1950, private flood insurance was bundled with and priced as a standard part of homeowners’ coverage. However acceleration of US coasta­li­zation, combined with stagnation in zoning and building codes caused flood-related claims and losses to escalate. To address this spiking liability insurance compa­nies began taking flood insurance out of standard policies and pricing them as optional. As flood claims continued to rise in the 1960s and regulators op­posed higher premiums, many insurers dropped the flood option entirely. This left homeowners self-insured and often unable to pay for flood losses. They pressured the government for help.

Instead of addressing the root cause of the problem, i.e. poor land plan­ning and weak building codes, the government jumped into the insurance business itself; in 1968 Congress created the National Flood Insur­ance Pro­gram (NFIP). It essentially enabled homeowners to buy insurance from the government and is currently managed by FEMA.

By 2010 about 5.5 million homes were insured under NFIP with Texas and Florida being the largest states. By design and practice it was destined to financially fail. By 2013 NFIP (i.e. tax­payers) had accumulated net losses of $24 billion over and above all premi­ums collected.

The flaws in NFIP are multiple:

  1. By being optional, or required by mortgage financers only in designated flood-risk areas, the insurance pool it created has little risk diversification (similar to just insuring all sick people).
  2. It is generally risk ignorant at the building level. Whether a building is flood-resilient or not, owners pay the same rate as long as the structure conformed to code when built. The local county is required to meet certain criteria but these have not been strictly and consistently applied. With weak and inconsistent local codes and very little information on the actual buildings, NFIP is blind re­garding the under­lying risks it is insuring. It also provides no incentive for owners to invest in above-code flood-resilience or push to strengthen codes.
  3. Too many buildings were grandfathered-in with low premiums for too long. As a result about 20% of policyholders pay less than half the cost of a fully priced policy.
  4. Under the political pressure of ‘affordability’ NFIP systematically un­derestimated and underpriced risk.

In other words, what was and should have remained a business turned into a govern­ment social program where money was headed in one general direction—out; while risk was headed in another general direction—up.

Finally in 2012 Congress passed a law (Biggert-Waters Act) aiming to correct this program. It called for premiums to be raised over a planned period to reflect the true cost of flood risk based on loss history. However intense lobbying by special interest groups, including the National Association of Home Builders (NAHB) resulted in a follow-up 2014 bill, which placed a hold on the start dates for these changes. The bill was appropriately labeled ‘Homeowners Flood Insur­ance Affordability Act’.

We will begin to track how often the word ‘affordability’ comes up when defending non-resilient practices and greater risk taking—call it subsidized risk taking. The government does not (outright) subsidize betting chips so that people can afford to gamble in Las Vegas. However for almost half a cen­tury—through NFIP—the government has subsidized non-resilient develop­ment in flood-prone areas at the expense of its own taxpayers and national disaster vulnerability.

Who benefits? Flood area developers, investors, land/property owners, builders and suppliers of non-resilient product suppliers. As many of the above systematically opposed stronger codes and land ordinances, very little has been done to control development or construct more resiliently in flood-prone areas. The ultimate owner-occupants benefit only par­tially, as they must bear the human and consequential costs of disas­ters.

Who pays in the end? Everyone. Initial private gains for a few become future public and private costs for all. Flaws in governance lead to gaps in building codes and land-use plans. Land/property speculators and special interests pressure officials to look the other way while development occurs. Often self-serving science is introduced to justify these actions.

Private insurance sector was an early detector of unman­ageable flood risk and headed for the door. When public insurance steps-in, as it did in the US, it tends to underprice risk and make the situation even worse by stimulating greater risk-taking. Private insurance’s exit or reluctance to enter should provide a clear warning to government of structural problems in need of structural solutions (i.e. raising Resilience Capacity).

Building on water-vulnerable land is more costly than we previ­ously assumed. It’s a case of pay now or pay much more later; the future price to society being many times higher. Without good governance and leader­ship people generally gravitate to pay later, hoping that ‘later’ will exclude them.

Those who benefit from passing future costs on to others actively lobby to influence policy. Instead of working on structural solutions to sustain private insurance, the tendency is to villainize insurers as trying to overcharge consumers. Only later when governments themselves have paid a hefty price, do some wake-up to the reality.

It does not help that science and accurate data on water hazards have been lagging. During the 1940’s the US Geological Service (USGS) developed the first comprehensive topographical maps for the US. In the 1960’s NFIP used these maps, plus historical flood data to develop the first flood risk contour maps. It arbitrarily selected the 100-year recurrence interval for NFIP insur­ance purposes and used this for contouring risk areas.

Over the following decades it became increasingly apparent how problematic this whole system would become:

  1. USGS’s maps proved to be inaccurate for vertical elevation purposes. Vertical contour intervals of 10 and often 20 feet led to +/- 5 and 10 foot inac­curacies that would make it very difficult to assess flood risk.
  2. The historic data used to develop the 1940’s maps was already three or more decades old. They would not be updated to reflect the extensive de­vel­opment in the decades to follow, which in many areas drastically altered the landscape. Nor did they reflect recent actual flood data.
  3. The base flooding elevations in many states already had a 1-foot inaccu­racy built into them.
  4. A 100-year recurrence interval actually means a 1% probability of flooding each and every year, not a regular event occurrence every 100 years. Most people (including most policymakers) never realized that this translates to a 26% percent chance of flooding in a 30-year period. For development in­side this contour the chance of flooding could be 26-100%. Outside it could be 0-26%. All this assumes accurate maps, which they are not.
  5. Determining what is 1% risk is in itself a risky business, especially if you lack centuries of historic data to process. Even then it assumes the past is a reliable predictor of the future, which we now realize it is not.

In fact 30% of NFIP claims have come from ‘safer’ properties outside the 100-year risk contours. This is probably a low figure in terms of total losses, as most buildings outside the contour don’t even carry flood insurance.

With all this plus weak building codes, no wonder private insurers mostly opted-out of flood insurance. The government (i.e. taxpayers) was left holding the (leaky) bag.

Only after Hurricane Sandy did the US begin in earnest to update flood maps to a more accurate digitized form, using both recent topographical data and flood records. This ongoing multi-decade program has upset the prop­erty world as many more locations are now being officially labeled ‘high risk”

Many owners and occupants are getting the bad news compared to what they previously assumed. Insurance requirements and pre­mi­ums are gradually going up. There is fear that property values will drop. Finally many public and private water defenses are now being called-out as inadequate.

Securing the built environment from water-related hazards, whether coastal or inland, requires investing in Resilience Capacity. This can come in several forms:

  1. Inland water management such as dams, channels, and surge ponds to control the inland water flow
  2. Coastal investments, such as seawalls, levees, and berms to protect lowlands from storm surges
  3. Land erosion control to maintain the stability of land from water
  4. Elevated construction allowing water to freely flow below or through buildings

The first two fall into the public infrastructure category. The third can be public or private. The forth depends on whether the building or structure is public or private. Usually a combination of these measures is needed to secure the built environment in flood-exposed lands.

None of this is rocket science. Most of these practices have been applied and perfected over centuries. The Dutch, most of who live under the water level are considered the masters at water hazard adaptation. There really is no excuse for ignorance; but that is not the problem.

The problem is that water hazards are more difficult to manage than fire. Water management, defenses, and elevation are much costlier. If you thought that investing in fire sprinklers was expensive, wait until you see the bill for flood protection. There is another important difference. Unlike fires, in flooding there is no equivalent Emergency Capacity to invest in. No ‘flood fighter’ service shows-up in minutes at your door to vacuum the water in and around your property. You’re in nature’s hands and mercy until the water subsides.

Water hazard is not simply about water itself. Objects and debris mobilized by flowing water (cars, trees, boats, building sections) can pro­duce even greater hazards and cause both structures and protec­tive measures to fail.

During Katrina an unmanned barge taken over by the storm surge crashed into the levee that was the only defense between the seawater and the lowland neighborhoods behind it. It is believed that it triggered the levee failure. Therefore elevating buildings and erecting water defenses it is not enough. These have to be strong enough to withstand the destructive impact of waterborne missiles.

Failures happen when development investment underestimates the mag­nitude of hazards. Building on risky lands while taking the cheap route and underinvesting in resilience, or just ignoring (knowingly or unknowingly) risks is a formula for disasters. When future bills arrive the price to pay is huge. Over the past century the US invested trillions in a water-vulner­able non-resilient built environment. Those bills have begun to arrive and will continue for many decades to come.

In the repetition of ‘Urban Disaster-Resilience Cycles’ water resilient so­lutions will also require restoring natural water defenses such as marshes, dunes, wetlands, reefs etc. Our ability to provide engineering hard infrastruc­ture for water-resilience has limits. Some of the land we took will be returned to Nature, because holding on to it will become too expensive. The sooner we realize it the better. Many towns and cities will have to retreat, pro­actively and post-disaster to higher ground further inland. Safe land near ur­ban centers will become scarcer and therefore more valuable. Using it effi­ciently is essential. In that sense the land wasteful model of urban sin­gle-family sprawl is nearing its end, especially in hazard-prone areas.

More than any prior natural disaster the damage and paralysis caused by Sandy woke-up and shook the US political and economic establishment.  Hit­ting closer to home than other catastrophes it signaled that the threat was more imminent and serious than previously perceived. This galva­nized the Federal government into a more active stance and as we will later discuss placed the US Department of Homeland Security in the lead political role of reversing the decline of the country’s Resilience Capacity.

Chapter 9

Solution or Problem: Story of Building Codes

Building codes are a direct product and necessity of human urbanization. In the late Bronze Age the fertile valley of Mesopotamia was a hotbed of ur­ba­n­ization. At its center Babylon would become the largest city of its time with a population reaching 65,000. When Hammurabi ascended to power in 1792 BC he faced the challenge of managing this urban growth. In his fa­mous Code he incorporated the first known elements of a building code in six articles 228-233. The two most important of these read:

Code 229:  If a builder builds a house for a man and the house he builds falls and causes the death of its owner, that builder shall be put to death.

Code 232/3:  If a builder builds a house for a man and the house falls, that builder shall rebuild the house at his own expense.

Today these would be labeled performance rather than prescriptive codes. Hammurabi was not interested in detailing to builders how to erect re­silient structures in his growing cities; he just wanted them to know the con­sequences of not performing.

Likely Hammurabi had observed that builders left on their own were failing in this regard. Probably they had not yet become a politically in­fluential group. Do you think that his Code motivated them to go above and beyond in assuring the resilience of their constructs?  My opinion it was quite effective.

We will later remind ourselves of Hammurabi’s underlying principle: that codes should create accountability for those profiting from building activ­ity rather than forming a legal shield for allowing substandard performance.

In Chapter 7 we reviewed a major disaster in the urban lifecycle of three major cities: Rome, London, and Chicago. We concluded by asking why so many cities seem destined to repeat the same Urban Disaster-Resilience Cycle of vulnerable growth, disaster loss and finally reemergence and prosperity with greater Resilience Capacity.

Breaking from this cycle requires absorbing and acting on lessons learned from the history of urban development. Unfortunately we are too accustomed in believing that each city is unique and different from others. Although geographic, cultural, and historic differences exist, when it comes to the built environment the underlying similarities are actually much greater than we as­sume.

Before we analyze this further let’s examine where build­ing codes are today and how we got here. In modern history code develop­ment took a prescriptive rather than performance-based approach. Over many decades, especially in the US, considerable engineering, political, and busi­ness re­sources and effort went to create the codes we have.

How well have these performed in protecting building owners and occu­pants against hazards? The answer is mixed. As documented by the record of US disasters these codes have failed to deliver the Resilience Capac­ity we need. Imagine Hammurabi shaking his tablets and demanding perfor­mance.

Based on its political evolution the US never legislated national building codes. Instead code adoption and enforcement was left to and re­mains in the hands of local authorities—primarily the counties and munic­i­palities that make up its 50 states. In total there are 3,144 counties ranging in population from 100 to 10,000,000 people and in size from 12 to 89,000 square miles; there are also about 20,000 municipal governments.

In the absence of national codes, establishing consistency within such a fragmented system is next to impossible. To partly fill the void most (but not all) of the 50 states legislated minimum statewide building codes that counties and municipalities must follow, but sometimes can exceed above or below.

Guiding the states, counties, and municipalities are ‘model building codes’ developed over time. They are periodically updated by in­de­pendent code development organizations. Today the primary code organi­zation is the non-profit International Code Council (ICC). Although its name suggests something international, it is really a US organization whose 50,000 members are themselves organizations representing public code officials as well as public and private safety and building professionals. Certain countries refer­ence ICC’s codes in their national codes, including Mexico, Haiti, Ja­maica, Abu Dhabi, Honduras, and Georgia.

ICC’s stated mission is to provide the highest quality codes, standards, products and services for all concerned with the safety and performance of the built environment.

ICC came into existence relatively late in US history. It was formed in 1994 by merging three preceding code development organizations to enable greater uniformity in code development.  These were the:

  1. Building Officials and Code Administration (BOCA), started in 1915 with primary presence in the Northeastern US. Its codes were called the Na­tional Building Code.
  2. International Conference of Building Officials (ICBO), started in 1927 with primary presence in the Central and Western US. Its codes were called Uniform Building Codes.
  3. Southern Building Code Congress International (SBCCI), started in 1940 with primary presence in the Southern US. Its codes were called Stand­ard Building Codes.

As you can imagine it took awhile to reach agreement on a single com­bined set of model codes. ICC’s first codes were published in 1997, but they contained many flaws and points of disagreement. It was not until the 2000 edition that the combined code was generally accepted and the preceding or­ganizations ceased to publish individual variations.

A rift has traditionally existed between building officials and fire offi­cials. Initially NFPA attempted to join ICC. However after years of disa­gree­ment over code language, format and governance, NFPA decided in 2000 to go its own way. ICC essentially was left under the control of building offi­cials. NFPA teamed up with the International Society of Plumbing and Me­chanical Officials, the American Society of Heating, Refrigeration and Air-Conditioning Engineers and the Western Fire Chiefs Association to de­velop a competing set of model codes.

In 2002 it published the NFPA 5000 Building Construction and Safety Code. The American National Standards Institute (ANSI) accredited it (ICC was not). This put state authorities in a difficult position regarding which model code to adopt: ICC or NFPA? California was the first major state to select NFPA. The battle had begun—essentially it was fire officials versus building officials.

Big industry trade associations took sides. NAHB, the American Institute of Architects, the Associated General Contractors and the Building Owners and Managers Association International all sided with ICC. Why?

Many believe that NFPA’s code requirements are stricter (thus more costly) and that ICC is easier to influence; fire officials are generally tougher than building officials. Also NFPA has a clear preference for non-combustible products and materials (i.e. they don’t like cheap wood). After considerable pressure and lobbying California dropped NFPA 5000. Since then ICC has been the dominant model building code developer.

Model code approval involves an elaborate voting procedure where each non-governmental organization has one voting representative. State and local governmental organizations have from 4 to 12 voting representatives based on the population of their jurisdictions. This gives the latter groups the strongest say on approvals. An 18-member Board of Directors is exclusively composed of—and elected from—government representatives. In 2014 an electronic voting system was implemented for the first time. It enables all repre­senta­tives to vote, instead of only those attending ICC meetings.

ICC committees initially develop and approve proposed code changes before submitting these to full membership vote; a two-thirds affirmative vote is required for adoption. Anyone voting conditional affirmative or nega­tive is required to specify what language changes would enable them to covert their vote to unconditional affirmative. There is also an appeal process that can be used to challenge code change approvals.

ICC also includes non-voting members: private and non-governmental individuals, businesses, and organizations with an interest in influencing codes. Although they do not vote, they actively lobby governmental repre­sent­atives on how to vote.

In the end the ICC approves model codes called ‘I-Codes’. ICC itself de­scribes these as minimum safeguards for homes, buildings and other struc­tures. The 2015 International Building Code (IBC) and International Resi­dential Code (IFC) are the latest editions in circulation. ICC also provides online discussion forums, education and certification.

All this sounds good and well organized. Except for one major problem: nothing that ICC finally approves automatically binds any of its members or government bodies—at any level. Already compromises have been made at reaching I-Codes. If the US had a federal law that automatically adopted ICC approved codes as a national code, the situation would still be manageable.  However it doesn’t and this is where the process totally breaks down.

Now it is left up to each individual state to adopt each revision of the ICC code whenever it wishes, as is or (as more often the case) modified to its liking. If a state has no statewide building code then it is left up to each county, and even municipality to do as it wishes. In 2015 over 20% (eleven) of US states still lacked statewide building codes. Others like Ala­bama (2012) and Mississippi (2014) with long histories of disaster losses only adopted them recently and are still face transition issues with local authorities.

States with building code laws typically have State Building Code Coun­cils whose members are politically appointed by the state governor. They tend to include a mix of government, local developers, builders, engi­neers, archi­tects and utility representatives. While I-Codes are on a 3-year update cycle, state deliberations over I-Codes and other changes can take an additional three, six or more years.

As these cycles vary considerably, different states use different editions of I-Codes. For example, New York had been stuck for 8 years on the 2006 version of the IRC (International Residential Code). Only in 2014 after Sandy did it finally approve the 2012 IRC. Who knows if or when they’ll consider the 2015 IRC?

The typical state code is a political and economic compromise of an al­ready minimum I-Code. If I-Codes contained a limited number of oppor­tuni­ties for builders to deviate, these usually are further expanded at the state level. Sometimes politically motivated governors will charge State Building Councils with a goal of saving money for builders in the name of achieving greater ‘affordability’.

North Carolina is a case in point. The state suffers from hurricane, fire, coastal flood and tornado hazards. The immediate past governor, Bev Perdue (2009-13) was a champion of ‘green’ codes. However she was also under pressure from homebuilders. In 2010 she asked the North Carolina Building Code Council to find savings of $3,000 per home.

On one hand she wished to appease her environmental supporters by championing certain ‘green’ code concepts. These added cost. On the other she also needed to satisfy a politically influential builder community that objected to higher costs. The result was to dilute resilience provisions in­cluding residential fire safety and wind resistance. By the way, the North Car­olina Code Council is chaired by a homebuilder and includes four contrac­tors.

As mentioned in Chapter 5, in 2013 IBHS identified North Carolina as a state whose codes are being weakened. That same year the state legislature succumbed to pressure from homebuilders and contractors and extended the time horizon for adopting updated I-Codes from 3 years to 6 years. As a result North Carolina will fall further behind in updating future codes.

However the watering down of codes does not necessarily end at the state level. Counties and municipalities often have the opportunity to further ‘localize’ state codes by opting-out and amending provisions. Even when pre­sumably not allowed, pressure from builders and other trade-related groups drives them to broaden opportunities for exceptions and deviations in already weakened codes. In some locales legal code variances become the norm. Fi­nally some states do not mandate enforcement and have reduced or even eliminated inspections

At the end of this tortuous pipeline local building approvers and inspec­tors are left to implement a confusing and disjointed array of codes, excep­tions, variances and accepted practices. I believe that blatant building code vi­olations or related corruption are exceptions in the US. Its justice system even though slow and expensive still has teeth. But why risk a code violation when there are so many ways to legally deviate?

This is not to diminish the efforts of thousands in the US building world who try to improve safety and protect lives and property. Unfortunately the system and processes that have evolved greatly undermines them.

When you remove all the smoke and mirrors of associations, committees and studies what do you see? All the above would be somewhat tolerable if it delivered the desired result. Does the US get the resilient performance from its built environment that Hammurabi demanded four millennia ago? The an­swer is NO.

So what does this painstaking process ultimately achieve: protection for people or protection for builders?  In my opinion codes have come to provide a legal cover for builders. By not being performance-based they shift account­ability from the builder to the government. Otherwise many builders would either be bankrupt or in jail. Sorry Hammurabi, no capital punishment here.

Today when you build something to a (watered-down) prescriptive gov­ernment-approved code it’s Hammurabi (the government=taxpayer) who ul­timately has to pay, not the builder. Of course the original Hammurabi would have never accepted this. But our democratically elected Hammurabi’s do. And pay they do using our money (or credit).

As we’ve seen in the evolutionary Urban Disaster-Resilience Cycle the natural tendency of builders is to go first-cost cheap, even if that generates lower resiliency. Why?  There are four primary perceived reasons:

– Cheap is lower investment

– Cheap is easier to build

– Cheap is easier to sell

– Cheap has higher profit potential

This drives builders to oppose almost anything that will raise the first cost of construction by even a minuscule amount. Backing and supporting them are businesses and associations representing products that feel they stand to lose if codes strengthen.

However the irony is that these builders have tunnel vision when it comes to promoting their greater interest. They already operate in a wide spectrum of markets with regard to codes. They profit in markets with stronger codes, as well as in those with weaker codes.

On a macro level the urban lifecycles show that raising Resilience Ca­pac­ity is likely to boost future growth and economic prosperity, which leads to creating even more opportunity for builders. Perhaps they just fear change.

Cheap does not mean economic (overall cost-effective). On the contrary from a lifecycle perspective, cheap first-cost is often society’s most expensive choice. This expense is shared between the con­sumer and the public. This is a general social tendency of converting private costs into public expenses (such as government pro­grams that encourage risk taking). Consumer behavior is often the result of ignorance and lack of motiva­tion, but is also driven by the wrong incentives.

On one hand codes give buyers a false sense of security; if it’s code-ap­proved, it must be safe. Implied is the notion that if government stamps it good and future events prove otherwise, that government should somehow back­stop and pay for it. Unfortunately the ‘moral hazard’ is that the more gov­ernment steps-in to shoulder disaster costs, the more consumers tend to ig­nore underlying risks in favor of first-cost cheap.

On the other hand the present code system is so complex, convoluted, and non-transparent that even practitioners strain to follow and digest it.  Government does little to promote awareness needed to drive greater resili­ence. Perhaps this would constitute a self-admission that pre­sent Re­silience Capacity is low. Not politically appealing. Also admitting a problem means you then have to fix it.

Instead government promotes and invests in more Emergency Capacity. Let’s improve readiness to respond when disaster inevitably hits. It comes across more easily as being politically caring and responsible (as-well-as media friendly). But applying more bandages will never make you healthier.

Julie Rochman, president of IBHS has noted that residential building codes were never meant to protect the property, just give people enough time to escape. For most consumers, a house will be their life’s largest and most important financial transaction. However many have no idea how little safety protection they are actually buying when they purchase (or rent) a home simply built to code.

In how many areas of our lives do we accept to be at the minimum standard? Not in nutrition, health, education, transportation, clothing or en­tertainment. Yet in the most important part of our life—housing—we are happy to (unknowingly) be at the minimum. We allow others to speak and de­cide on our behalf to keep standards low, while they reason that we cannot afford anything better.

FEMA reveals deep in its ‘Fundamentals of Risk Analysis Report’ that codes and standards require minimal levels of protection from natural haz­ards, including a minimum factor of safety. It warns that meeting minimum regulatory and code requirements for the siting, design and construction of a building does not guarantee that the building will be safe from all hazard ef­fects. How about posting that on every home ‘for sale’ sign and adver­tise­ment, similar to warnings published for cigarettes and alcohol.

Unfortunately consumers become aware of this only post-disaster when insurers inform them of the consequences, usually too late in the decision process. Even here governments are generally reluctant to al­low the insurers to price-in actual risks or coor­dinate broader market communication and public awareness campaigns.

Unfortunately state governments often view the insurance industry as an opponent whose prices need to be beaten down in the name of the public, rather than an ally in the shared goal of improving Resilience Ca­pacity. This forms a major obstacle to improving the present system. Such antagonism is often cultivated and reinforced by interests opposed to strength­ening building codes.

It is rare for governments to admit that codes reflect a minimum (and often unknown) level of hazard protection. One such brave admission is con­tained in a 2009 report released by the San Francisco Planning and Urban Research Association (‘SPUR’) titled ‘The Resilient City: Defining what San Francisco needs from its seismic mitigation policies’. San Francisco faces earthquake, flood, fire, and tsunami hazards.

SPUR’s origins trace back to 1910. Its stated mission was to improve the quality of housing after the 1906 earthquake and fire. It has since evolved into a planning and action forum for local resilience in the greater San Fran­cisco area. It is a quasi-public non-profit organ­iza­tion with strong local government and multi-stakeholder participation.

The report addresses the relationship between building codes, resili­ent performance and community engagement. I have extracted from it several very rather ‘revolutionary’ statements:

Our building code embodies hundreds of judgment calls about how strong structures should be, but the public and policy makers generally have no idea what these standards mean, what the outcomes will be from the “black box” of engineering decisions. 

Indeed codes are a mysterious black box controlled by very a limited number of ‘insiders’. They affect everyone but we (and most of our elected represent­atives) have little idea what they mean or how they will actually per­form against real hazard events.

San Francisco is probably one of the most technologically advanced ur­ban centers in the world. A major disaster would seriously impact our global information technology. If public admission is the first step to­wards correc­tion, this is one of the boldest steps a US urban area has ever taken.

The truth is that when we choose our engineering standards we really are choosing to define how many deaths, how many building demolitions, and how long a recovery time we will have for various levels of earthquakes. Cur­rently, San Francisco has no adopted performance objectives for determining these factors. As a result,

  • Design and construction requirements for new construction still focus mostly on preventing the loss of life and in most cases ignore the question of building damage and post-earthquake usability.
  • Little is being done to rehabilitate older existing structures, which con­stitute the majority of buildings and which were built without earthquake-resistant features now required.

San Francisco’s codes are probably better than the most US cit­ies. However this strikes at the core of the problem. Instead of designing codes to suit builders and developers, they should be designed to satisfy the level disaster impact and resilience performance a community desires. However no one ever asks the community.  The ‘black box’ assumes by default they want the lowest cost and performance.

The traditional approach to code development is mostly hidden from the ‘public eye’. The general public is generally absent from ICC discussions, state code commissions and county/city code hearings. There are no public-interest resilience watchdog groups arguing and advocating on the public’s behalf. Instead it is dominated by the building and real estate industries, who are motivated to defend their interests and use public ‘affordability’ to justify low standards.

This is reinforced by SPUR (I have substituted ‘seismic’ with ‘hazard’ to broaden its message):

Achieving a desirable level of disaster resilience requires a clear and specific understanding of what is likely to happen in the wake of an disaster, and specific ideas for how to improve the performance of facilities in order to meet adopted goals. Commonly held misconceptions of expected hazard performance confuse efforts to improve resilience. For exam­ple, the common belief that buildings and infrastructure built to code are “hazard-proof” is incorrect. Instead many new facilities are designed with the expectation (at least by the professionals) that sig­nificant damage likely will occur in a major hazard event. SPUR believes that simple and direct descriptions of hazard performance goals should be adopted so that regulations to achieve these goals can be developed.

Ending the ‘common belief’ that codes are ‘hazard proof’ is a significant step. For the public to decide how much disaster it is willing to accept the performance conse­quences of alternative codes need to be made easier to understand and debate. The report goes on to detail multiple tiers of performance measures and goals for an expected disaster event. A perfor­mance goal is essentially a pro­jected destruction scenario that allows a community to recover within a de­fined time and cost.

The implications are that with greater transparency and clarity resilience can be debated in public rather than being left to the obscure backroom compromises of engineering, economic, and special interest pres­sures. This includes being able to explicitly address affordability. The level of resilience performance that can (or cannot) be afforded becomes a matter of democratic choice. Assistance for those in need becomes a policy con­sid­eration.

The objective is to elevate everyone to higher levels of resilience instead of automatically defaulting to the low­est possible denominator. However the building industry will need to change, as it has become accus­tomed to following prescriptive standards, rather than making performance statements.

The various engineering professions use a wide variety of terms to de­scribe their performance expectations and, in some cases, do not clearly state what they are. In the case of new buildings, the code…stops short of declaring what performance is expected.

Most important, even when performance objectives are explicitly defined, they are almost always stated in terms of safety only – that is, in terms of whether people nearby would be injured during the earthquake itself. While safety is essential, this limited perspective fails to address the larger questions of resilience: Will the buildings be usable when the shaking stops, and how soon will full services be restored?

This enlightened document continues by recommending:

…creating a certification system for vol­untary seismic upgrades akin to the LEED system for green building stand­ards; and adding strong incentives for owners to build to higher seismic standards. Owners and tenants need to understand what seismic performance to expect from the buildings they own, lease and construct, and the options they have for improvement.

If suc­cessful, San Francisco will become a model for other cities.

Achieving disaster resilience is critical to the survival of San Francisco. Resiliency is not an impossible nor economically infeasible goal. Success re­quires a clear understanding of what will happen, and what steps must be taken now – before the disaster – coupled with an achievable implementation schedule and a rational program of incentives to make programs feasible.

It also calls for forming partnerships with the regional and state public and private providers to secure the necessary modifications to their systems.

Finally, it proposes that: The City also should become an advocate at all levels for the development of consistent performance standards nationwide.

Chris Poland, a renowned structural engineer and earthquake design ex­pert with over 40 years of experience is credited with being the primary au­thor of this report. In 2014 Chris was selected to become a member of the Disaster Resistant Fellows for a US National Institute for Standards and Testing (NIST). This group of experts aims to assist NIST in developing a Disaster Resilience Framework. He is the only member coming from the buildings segment. Others represent transportation, power, and water infra­structure, as well as emergency and community behavior expertise.

An outcome of this public dialogue was that San Francisco became the first US city to publicly adopt poli­cies requiring the compulsory retrofitting, within specified time periods, of grandfathered residential buildings considered to be high seismic risk.

Engaging the general public in determining the level of resilience in codes is not something today’s building industry and the ‘system’ feels at ease with. In 2014 the University of Colorado conducted the first of its kind survey on public building code perceptions and resilience prefer­ences. The survey was conducted in two communities affected by earthquake hazards, San Francisco and Memphis, Tennessee. In each a representative sample of 400 citizens were surveyed. These excluded members of the building industry. The findings were quite revealing and similar in both areas:

  • Only 1/3 believed that current codes provide occupiable/functional building performance in case of an earthquake
  • About 75% want building codes to provide greater occupiable/ func­tional perfor­mance
  • 60% are willing to pay an additional $1-3/sf to get occupiable/func­tional performance, and about 20% are willing to pay $10/sf

This is contrary to what building industry interests for decades have broadcast in order to keep building codes at minimum levels. At a recent industry conference in Washington, DC these interests appeared uncomfort­able with such public input and tried to downplay the role of surveys. However it is important that in the future more policymakers get public input when pressured by builders to sacrifice resilience.

The building code system has tremendous built-in inertia. Change will not come easy. There are two strategies that could pro­ceed concur­rently.

  • To develop a national mandate on raising building resilience standards.
  • A grass-roots approach of more con­su­mer transparency and ownership of risk (a-la SPUR). In other words trans­ferring decision-making from ‘experts’ and ‘influence-fixers’ to the people.

Finally there may be a third strategy: the Hammurabi approach; making builders more legally and financially accountable for the resilience of their constructs, rather that allowing them to lobby for codes that provide the legal cover for delivering substandard performance.

Chapter 10

Choices We Make: What To Save and What Not

In its model codes ICC explicitly selects which buildings should have a higher chance of surviving hazards and which should not. It sets four ‘risk categories’ (formerly occupancy categories) labeled from Roman numeral I through IV (1-4), with IV having the highest chance of survival.

Category IV includes essential public buildings such as fire, police, criti­cal defense buildings and designated emergency shelters, as well as build­ings storing hazardous materials. Medical buildings with surgery and emer­gency treatment facilities are also in this category.

Category III consists of school buildings with occupancy loads above 250, medical buildings with resident patient loads above 50 (but without sur­gery or emergency treatment), jails, and buildings used for public assembly of more than 300 people.

Everything else falls in category II, except for agricultural, minor storage and temporary facilities that are in the lowest category I.

Thus our homes, offices, commercial and logistics facilities, smaller school and hospital buildings and smaller assembly buildings all fall into the big bucket called category II. In a disaster you actually may be better off in jail (at least from the hazard).

As previously mentioned ICC model codes and eventually US state and local building codes represent a minimal level of resilience. However rarely do builders informed or offer consumers an option to upgrad­e. The existing building stock hardly offers upgrade alternatives either. The system placed you in category II, and unfortunately does not make it easy for you to upgrade yourself to categories III or IV.

You probably have a choice to upgrade yourself on many other items you buy. Did you purchase the most basic cell phone device for example? Cell phone providers are some of the world’s best marketers and they smartly turn upgrading to profit. Do you wonder why builders (especially homebuilders) do not try to upgrade their customers to more resilient buildings? Instead they generally oppose anything that will raise the bar even slightly.

Don’t they see a profit in selling-up consumers on resilience? Are they shortsighted and need a nudge? Or do government policies cause the public to feel ‘safe, ignorant and comfortable’ in their ‘unsafe but cheap cocoons’?

Does the US President occupy a category II residence? The answer is no. The White House was built in 1800 on a hill to reduce flood risk. It originally was a wooden structure with exterior walls made of quarried sand­stone. In 1814 the British burnt it. It was rebuilt in wood and again partially destroyed by fire in 1929. Finally in 1948 shortly after World War II, Presi­dent Truman gutted the entire wood interior and rebuilt it with steel and concrete, pre­serving the exterior façade. The reconstruction was com­pleted in 1952 and would rate a category IV.

If the First Family resides in a top resilience category, why are remain­ing citizens of the world’s most developed economy stuck—by default—in category II? The consequence of this is an alarming escalation of disaster losses. Sadly, the prevailing ‘wisdom’ is that they cannot afford it. Do we really accept that Americans can afford to upgrade almost everything else in their lives except their housing?

In one of many contradictions of US codes, multi-story structures for parking cars are more hazard-resilient than the homes and buildings where people live and work. Americans love their cars, but protecting people less than cars?  Incredible, if not insane.

Equally surprising, homes and buildings in less developed countries are often more hazard-resilient than those in the US. So why can’t Americans af­ford the resilience that people in many lower income countries already en­joy? The truth is they actually can.

What needs to change is for government (not influenced by those benefiting from a low resilience status quo) to help Americans realize that they can afford and have adequate supply of resilience. An astute government that educates and empowers citizens to make choices—and if the majority demands a higher level of building performance that should become the new code standard. In addition policies that stim­u­late a private marketplace for greater resilience especially in housing, rather than proliferating programs that encourage risk taking and trap people in vicious disaster-driven cycles.

This will not be easy. Rocking the boat will be necessary in order to make it more secure.

Chapter 11

Trojan Horse of Disasters: Affordability Abused

Affordable is probably the most misunderstood and abused word in eco­nomic development. Politicians use it to attract voters. Builders use it to pro­mote cheap buildings and weak codes. Civil activists use it defend the inter­ests of lower income segments.

In the name of affordability US homes are built more disposa­ble than homes in most countries. Even unplanned urban communities in poorer nations often use more resilient materials (although building methods may not be resilient). It is a contradiction that Amer­icans cannot afford the cost of re­sili­ence, when countries with far lower incomes can. Instead they spend more than anyone else on disaster losses resulting from vulnerable construction.

What does affordable really mean and what is it not? Although it can re­fer to many things including food, healthcare, education, transportation, en­ergy, clothing etc. we focus on its meaning with regards to housing.

Does affordable mean low first-cost, low cost of ownership or some com­bi­nation of low ownership cost and risk of loss? Does it mean afford­able to the consumer, affordable to society or both? You can easily make something affordable by transferring costs (and risks) to soci­ety. You can also make something low cost by compromising perfor­mance standards. If afford­able implies a low level of performance, then who sets the minimum? It is meaningless to talk about affordable unless one first establishes a per­formance level. This standard is what build­ing codes are meant to be.

The affordability theory goes as follows: By keeping codes weak we make housing more ‘affordable’. However weak codes re­sult in higher hazard losses. When extreme losses occur, government steps in and pays. Therefore everyone is happy: politicians, builders and consumers. So where’s the catch?

The ‘catch’ is that this model is unsustainable. Eventually the cost of losses exceeds what government can tax and borrow. The ‘house of cards’ lit­erally collapses on our heads. Plus repeat media broadcasts of human and economic losses eventually harm politicians’ popularity. At some point the ‘volcano’ of change erupts.

What follows is intense debate, pressure and—finally again—compro­mise. The minimum standard is lifted a bit higher until that too proves insuf­fi­cient (recall the 2nd Law regarding urban growth). Again everyone waits for the volcano to re-erupt. The system exhibits tremendous built-in resistance to proactive change, especially if the ‘system’ has been fragmented into hun­dreds and thousands of little pieces. It’s the Urban Disaster-Resilience Cycle repeating over and over and over.

In fact, little correlation has ever between proven between home prices and weaker building codes. Prices are determined by market demand and supply. Zoning, land use restrictions and building density regulations are what primarily affect supply, and not the incremental construction cost of having more resilient codes. That resilience reduces affordability is a myth created and sustained by builders.

The building industry makes money in all markets, ranging from weaker to stronger codes (maybe not as much). Consumers are able to similarly afford housing in areas where resilience is the primary difference. Low-income populations live in Florida with stronger building codes, as well as Texas and Mississippi, which have weaker codes. There is no proof that weaker codes improve the economic condition of those at lower-income levels. On the contrary being the most vulnerable segment, weak codes actually harm their abil­ity to economically advance. History has repeatedly shown us that raising Resilience Capacity promotes greater economic development and social pros­perity. Wouldn’t that be better for all income segments?

Cheap low-resilience construction can be society’s most ex­pen­sive choice. In Chapter 1 we noted that merely three hurricanes de­stroyed 1.2 million buildings and cost $250 billion (2014 dollars). That aver­aged $200,000 per building. Even if we attributed half to loss of in­frastructure and transportation assets, it still averages $100,000 per building. This would include cleanup, temporary shelter, repair/ reconstruction, and repurchase of damaged contents.

In the end those destroyed ‘first-cost cheap built-to-code’ homes proved to be very expensive, with a 60% cost premium. The median 2014 single-family home price was about $270,000. The materials and construction portion averages approximately $160,000 (60%). Remaining costs being land, sales, overhead, financing and profit. If a stronger code would have added an extra $12%, that means society actually lost an average $80,000 per home.

Many will say it’s all about chance (i.e. gambling). Certain buildings will be destroyed and end up being very expensive but most will escape. Spend­ing $20,000 to save $100,000 is a good bet if the chance of disaster is greater than 20%. This is where clear public communication and education regarding haz­ard risk over a building’s lifespan (rather than thinking short-term) be­come important. Lets see if we can calculate that chance.

As noted in Chapter 8, flood risk within the 100-year contour area is 26-100% over 30 years. If homes are built to last 70 years (most of the world aims higher and the US should also if it wishes to be sustainable), the proba­bility becomes 51-100%; and that’s just for flooding. On fires, 0.4% of US homes catch on fire every year. This is equivalent to a 250-year recurrence period. Therefore the probability of a fire over 70 years is 24%. Again, these are only single hazard risks. All buildings face multiple hazards (or perils as insurers call them). Take the case of a ‘safer’ home outside the 100-year floodplain, with a 0.4% flood chance. What is the probability over 70 years of being hit by either a flood or fire hazard? The answer is 42%. We should defi­nitely be willing to spend $20,000 (and more) to save $100,000, even in a lower flood-flood risk area. The above didn’t even consider the added wind and seismic risks of many areas. No one (even our government) has tried publicly educating and ex­plain­ing this to us. Why?

The human impacts of disasters are lost or injured lives, reduced produc­tivity, dispersed families, and destroyed memories. It is difficult to place numbers to these but they could be several times the physical losses. Greater resilience is the most ‘affordable’ building solu­tion rather than the minimum standards set by the consensus ‘black box’ of current codes. How do we break our government-approved hazard-risk gambling ad­diction?

Those opposing resilience prefer that society engage in a danger­ous game of roulette; one in which the chances are stacked against the con­sumer. In roulette the ‘house‘ ultimately wins. In this case, nature is the house.

Unfortunately betting against nature is a risky sport even for the US. The more it stocks-up on non-resilient development the more it stands to loose.  Our children will inherit this building stock of liabilities. Add the many other liabilities being passed on to future generations—retirement obligations, medical benefits, public debt—and troubling pattern emerges.

The government does many things to help consumers afford homes, especially at lower incomes: financing, interest tax deductibility, and capital gains transferability to name the most important. It also has many pro­grams to attract investment in affordable rental housing. How­ever all these give the same treatment to properties whether they are resilient or not. If government desires more resilience, the time has come to make that differentiation and finally make disaster-resistant homes more ‘affordable’ in­stead of prolonging the affordability of disaster-prone housing.

Chapter 12

A Disastrous Tug-of-War: The Battle for Resilience

In the coming years the US building sector is poised for a war of epic proportions as forces build-up on all sides: those battling to continue weak, cheap and slow-changing building codes, versus those pushing for more haz­ard-resilient codes. Already in place are those demanding ‘greener’ codes.

The stakes are high: ideology, economics and, in the bigger picture, the security and prosperity of communities and the country. Much time, effort and resources are certain to be expended to influence both policymakers and consumers. Offsetting and contradicting messages will generate plenty of blurriness and confusion, only to be made clearer when disasters strike.

Resilience and green actors should realize they share a common objective: genuine sustainability. The only difference is they are approaching from dif­fer­ent angles. Hopefully they will appreciate the advantage of combining forces into a ‘Mean and Green’ coalition. ‘Mean’ implying tougher towards haz­ards.

Defenders of ‘Weak and Cheap’ will argue for ‘affordability’, local choice and voluntary standards, rather than raise resilience above current low levels. They will even argue that their ‘weak and cheap’ buildings somehow are ‘green’.

Ultimately ‘Mean and Green’ will prevail with greater risk transparency, disclosure and a more educated and aware con­sumer. Perhaps we will even see mandatory federal standards for resilience.  But a tough battle still lies ahead. Members of the opposing sides appear to be:

Weak & Cheap

  • Builders, short-term developers and building-related groups
  • Weak and cheap materials
  • Those who still believe that cheap means affordable
  • Those wanting less regulation and federal involvement

Mean & Green

  • Insurers
  • Resilient materials
  • Architects and engineers
  • Environmentalists
  • Disaster prevention and recovery groups
  • Technology providers

Where will policymakers stand? Elected officials typically wait to see in which direction the winds of public opinion are blowing before taking a clear side. They will listen to both; perhaps play one against the other and likely welcome financial support from both. Maybe one or two will rise above the crowd, take an early stand and make resilience a component of their political platform and persona.

Certainly the growing national (and in some states regional) attention and debate regarding climate risk and mitigation provides a rising opportunity for resilience. However even this has downside in the multi-dimensional US context. Many oppose anything related to greenhouse gasses or climate, in addition to those who oppose anything federal. It will be a shame if resilience somehow gets caught up in this conflict.

For non-elected officials and bureaucrats, availability of resources and ability to cope with change will be key issues. Many do not like the pre­sent system and see the need for change. However local levels, resilience is often buried under many other pressing needs and urgencies, while resources fluctuate with economic and construction cycles. Entrenched economic interests pressures and lobby on a daily basis. Many local officials are truly front-line resilience ‘warriors’, while others just look for ways to ‘get by’.

The stage is set; the players are in place. Let the battle (or storm) begin.

PART II: The Storm

Originally we said “This cannot happen to us”,
then we said “This cannot happen to us again”,
now we say “When will this happen to us again”

Moore, Oklahoma councilman
and repeat tornado survivor.

Chapter 13

Weak and Cheap: The Business of Non-Resilience

Homebuilding is a critical part of the national economy, especially one that is growing economically and changing demographically. In the US it accounts for about 2% of GDP and employs over 2 million people.

The National Association of Home Builders (NAHB) is a trade or­gan­ization started in 1942. It is a federation of 300 state and local asso­ciations totaling 140,000 members. Its members build of about 80% of US homes. Its CEO is a lawyer who previously served as their chief lobbyist. NAHB casts a formidable shadow over national and local building debate and policies.

NAHB’s stated purpose is to assure that Americans have access to safe, decent and affordable housing. In the name of affordability it systematically opposes stronger building codes. In 2013 it proudly claimed to have saved its members $6,200 on every home built. Based on our earlier arithmetic that repre­sents 4% of construction costs for an average single family home. Annu­ally it amounts to about $6 billion—a significant value to its builder members.

Regarding these savings NAHB notes in its annual report that it:

…maintains an intensive ongoing effort to keep costly requirements out of the model codes. When successful, this saves builders significant money in subsequent years in areas built to those codes.

At International Code Council hearings held in early October 2013, for example, NAHB was successful on 78% of the code proposals for the 2015 IRC that the association either supported or rejected in its efforts to keep building codes flexible, cost-effective and product-neutral.

NAHB members will directly benefit from these victories when local ju­risdictions begin to adopt the 2015 version of the code.

In recent decades US disaster losses have averaged six times higher than NAHB’s savings, without even including the total cost of fires. To the extent that such savings were at the expense of resilience they come at a tremendous economic (not to mention human) cost to US society.

One of NAHB recent ‘victories’ was in helping Illinois homebuilders de­feat a fire sprinkler mandate. It specifically states that:

NAHB provided financial and technical assistance to help Illinois home builders mount a quick and effective campaign last summer to defeat the state fire marshal’s plan to mandate fire sprinklers in new single-family homes. NAHB argued for the use of smoke detectors, which is a safer and more cost-effective alternative.

NAHB ignores the overwhelming evidence presented in chapter 7 and the many studies and analyses performed by NFPA. On its own it con­cluded that smoke detectors are the best solution for saving people and prop­erty. Perhaps it is the best solution for their own members, rather than the homeowners and occupants whose property and pos­sessions will be destroyed in fires. Smoke detectors may alert people to get out in time but do nothing to suppress the fire itself.

What if NAHB members had to (even partly) rebuild those burnt homes at their own expense (per Hammurabi)? Would they reconsider their position? I bet they would not only be installing sprinklers but also much more. What a difference having ‘skin in the game’ makes! Risking someone else’s property and possessions is always easier than your own, especially if you can make money while doing it.

In the process they funded a ‘scientific’ survey of 800 people to prove that Illinois consumers did not want fire sprinklers. 89% responded that smoke detectors were all the safety they needed. 28% didn’t want sprinklers even if they got them for free.

If these surveys are correct it only proves how uninformed and misin­formed the public is. Don’t rely on NAHB to properly inform them. The only shame is that government failed to do its job. Unfortunately this pattern has repeated for many years in many states. Later chapters will reveal how NAHB has systematically opposed resilience to many other haz­ards.

This is not to diminish the many contributions NAHB does make towards housing, such as training, product testing, lobbying on home finance, and property rights. However its overall adverse role to strengthening resil­ience is its darkest facet.

To its credit (or sense of guilt) NAHB did create a charitable organ­iza­tion—the Home Building Industry Disaster Relief Fund—enabling its mem­bers to make contributions for assisting those affected by disasters. According to a December 2012 statement it had a balance of $800,000. NAHB also features a disaster recovery resource section on its website. However the fo­cus is on Emergency Capacity rather than building homes that are less disas­ter-prone. NAHB makes public relations efforts to appear con­cerned and help­ful but its actions demonstrate that it is clearly part of the problem.

NAHB’s has tried many ways to battle codes. In 1997 they contract­ with Harvard’s Center for Risk Analysis to study the social cost-benefit of stronger codes. Three years later a report made the incredible claim that spending more on resilient homes risked leaving people with less income for other heath and safety goods. Specifically that increasing the cost of an average house by $150 would cause 3-60 premature deaths and 20-800 lost quality-adjusted life years. The claim was so ridiculous that no one took it seriously. The Center’s founder John Graham had a long history of defending the interests of businesses opposing regulations, including the tobacco industry.

In June 2013 the US government proposed a Climate Action Plan (CAP) to address climate change and resilience. Later that year NAHB issued a paper titled ‘Overview on Climate Change and Resiliency’. It warned members that the policies and programs under consideration could significantly impact how we build. It noted that CAP would push to update building codes as a means of disaster mitigation’ and ‘there are several pieces of legislation that make the link between updated building codes and resilient buildings. NAHB prom­ised to work with federal agencies and our friends on the Hill to ensure that such policies are voluntary and do not impose an undue burden on the hous­ing industry. The ‘friends on the Hill’ here means federal legislators that re­ceive its financial campaign contributions.

NAHB stated that it works with officials and stakeholders to improve building code requirements based on observed damage from severe weather events, but continues to oppose across-the-board increases in code stringency that make housing less affordable… NAHB benefits from the current frag­mented and inconsistent state of US building codes. Concerned over feder­ally-mandated standards proposed by certain lawmakers, it stated that it is working with these legislators to ensure that states and localities can retain their right to amend model building codes, above code standards remain vol­un­tary and that planning and zoning decisions are left to local jurisdictions.

It takes money to apply political influence. Not just money for promo­tion, education and studies, but also political contributions at federal, state, and local levels. NAHB spends around $2 million a year on such contribu­tions to protect its interests. It has shown in the past that it expects favorable votes for its support. This does not include political spending by related state and local associations as well as individual members that could well exceed this amount.

This is not to ignore the fact that some homebuilders are moving against the NAHB torrent and building more resilient homes. They are adopting practices recommended by IBHS to reinforce their projects and ‘upgrade’ consumers. Unfortunately they are too few and mostly focused on the higher-end custom-built market. However they deserve private and public encour­agement and support for their initiative.

Given that NAHB has been in existence for over 70 years it surely should bear some responsibility for the current non-resilient performance of the US residential built environment. You might think they would have learned something from decades of disasters and economic losses but they have not. Their primary concern appears to be defending at any cost the status quo, including the $6 billion dollars in annual cost savings for their members, all in the name of consumer affordability.

In the end do we need to lift the protective veil of codes (that they help design for themselves) and begin holding them accountable—as Hammurabi once prescribed—for those homes they build which are so easily destroyed? Aligning the economic interests of parties is often the best solution to resolve conflict of interests. My guess is that it would drastically change their build­ing ways to the greater benefit of society.

Chapter 14

When Disaster Strikes: Knock on Wood

If homebuilders are the engines of non-resilient US construction the fuel they run on is cheap wood. Throughout history wood has been the most prev­alent low-cost construction material. However it has three disad­vantages: it is combustible, it is weak and it rots (or gets eaten). Therefore it carries a higher lifecycle cost in order to properly secure and main­tain, which erases its initial cost advantage. That is, unless you gamble at prematurely losing it, which is what increasingly is happening in the US.

As disaster experience accumulated with time, most societies switched to non-combustible, stronger, and non-organic construction mate­rials, especially as these became mass-produced. Unfortunately with the exception of urban high-rise and south Florida construction, the US residential sector never followed this general evolution (other than the President’s resi­dence). In contrast, most of the large commercial, institutional, and critical infra­structure seg­ments did evolve. Thus for over a century the US has re­mained the world’s largest consumer of construction wood, feeding its residential market.

Wood is a great material for making furniture, cabinets, interior décor, and crafts. Even an isolated wood cabin or farmhouse is fine. However from a disaster prevention perspective, with the possible exception of low-rise build­ings in less dense seismic areas, wood is a higher-risk material. That risk only worsens with greater urban density and height.

Statistics are difficult to obtain but related information suggests that over 90% of US buildings destroyed and/or damaged from natu­ral hazards are pri­mar­ily constructed of wood. The vast majority are one or two-story homes. That NFPA stopped reporting this infor­mation on fires more than a decade ago suggests possible pressure from interests with regards to adverse public­ity. Similar pressure has also likely caused the govern­ment to avoid collecting and reporting data on the percent of destroyed buildings made of wood. The fact that wood is sel­dom used for building schools, hospitals, government structures, supply chain facilities, critical services, and infrastructure, partic­ularly facilities in Risk Categories III and IV, should speak for itself.

The prevalent wood used for construction is called softwood. It is cut from pine, spruce, and fir trees. The US is by far the world’s largest consumer of this wood with 1/5 of global consumption. China consumes is about half the US volume (with more than 4 times its population), Germany a third, Japan and Can­ada are each about a quarter, and Russia less than a fifth.

These same countries except for Japan are also the world’s largest wood producers. The US is number one, followed by Canada, Russia, Germany, Sweden, and China. However when it comes to exports Canada is number one, followed by Russia, Sweden, Germany and Finland. Major US producing areas are the southeast, northwest and northeast. The first two account for almost 80% of production.

At its 2005 construction peak the US consumed 65 billion board feet (an industry volume unit measuring 12 by 12 by 1 inch). 80% was used in single-family construction (new and remodeled). Only 3% was used in multi-family, and 6% in went into non-residential buildings. Five years later in the midst of the recession, demand dropped in half.  It has partly recovered since.

An important detail is that less than half of the wood consumed by US sin­gle-family homes actually goes to build new homes. More than half is actu­ally used to repair, upkeep, and improve existing homes. That the existing building stock itself consumes so much wood raises a key question: How much of this consumption is due to the high level of destruction and obsoles­cence in the wooden built environment? If true, then non-resilience and short lifespans are important drivers for maintaining high levels of wood demand and form an integral part of the wood industry’s strategy.

Another related statistic is that in the 30-year period 1977-2007 average household spending on home repair, upkeep and improvement increased 77% (constant dollars). This may also indicate the rising cost of main­taining a vulnerable built envi­ron­ment.

The US is also the world’s largest wood importer accounting for about 15% of global trade. Other major importers are China, Japan, Italy and UK. More than 90% of US imports are Canadian. During the reces­sion imports reached 40% of domestic consumption. As prices declined US producers could not compete with Canada. In 2011 as volume and prices recovered, imports adjusted to 30%. As we will later reveal Cana­da’s governments have traditionally subsidized wood production.

The America Wood Council (AWC) is a trade organization that repre­sents 75% of North American wood production. It was formed in 2010 to be an umbrella association for the wood industry by consolidating three prede­ces­sor organizations: the National Forest Products Association, the American Forest and Paper Association and the American Paper Institute.

Per its mission statement AWC aims to increase the use of wood by as­sur­ing the broad regulatory acceptance of wood products, developing design tools and guidelines for wood construction, and influencing the development of public policies affecting the use and manufacture of wood products.

Furthermore AWC provides an organizational structure for wood prod­ucts companies and associations to work together on building codes and standards, green building policy issues, and a focused set of environmental regulations. Working together, the industry can have the resources, clout, and credibility to achieve policies that can secure a strong future for the wood products industry.

The US wood foresting and products industry (including paper and other products) employs a little over 300,000 workers. The largest wood pro­duc­ing states, with annual shipments above $3 billion (2011) are:

2. North Carolina$4.1
3. California$4.0
4. Texas$3.7
5. Wisconsin$3.3
6. Pennsylvania$3.3
7. Georgia$3.2
8. Washington$3.2
9. Alabama$3.0

Interestingly four of these also appeared on IBHS’s state rankings on Atlantic and Gulf Coast building codes discussed in Chapter 5. All four (North Carolina, Texas, Georgia and Alabama) were in the bottom worse half of that list. Mere coincidence or is there some inverse correlation between a state’s building codes and the size of its wood industry? As we shall see the wood industry is generally opposes stronger building codes.

What does AWC say about disaster resilience? Actually they prefer to say very little. One statement announced their participation in ICC’s 2014 ‘Building Safety Month’. It included the following incredible quote: By their design, building codes are written so that compliant struc­tures all pro­vide the same levels of safety, regardless of principal materials used. As a re­sult, when built according to code, wood-frame construction has a proven fire safety and performance record.

That the record overwhelmingly shows the exact opposite is of little in­terest to them. Their simple rationale is: if the building code allows it, it must be safe; in fact it must be as safe as anything else that building codes allow. That building codes have repeatedly proven weak is something the wood industry’s marketing capitalizes on. In other words, set the bar low enough so that wood can claim to be as good as everything else. This essentially sums up their position on resilience.

AWC believes that the world needs better ‘education’ to convert to their sustainability philosophy. With this in mind the industry recently dou­bled-down on promotional spending, even though that meant consumers may have to double-up on risk.

Only with regards to seismic hazards do low-rise wooden buildings ap­pear resilient due to their inherent lightness. However they must be an­chored properly to foundations. For this reason the industry has not ad­amantly objected to programs and code initiatives related to earthquakes. On the contrary they feel threatened with regards to wind and fire initi­atives and have gener­ally opposed resilience.

The US President’s Council on Environmental Quality is charged with coordinating CAP’s activities and agenda. In October 2014 they released a plan. Following this AWC’s CEO commented that it outlines a com­mit­ment to advancing wood as a building material, which includes en­cour­aging building code changes to allow 7- to 15-story wooden buildings.

Wood consumption in multi-story buildings is only one-tenth of what is used in single-family homes. However in recent years multi-story construction has been the fastest growing building segment. The wood industry wants more of it. Never mind that multi-story buildings are more hazard-resilient because they actu­ally contain less combustible materials. AWC simply wish we ignore and for­get what hap­pened to Rome, London, Chicago and hundreds of other cities in prior centuries. On top that, the US government is now going to help them to do it.

What the announcement alluded to is the so-called ‘Tall Wood Compe­tition’. The US Department of Agriculture (USDA) deemed it wise to spend $2 million to design and build wooden high-rises. Selected archi­tects, engi­neers and developers receive taxpayer monies to pay for performing engineer­ing and code vari­ances needed to make such buildings happen. By the way, ‘code variance’ is a polite way of saying watering down already weak codes.

Are 15-story wood structures part of some secret government pro­ject to reduce disasters and restore US resilience? Definitely no. Then why is the gov­ern­ment doing this and what is the relationship between USDA and the wood industry?

If there is one example of political ‘pork’ in this book this is it.  For those unfamiliar with the term, ‘pork’ refers to government spending on pet projects of politically influential parties, which have little or no benefit to society. If USDA is really serious, perhaps the first 15-story wood building should office its own employees. Instead they currently safely occupy the Whitten Building, a resilient steel and concrete structure in Washington DC.

What many do not know is that USDA has evolved into becoming the foster parent for the wood industry. Its 2015 $150 billion-a-year budget con­tains the following vision statement:

To expand economic opportunity through innovation, helping rural America to thrive; to promote agriculture production sustainability that better nourishes Americans while also helping feed others throughout the world; and to preserve and conserve our Nation’s natural resources through re­stored forests, improved watersheds, and healthy private working lands.

Where does promoting construction wood fit in this? It is not a product that will feed Americans and others. Nor is cutting forests a way of restoring them.  Maybe it just helps rural America thrive?

UDSA considers wood production as ‘farming’ and its rationale is that forests help generate rural wealth through the production of wood products.  So its support is all for the benefit of ‘rural wealth’. What they don’t reveal is that most of this forest wealth is mainly controlled by large corporations.

Within USDA the agency responsible is the US Forest Service (USFS); it spent $6 billion in 2014. Its stated mission is to sustain the health, diversity, and productivity of the nation’s forests and grasslands to meet the needs of present and future generations.

USFS spends about $340 million a year on forest products mostly to fulfill its ‘productivity’ mission. This includes the Forest Products La­bor­a­tory, which develops everything from better building materials to base­ball bats to high-value products from wood-derived nanomaterials. One of their projects was working with NAHB to develop a wood-friendly ‘green’ standard to promote and incentivize greater use of wood in homes.

USFS’ $275 million research budget aims at expanding exist­ing and developing new markets for the full range of forest-based products including timber. It adds that this research will be used to generate jobs, in­crease the value of underutilized forest resources and create value for land­owners. All this raises the question: does the USFA work for US taxpayers or forest landowners?

One of their programs involves implementing the 2009 Federal Land As­sistance, Management, and Enhancement (FLAME) Act that calls on federal land managers to develop a joint wildfire management strategy. One item under this is titled ‘Building Fire-Adapted Human Communities’ and aims to ‘expand the use of wood in green buildings’. So they believe they can better manage fires by building more combustible wooden buildings! They ignore the glaring facts that buildings surviving wildfires are built predom­i­nantly with noncombustible materials.

USFS does many great things to manage and protect forests. How­ever it appears that parts of it have evolved into an extension of the wood in­dustry. In the name of rural development and now ‘green’, USFS under USDA has pursued a wood-based industrial policy. What they don’t realize is the damaging impact this is having on the resilience of the US built environ­ment.

Using its political clout especially in wood-intensive states, the industry works hard to protect its interests. The forestry and forest products industry spends about $15 million a year on government lobbying. It made over $6.5 million in political contributions during the 2012 federal election cycle. A small price for having the government work for you.

But our purpose here is not to ‘beat-up’ on wood producers; it is to un­derstand the role they have and still play in disaster resilience. What follows is an example.

‘Check-offs’ have become a popular ways to fund the promotion of agri­cul­tural commodities. Congress provided enabling legislation in a 1996 Farm Bill. For each unit of a commodity product sold, a predetermined fee is paid into an industry-related fund. By law all sellers above a certain annual volume must to conform to it. Although sellers fund the contri­bu­tions, in the end consumers pay it in the price. These funds are then used for research, promo­tion, and education. The most recognized of check-offs has been the milk industry’s ‘Got Milk?’ campaign.

In 2012 the wood industry with help from USDA finalized a wood check-off program. It included both US producers and Canadian import­ers. Its objective was to raise an additional $15-30 million a year in order to promote the greater use of wood.

In a 2008 check-off white paper the wood industry described the chal­lenge it faced as competition from substitute materials has caused ero­sion of market share and from recent gains by concrete in the residential market.  It noted that this is primarily due to durability concerns and the desire for ‘maintenance-free’ products. It stated that the industry’s priority is to assure that building codes allow wood to be used, and that wood is consid­ered by ar­chitects, specifiers and decision makers as often as possible. One goal is to grow the non-residential use of wood and that market share can be gained from steel and concrete.

Therefore consumers would pay $30M a year so the wood industry in turn can better educate and influ­ence them to substitute more resilient materi­als with wood. All thanks to a government program. 65% of the program’s funding is directed toward market development and codes-related efforts aiming to expand non-residential uses such as multi-story wooden buildings.

The program is now in its 4th year. The Softwood Lumber Board, whose 19 members are appointed by the US Secretary of Agriculture, runs it. Current Secretary Tom Vilsack appears to be the industry’s senior gov­ern­ment spokesperson. He recently proclaimed ‘wood to be one of the most advanced building materials’. Presumable he supports taller wood buildings.

In December 2014 a major building fire occurred in downtown Los An­geles with $100 million in estimated damages. It destroyed the 7-story Da Vinci apartment complex, which covered almost an entire city block and damaged surrounding buildings. Arson was suspected. The only sections of the complex that didn’t burn were lower two stories of concrete garage space; the five floors above that were all wood. Fortunately the building was yet unoccupied. Due to proximity, two busy interstate highways shut down for many hours causing havoc for tens of thousands of drivers.

Los Angeles building codes currently allow a maximum wood construction of five stories. Anything higher requires steel and concrete. By the way these were luxury apartments, not low-income ‘affordable’ homes. Build­ers enjoy the greater profit from this code loophole, which allows ‘cheap and weak’ construction. A few opposing elected local officials complain that in a city with severe land scarcity that such mid-rises are inefficient from an urban planning perspec­tive.

Rest assured that AWC and the Softwood Lumber Board are working hard on code variance ‘loopholes’ for even taller wood buildings. In the mean­time thanks to check-off monies, 3-7 story wood buildings are increas­ingly spouting up across the US to the further detriment of resilience.

A month later a $75 million 4-story wood apartment complex, called Avalon in Edge­water, New Jersey burned to the ground. Edgewater is a fast-growing New York metro area community on the Hudson River, just south of the George Washington Bridge. A maintenance plumber’s blowtorch started the fire. The building was occupied and had an operat­ing sprinkler system. New Jersey has adopted ICC’s model code, which uses NFPA’s sprinkler standard. However instead of the full standard (NFPA-13), ICC allows partial sprinkler coverage under NFPA-13R for mid-rise apartments. The fire rapidly spread to areas without sprinklers, engulfing the entire building. 240 apart­ments were lost and about 1000 tenants displaced. Everyone es­caped (ICC would call that a suc­cess) but they all lost their homes and possessions.

This was the second fire to occur at the same complex; the first during construc­tion. Edgewater’s mayor vowed, “We’ll make sure nothing like this is built here again” and that “homes will be rebuilt but they will be of steel and con­crete…”. State legislators subsequently submitted three separate bills to im­prove building codes, limit wood apartment construction to 3 stories and in areas with densities below 5000 people per square mile; even place a two-year moratorium on wood construction until safer codes are adopted. However wood, builder and apartment industry interests so far have prevented the bills from getting through the relevant committees.

The same interests lobbied the New Jersey Department of Community Affairs, charged with building regulations, to not strengthen the ‘consensus-based’ ICC codes in effect. The department made minor edits that fell short of satisfying fire officials and concerned citizens. It may be of little surprise that the heads of both this department and the legislative Housing and Commu­nity Develop­ment Committee served respectively on the Council on Affordable Housing and the Joint Committee on Housing Affordability. It appears again that resili­ence is sacrificed in the name of ‘affordability’.

In contrast, the building code of New York City (like London) prohib­its wood construction, also known as Type V construction, for apart­ments. New Jersey so far denies its citizens a similar level of resilience.

The project’s developer and owner, Avalon Bay Communities, is a pub­licly traded REIT with a $25 billion market value. It has about 82 apartment units in 18 leading US metro markets. With over 20+ new projects, it continues building at a rapid pace, capitalizing on the growing demand for rental hous­ing. Several of these projects are in New Jersey. In order to shore its reputation, the company announced it would apply the stricter NFPA-13 for sprinklers and upgrade its firewalls to masonry concrete, instead of the gypsum boards (also known as sheet rock), allowed by ICC codes.

The company boasts receiving a GreenStar award from the Global Real-Estate Sustainability Benchmark (GRESB), an international organization af­filiated with USGBC. As we will later discuss, all these ‘green’ programs mean very little when it comes to resilience. The company’s 70 page 2014 Corporate Responsibility Report does not once mention the word ‘resili­ence’. Hopefully this experience will serve as a ‘wake-up call’ for its man­agement to go Code+ not just in New Jersey, but also throughout the country. The latest news, however, was that the company is rebuilding the above complex with only minor resilience upgrades.

Unfortunately Avalon is not the only property developer with an investment strategy built on the minimum ICC standards. Many are rapidly populating the urban built environment with vulnerable wood apart­ments. One such example is Crescent Communities, based in Charlotte, North Carolina, with over $1 billion in assets and a large inventory of land. Crescent takes the strategy a step further by flipping many of its develop­ments to resilience-agnostic insti­tu­tional investors (many of which are using your retirement and pension monies).

Crescent focuses on the hazard-prone but growing southern states and takes full advantage of the low standards afforded by codes. In one of their promotional brochures, the wood industry features Crescent as one of their model developers. It highlights a major luxury apartment complex in the Atlanta where a 5-story 275,000sf all-wood structure sits above a concrete garage. The apartment’s type IIA construction has a fire rating of 1 hour. Not much hope of saving anything other than yourself in case of fire.

The project uses wood chemical fire retardants instead of water sprin­klers in many areas. However such retardants are suspected of causing longer-term durability problems. The site claims to have over 4000 tons of CO2 stored in the wood it used. A fire would release most of it in the air in a few hours. Regarding wind the local code allows designing to 90mph. Atlanta is some 250 miles from the hurricane-prone coasts. However the area is known for occasional tornados. The building would not survive even a moderate one.

Crescent claimed to have 19 other projects worth over $1 billion under­way or planned with similar designs. Amongst these is Tampa, Florida, one of most wind and flood vulnerable cities in the US. Tampa’s wind codes are in the 110-120mph range, substantially less than Miami’s. Its buildings would even not survive a Category 2 hurricane. In addition the area is known to have frequent tornados.

Crescent’s $45 million Westshore luxury apartment development is proud to design to these low codes, with elements similar to Atlanta’s. If you have a cookie-cutter that makes money, why not use it everywhere? The company however appears smart not to keep its future liabilities for long. Another earlier completed development, Crescent Bayshore, was flipped to an institutional investor for $111 million. These investors typically focus on short-term financials in their decisions. Perhaps the longer-term minded pension and retirement funds behind them should be the ones concerned. The present system allows non-resilient construction to be very profit­able for material suppliers and developers, which is why we have so much of it.

Looking to build even higher, the wood industry proposes that high-rise buildings use thicker wood sections. The ra­tionale being that fire will only partly char this wood instead of rapidly and totally burning it. The problems however are both its higher cost and the safety of re-occupying a building whose structure has already been charred (similar to driving a ‘charred’ car).

Perhaps the wood industry (along with USDA) should drop the tens of millions of dollars spent annually on studies, promotion, code influ­ence, lobb­ying, and political contributions to grow markets and simply offer consumers the fol­lowing: if during the first 10 years your structure burns down or is lost from high winds, they’ll replace the wood for free. Can they finally stand accountable for what they say and put their monies where their mouth is (Hammurabi would so much approve)?

I bet it’s a risk they will never take. If they won’t take the gamble, then why should the public?

Chapter 15

World’s Wood Powerhouse: Canada Cries Timber

It is no coincidence that a tree leaf graces its national flag. If there is one country that has done the most to assure that it’s domestic and US wood mar­kets are protected and growing, it is Canada.

46% of Canada’s landmass is designated forests and wooded property. At about 4 million square kilometers (km2) it is over half the landmass of the contiguous US. Governments mostly at the provincial level own 93% of it. More than half is located in three provinces: Quebec, Ontario and British Columbia. In terms of softwood tree stock these three account for 77% of Canada’s total. British Columbia with almost 60% of that could be labeled the ‘wood capitol’ of Canada (if not the world).

75% of Canada’s forests, or about 3 million km2, is available for cutting.  About half of that is subject to forest management. Actually less than 1% gets cut annually. During the recent US recession it dropped to half a percent.  Canada has plenty of wood to sell and British Columbia is at the front line of making sure it is sold.

In order to enhance its sustainability image, between 2000 and 2010 Canada made significant strides to certify its forest management practices. Today it leads the world with three times more certified acreage than the US and about eight times more than each of Russia, Sweden and Finland. Certi­fi­cation refers a combination of controlled harvesting, replanting, biodiversity and water quality practices verifiable by a third party.

In recent decades forests in the western parts of North America have suf­fered from a natural disease: mountain pine beetle infestation. In British Co­lumbia alone it affected 160,000 km2 of forests. No cure has yet been relia­bly applied on a large-scale basis. Infected wood is unsuitable for con­struction. As an alternative Canadians now promote burning this wood as a fuel source (hence all the recent biomass ‘green’ buzz).

Canada consumes only 40% of its production. With 60% left to sell it is the ‘Saudi Arabia’ of wood exporters. The US imports two thirds of that, making it Canada’s most important market. The remaining third goes to Asia, primarily Japan and China, which has grown to surpasses Japan. Brit­ish Columbia accounted for 70% of exports, while Quebec and Ontario com­bined were another 20%. The latter two cut back significantly during the re­cession, unable to compete with British Columbia’s lower costs.

Homebuilding is the largest end-use market. Hence Canada has strong interest in US building codes and its wood industry was eager to partici­pate in the US check-off program. It is reasonable to assume that resilience of the US built environment is fairly low on their priorities and concerns. On the contrary, the more hazard destruction the more wood consumption to rebuild.

While Canada successfully exports non-resilience to the US, how well is it doing itself? Many of its regions faced fire, flood and earthquake hazards.

Canada’s Resilience Capacity with regards to fires is low. In just the four-year period 1999-2002 over 150,000 residential buildings caught on fire and 1,200 people died. Economic losses amounted to $3.2 billion and the trend line is moving upward. For a country one-tenth the size of the US in population this should be a serious vulnerability concern.

Yet the political influence of the wood industry prevents its building codes from being strengthened. Even an initiative to collect and report fire statistics on a national level proposed by the International Association of Fire Fighters has struggled for years in Parliament. Special interests have little de­sire for such information to become easily available to the public. Canada’s system for collecting national forest fire statistics is well organized. However it procras­tinates on tracking and reporting fires that affect its own people, while it pre­scribes that they live and work in fire-vulnerable buildings.

Canadian building codes have followed a similar pattern to the US with authority vested in provinces and municipalities. However being a smaller country its approach to model codes has been more unified. Since 1941 its federal government has published one model code called the National Building Code. It is issued by the Institute for Research in Construction, part of the National Research Council of Canada and updated on a 5-year cycle.

Like the US, this model code has no legal status until adopted by the lo­cal jurisdictions. Like the US, local interests mold adaptations and variances. As expected the outcome are weak codes, espe­cially with regards to fire hazards, but also regarding certain earthquake de­signs.

Governments particularly at the provincial level support the wood indus­try in many ways. Since they own most of the forests they have leeway in royalty and timber prices. Traditionally Canadian authorities set prices at a fraction of those across the US border. As a result the industry has received an es­timated $3-3.5 billion (US) in annual subsidies.

In return the governments impose policies that to a large ex­tent control what the industry does. This has included minimum harvest re­quire­ments, domestic processing mandates and restrictions on raw log ex­ports. It prevents industry from adjusting production volumes when market demand cycles. In order to sell the prescribed volume they are forced to export and even ‘dump’ the wood. Where better than on its next-door neigh­bor the US.

Such policies have kept US wood prices artificially low, thereby making it more difficult for more resilient materials to compete. At times they have also placed hardship on US wood producers, who bear higher costs and suffer the brunt of the market volume fluctuations. Most US producers lost money during the last recession, many had to close and some were bought-out at low valua­tions by their Canadian competitors.

The reasoning for such government policies has been to maintain high in­dustry employment in Canada. In our interconnected world, who would im­agine that the social policies of one country can affect the Resilience Capacity of another?  But they do.

Of course the US wood industry has not stood still. The so-called US-Canada Lumber Dispute has been going on for a third of a century. Even for­mer President Carter (from the wood producing state of Georgia) in 2001 said to the New York Times: “Provincial governments grant an annual allowable cut to sawmill owners at whatever low price is necessary to maintain full em­ployment in the timber industry …{this} is beginning to wreak havoc with the timber industry in the United States…”.

Over many decades there have been Department of Commerce negotia­tions, International Trade Commission determinations, countervailing duty as­sessments, settlement memorandums, export taxes, withdrawals, cash deposit requirements, GATT determinations, US-Canada Free Trade Agree­ment re­views, Congressional interventions, agreements, enforcement prob­lems, re­newal failures, more countervailing duties, NAFTA panels, World Trade Or­ganization decisions, anti-dumping duties, US Court of Appeals challenges, more agreements, more compliance issues, international arbitra­tion, more im­port taxes, more arbitration, more violations…and on and on and on.

Finally in October 2006 the parties reached a détente under the Softwood Lumber Agreement, which provides for an ongoing dispute resolution mecha­nism and an arbitration process. It was renewed in 2012 and due to expire late 2015. Nonetheless there continue to be annual challenges, panels, taxes, alleged violations, claims, etc.

Throughout this history it has become clear that Canada has little intention of drastically changing its social policies. While Canada remains a great political friend and ally, on the issue of built environment resilience it has done more harm to its ally than policymakers or the public on both sides realize.

Chapter 16

False Sense of Security: A Culture for Disaster

It is not simply that urbanization increases disaster risk exponentially (our 2nd Law). An equally worrisome symptom it is that it concurrently culti­vates a false sense of security. The real danger lies in the widening gap be­tween the levels of disaster threat and of perceived risk. Let’s further examine.

The more humans detach from nature the more they tend to ignore and downplay nature’s forces. People in rural surroundings and small villages are noticeably more cognizant and respectful of nature in their daily lives and ac­tions. For centuries people in traditional mountain villages knew where and how to build; without official zoning and codes, without engineers and scien­tists, but with a clearer appreciation of natural forces.

Call this ‘micro-resil­ience’. It is a trait lost to urban life. Urbanization produces a fabricated reality of risk, as we reduce contact with nature and increase contact with other people. It has two dimensions:

First, we perceive safety in numbers. We generally feel safer when others are around us. If those others are also doing the same things that we are doing, we feel even more secure in our actions.

Second, urbanization reinforces the omnipresence of and ‘omnidepend­ence’ on government. We increasing rely (and relax) on the notion that gov­ern­ment protects us and is responsible for our safety. Thus when government de­clares something safe, it must be so. Then when things go wrong we ex­pect government to step in, take care of us and pay for excessive damages.

Politicians by trade reinforce this mind-set. All wish to appear in control. Whatever issues we may have, government is capable of ad­dress­ing them. What’s expected of citizens is to follow the rules, pay taxes and help get them get re-elected or otherwise stay in power. For politicians this last is perhaps the most important.

The only problem is that natural forces do not listen to politicians. Nature has the upper (and independent) hand. Betting repeatedly against natural forces is betting against the ‘house’. Continuing to double-down on non-re­silient policies and practices is a sure strategy towards ‘bankruptcy’.

However governments are reluctant to admit when their own policies happen to be the root cause of rising disasters. When nature strikes they in­stinctively shift into emergency response mode and conveniently blame the ‘weather’ or more recently ‘climate’. They emerge to publicly display being in control. The media contributes by sensation­alizing disasters and turning them into ‘distruc-tainment’. In the process, fingers get pointed; promises get made; government and relief aid wallets temporarily open. Eventually some codes improve but not enough. After all the fury has subsided and attention turns to other things, life returns to business-as-usual; only to have the Urban Disaster-Resilience Cycle again repeat itself.

What we don’t realize is that we have been conditioned to seek comfort in the notion that building codes adequately protect us. It’s what builders, de­velopers and many suppliers want us to believe. As we’ve seen, these codes often protect and benefit them more than they protect and benefit consumers.  Politicians usually are apprehensive about contradicting this; perhaps from fear of indirectly blaming themselves even if they were to refuse the continuous temptation of political contributions these interests offer.

Regardless, this course of action is unsustainable. Eventually government (i.e. its citizens) cannot afford the escalating cost of disasters. One solution is relearning to better protect own selves at a grass roots level; going back to mi­cro-resilience. Are we ready to be taken out of our comfort zone, and if so who will help us do it?

Public policies that provide for greater resilience transparency, education and motivation would be more responsible than what we have today. This would mean more widely broadcasting that codes represent only minimum standards and are the unstable outcomes of intense technical, economic and political compromise. Perhaps it is something that should be taught in every elemen­tary school. Particularly when it comes to housing, the most disaster-prone segment, it should be clearly revealed that the main reason codes are kept low is social policy: to assure ‘affordability’ for the lowest income levels.

Whether this is actually smart social policy is something to be debated. Low-income segments are those who can least afford disasters. Is disaster pre­vention really discretionary and voluntary as the ‘weak and cheap’ faction wish us to believe? If yes, then only the wealthy can afford it. Or is it non-discretionary and important that everyone live in a resilient home? If the latter, then we should discuss how we help the lowest incomes afford it.

What we will find is that the benefits of lifting all society to higher levels of resilience are greater than the cost of helping lower incomes categories to afford it; that it constitutes a social win-win. Instead of constantly consenting to the notion that resilience is unaffordable, our public policies should begin to reflect that society cannot afford to live without it.

What level of resilience society chooses is not something to be decided in professional organizations, or ICC, state or local code councils under the pressure of special interest groups. It is something to be decided in open pub­lic debate, as SPUR proposed for San Francisco (chapter 9).

The challenge is that it relies on a public that is better educated on risks, disasters, and choices. Not the education provided by industry promotion and check-off programs, which is mostly what we get today. Most public commu­ni­cation efforts focus on personal survival, taking as given that we will be in a substandard vulnerable building. Perhaps what we lack are public-interest resilience watchdog organizations to educate, chal­lenge, expose and rock the status quo, similar to those that have driven the green movement towards change.

Resilience Capacity will not likely improve until the federal govern­ment adopts a set of responsible resilience policies, as opposed to the patchwork of wasteful contradictions we presently live with.

If you are ready to give up please don’t! As we will next discuss, the US government already successfully accomplished this decades ago when faced with improving the resilience of auto transport.

Chapter 17

Off the Rocky Road: Making Cars Resilient

By now you might feel a bit discouraged and be asking if there is hope for change. My reply is yes. In this regard the history of US au­tomobiles provides useful insights.

As mentioned in chapter 2, we spend most of our lives in buildings.  Transportation is right behind at number two. Actually being in cars is riskier than being in buildings. Half a century ago this risk was many times higher and rising problematically.

In 1965 Ralph Nader published a book titled ‘Unsafe at Any Speed: The Designed-in Dangers of the American Automobile’. It would launch his rise as a public figure. His pioneering book critiqued the safety record of car build­ers and accused them of opposing efforts to improve safety. Trained as a lawyer with brief exposure to government, he had no direct expe­rience in the auto industry. Instead he relied on public materials and in­formation from industry insiders.

He showed examples of how car builders systematically evaded well-founded and technically informed criticism. He exposed the builder’s political pressure opposing and delaying new safety features. At the time General Motors (GM) was the world’s largest car builder, and in one chapter Nader focused on GM’s problematic Corvair model. In another he discussed how the in­dus­try influenced and distracted the ‘traffic safety establishment’ was to look the other way ignoring real safety problems.

The industry, GM in particular, initially tried to harass and intimidate Nader. It backfired. In 1966 GM’s president appeared before the US Senate to apologize for his company’s actions. Nader sued and the court compensation he re­ceived helped launch his consumer rights movement. 13 years later former GM executive John DeLorean admitted in his book that Nader’s criticisms were valid. Car legend Lee Iacocca later volunteered a similar admission.

However not everyone shared his view. Thomas Sowellin in his 1995 book ‘The Vision of the Anointed’ argued that Nader ignored and dismissed the trade-offs between safety and affordability.  That should sound familiar.

The truth is that car safety was a serious problem from its infancy. In 1925 the death rate was 17 per 100 million vehicle-miles travelled. At the time of Nader’s book forty years later it had dropped to 5.3. Even though this decline looked impressive, it was not. Vehicle miles had growth 7-fold. Hence in absolute numbers fatalities had more than doubled approach­ing 50,000 annu­ally. Car builders were content. Nader was not.

A year later the US Congress took action and passed the 1966 ‘Traffic and Motor Vehicle Safety Act’. It established the ‘National Highway Safety Bureau’ (now called ‘National Highway Traffic Safety Administration’) authorizing it to set and enforce national standards for both cars and roads.

If today we enjoy high standards of car and highway safety it is due to the actions taken since then. Its first Director, William Haddon a physician by profession, applied analytical methods to address the root causes of the safety problem rather than focus on symptoms and bandages. Numerous upgrades in the design standards of both cars and roads were established and implemented. These include many of the things we take for granted today: head rests, en­ergy absorbing steering wheels, shatter-resistant windshields, safety belts, just to mention a few. In road design, improvements included curve delinea­tion, breakaway signs and poles, better illumination, opposing traffic barriers, guardrails and much more.

In addition an intense public awareness and education program began. The campaign drew partners including government, schools, business and communities. Today 50 years later the death rate is 80% lower at 1.1 per 100 million vehicle miles travelled. In absolute numbers fatalities have dropped by a third even though vehicle miles more than tripled.

In many ways this resembles the issues surrounding our topic: builders who opposed stronger standards, apply political pressure and hide behind affordability claims. Perhaps what we need is a construction industry Ralph Nader to galvanize change by rocking the dysfunctional system that has severely weakened the resili­ence of our built environment.

Nader raised the banner but the insurance industry did much of the groundwork in advancing safety. For those old enough to remember, some of the most frequent ads on television displayed dummies in cars crashing into barriers. They brought safety right into consumers’ living rooms.

Did implementing better safety features add cost?  Yes

Did it reduce market demand for cars?  No

Did cars suffer in affordability?  No

Did car builders change the ways they did business?  Yes

Did raising the bar for all society benefit everyone?  Yes

Today consumers would not imagine buying a car without these safety features, even if they were to become optional. Family, friends and neighbors would protest and tag them irresponsible.

Instead of obstructing, car builders now actively market their safety ad­vantages. They compete to one-up each other with new and more inno­vative safety designs not yet required by law. The former race to the bottom has turned into a race for the top. Car builders are still mindful of cost and afford­ability but not at the expense of safety.

The 1960s and 1970s were a time when US cars were not built to last.  The business model was early car obsolescence (or destruction) in order to get consumers to repurchase every 2-4 years. That model would prove unsus­tainable, as foreign competition opened consumers’ eyes to longer lasting (i.e. more resilient) cars. What greatly helped was enhanced public transparency, widespread education and easy-to-understand third-party performance metrics on safety, quality and performance.

Today everyone produces longer lasting, better performing and lower maintenance cars. Car builders put their money where their mouth is by in­cluding multi-year warrantees. The car industry exhibits significantly more accountability and is held accountable for major defects over a significant portion of a car’s useful life (Hammurabi would love it!).

Are insurance companies exiting the car insurance segment? Do rates change abruptly after a ‘bad’ year? In fact more have entered and compete aggressively for customers’ business. Even Google is rumored to be entering. There is absolutely no need for the government to get into car insurance or for taxpayers to bail out money-losing schemes. All due to the fact that under­lying risk causes are well understood and managed—because government actually performed what it was supposed to: to cause the products to become more resilient.

Can what was achieved in car and road safety be duplicated to make buildings more hazard-resilient? I believe it can. Three differences make this more challenging in the built environment:

  • A long history of fragmentation and territorial protectionism
  • Many dispersed builders, as opposed to a few large companies
  • A less controllable building process

However these obstacles are not insurmountable and should not stop the federal government from acting.

In 2010 the Insurance Institute for Business and Home Safety (IBHS) opened a one-of-a-kind $40 million crash-test facility in South Carolina. Wholly funded by property insurance and reinsurance companies, it aimed to show how multiple full-scale one and two story homes and commercial buildings actually behave when ‘crashed’ into natural hazards. These haz­ards include hurricanes up to category 3 (130 miles an hour), rain, hail­storms and wildfires. Its impressive test chamber is 21,000 square feet in size and six stories tall.

During the last five years IBHS’s crash tests have demonstrated that many of the codes and building practices in-place fail to protect people and property. The results have been shared with builders, materials suppliers and public officials. Only the general public has yet to gained wide­spread awareness of this, as the results have not been broadcast.

How long will the insurance industry wait before these crash tests are placed on television and other media and brought directly to consumers’ homes? I believe they first aim to build credibility, give policymakers time to react and to work with the building community to affect change. How­ever if that fails, I hope they are ready and willing to do what they success­fully did in auto safety that spurred public awareness, education and reaction.

If the federal government is really committed to resilience they should do the same. In fact wouldn’t it be appropriate if the government required the building industry to pay for such a public awareness campaign using some of their check-off and promotional funds—similar to what they did with the to­bacco industry?

When consumers realize just how unsafe their built-to-code homes and buildings are and learn about the availability of risk-smart choices, maybe they will become more resilience-minded buyers. Builders will no longer pose the excuse that buyers are not willing to pay for more resilient buildings.

IBHS is not only testing the inadequacy of current building codes and products, but is also demonstrating how cost-effective upgrades can make new and existing homes and buildings better. Testing new products and applications should help spur more resilience innovation in the construction industry.

IBHS is asking ICC, the states and municipalities to quickly adopt these better practices into codes. But the ‘arteriosclerotic system’ is clogged with inertia. Only rising public awareness and pressure will force action on codes.  However IBHS is not waiting for code improvements. It has created its own code-plus resilience standard, called ‘Fortified’.

A new home or building can be built, or an existing one retrofitted, to a Fortified standard. Owners of Fortified properties enjoy greater safety and resilience to hazards which generally correlates to lower operating and maintenance costs. They also benefit from reduced insurance premiums in states where this is allowed by insurance regulators. Such buildings deserve additional benefits and incentives such as favorable permitting, financing, taxes, appraisal, resale value and image.

In fact a 2012 study conducted by Florida State University concluded that homes built to the more resilient 2002 Florida building code commanded a 12.3% higher resale price, compared with those grandfathered in from weaker past codes. This gets more so in the years following a major disaster. A strong signal correlating resilience to building value. However for most homebuilders treading down the beaten road like dinosaurs is all they know.

Ralph Nader simply shed a public floodlight on the dark and murky area of car safety that plagued society. Today we should all be thankful to him for doing that. Shedding that same type of public floodlight on building practices and its players is what we now need to pull us out of our current non-resilient and destructive rut.

Chapter 18

Pioneer Who Saw the Light: Story of John Freeman

John Ripley Freeman was born in 1855 on a farm in Maine. He earned a degree in civil engineering from MIT in 1876 (only 15 years after the school’s founding). After working 10 years at a local water and power company he joined the Associated Mutual Fire Insurance Company in Boston as an engi­neer and inspector. At the time insurance com­panies were mainly concerned with fires.

It was an exciting period as the emergence of electric power and abil­ity to pump water offered new solutions to address the menace of urban fires. Freeman applied his engineering skills to analyze fire prevention and control. Part of his time remained engaged with municipal water management, both as a consultant and volunteer. It would follow his life-long commitment to public service.

By 1896 he had become President of the Manufacturers’ Mutual Fire Insur­ance Company, a position he would hold for the rest of his life. Over the next 35 years the company grew nearly 50-fold and became very profitable. Loss claims dropped by 93% while policyholders’ dividends rose to 96% of premiums.

Freeman called insurance his vocation and engineering his avocation. He applied technical know-how to assess and reduce risks. His strategy was to marry engineering practice with insurance principles.

Following the 1906 San Francisco earthquake he became keenly inter­ested in earthquakes. He studied the subject and initiated collaboration with Japan. This included travelling extensively to other countries to study the causes of seismic building failures.

Freeman authored numerous books and papers, including ‘The Safe­guard­ing of Life in Theatres’ (1905), ‘The Fire Protection of Cities’ (1915) and ‘Earthquake Damage and Earthquake Insurance’ (1932). He served as President of the America Society of Mechanical Engineers in 1905 and the American Society of Civil Engineers (ASCE) in 1922. He helped to found the National Fire Protection Association (NFPA).

In his public service capacity he consulted to many countries, cities and projects, including the Panama Canal, Charles River Basin (Boston), China (Yellow River, Grand Canal), California and Chicago. After visiting hydraulic laboratories in Europe he helped establish the first national hydraulics lab.

Later in life he would receive many awards, recognitions and honorary degrees. He was offered the presidency of MIT but declined, preferring to remain a businessman. He served on MIT’s board for 40 years and helped design its new campus in Cambridge.

His winning strategy continues to this day at FM Global, the eventual successor to his original business. Now a major commercial and industrial insurer in 130 countries it has $6 billion in gross premiums, of which a quarter are out­side North America. As a mutual insurance company its policyholders own it.

FM Global insures a third of Fortune 1000 companies in North America and 27% of commercial and industrial facilities worldwide. Its mar­ket focus is corporate, industrial and large institutional properties. Its ap­proach to the insurance business remains non-traditional. While most property insurers assess risk and calculate premiums using actuarial (i.e. probability) models based on historic data, FM Global employs engineering analysis to assess, reduce and manage its customer risks.

FM Global’s mission statement notes its belief that the majority of prop­erty losses are preventable. At a 1600-acre Research Center in Rhode Island it tests construction products against wind, fire, water and explosion hazards.

The results show –following Hurricane Katrina clients that followed FM Global’s code-plus recommendations sustained eight times less damage than those that did not. Most property insurers simply play a financial game of ‘probabilistic’ risk gambling. FM Global’s approach to insurance is ‘deterministic’, i.e. it invests in the known certainty of resilience.

When you under-design to a hazard, as most building codes prescribe, the only thing you can hope for is that the hazard will miss you (call it ‘struc­tural’ risk). Essentially you are at a gambling table betting against nature. When you adequately and properly design to a hazard you gain a high level of certainty that you can withstand it. The only remaining uncertainty (call it ‘re­sidual’ risk) comes if you’ve missed or forgotten something, or you somehow make a human error. Ultimately that is what FM Global aims to insure against.

The record proves that it works. Insuring those who gamble with structural risk is bad business, while insuring residual risk is smart busi­ness. Structural risk needs to be addressed through technical solu­tions, not insurance. Structural risk is what was significantly reduced as cars became safer. However today’s building codes still contain a high level of structural risk.

Business Insurance magazine’s 2013 Buyers Choice awards named FM Global the best commercial insurer overall and best for service and expertise.  Property Casualty 360 –National Underwriter magazine’s 2013 Risk Manager Choice Awards gave FM Global a top rating in nine categories. In 2008, Eu­romoney magazine named it ‘Best Property Insurer in the World’.

Interestingly Shivan Subramaniam, CEO since 1999 and chairman since, is an engineer (me­chanical) with a management degree from MIT; over a third of FM Global’s 5000 employees are engineers. Its 2013 annual report notes that a key to our long-term success is the commitment we have with our clients to make their facilities and businesses more resilient.

FM Global encourages and assists its policyholders to invest in Resili­ence Capacity. It has repeatedly demonstrated that these investments pay off. In 2013 FM Global returned $435 million to policyholders, the high­est ever. Since 2001 over $2 billion has been returned. Compare that to NFIP, which in attempting in insure structural flood risk has drained US tax­payers.

The report highlights several customer case studies.  One talks about how EMC (a major data storage supplier) planned its new operations facility in In­dia. It notes that: ‘EMC and FM Global met at the outset of the project and stressed the importance of building above local standards.’

This is in sharp contrast to the ‘sick child’ of resilience, US hous­ing, which has led to a problematic and unsustainable residential prop­erty insurance market.  FM Global prefers to not be in this market. Why?  Be­cause the residential market is caught between inadequate building codes and politicized, inflexible (often ignorant) insurance regulation.

Indeed it may not be practical to have a team of FM Global engineers look at each and every house. But you don’t have to. Sound technical princi­ples can be applied to make building codes properly do the job. However the current consensus-based building code system, for the enormous time and re­sources it consumes, has failed to deliver on reducing structural risk. A combination of shortsighted public policies, misguided officials, and benefiting private interests have consistently diluted residential building codes and created a hazard-vulnerable built envi­ron­ment… at the public’s ex­pense.

That is precisely what IBHS and the insurance industry are now targeting to correct.

Chapter 19

Predicting the Unpredictable: Limits of Sharing Our Problems

Insurance is probably one of the least understood human activities. It seems intuitive that sharing a bad situation among a larger number of people is better than bearing it alone. ‘Better’, unless the sharing causes all (or many) to collectively un­der­estimate hazards and generate structural risk.

As will be explained, property insurance differs from all other forms of insurance we are accustomed to, such as car, life and health. However it has been treated and regulated as if were the same. Only recently have we realized what a terrible mistake this (unfortunately many recede into denial while new entrants remain ignorant). Let’s examine a simplified model of what it’s really about.

Assume 1,000 polices are contracted for $100 coverage with a $1 annual premium each. Also assume average historic loss probability is 0.8% annu­ally. Therefore if history repeats itself, over 10 years the insurer will collect $10,000 and payout $8,000. This leaves on average $200 a year for operating costs and return on invested capital.  So far it looks easy.

However this all relies on the assumption that historic hazard averages will re­peat themselves. Even if eventually they do, in the near term they could fluctuate wildly (especially if the risks are structural). Say that annual loss range varies from 0.2% to 2%. What happens if the next 5 years of losses turns out to be 1%, 2%, 0.6%, 1.2% and 0.8%, averaging 1.12% or 40% above the historic average?

Assume invested capital is $5,000 or 5% of total insurance coverage ($100,000). Also assume that investment income covers operating expenses and that the cost of capital is 8%. If we do the numbers, the business is in trouble by year three and bankrupt (i.e. lost all its capital) by the fourth year.

If the loss trend-line is heading up (due to urbanization and coastali­zation), relying on historic averages will al­ways bankrupt the business; even if we recapitalize and constantly raise pre­mi­ums. Unless we somehow address structural risk and bring down these loss spikes (reduce the loss volatility to just residual risk) the model won’t work. Multiple parallel drivers are working against: non-resilient behavior, urbanization, hazard range vola­tility and occa­sional ‘freak’ years outside the range, like a 3, 4 or 5% loss. Plus facing a com­plain­ing public and obstructive regulators when proposing to raise premiums post-disaster, or being pressured to reduce rates following a few uneventful lucky years.

In contrast, ever wonder why insurers just love car and life insurance? Why are there no GEICOs and Progressives out-promoting each other on television, radio and the web to sell you their property insurance? In many US states insurers are leaving, avoiding or limiting the residential prop­erty business. What makes these insurance areas different from property?

The reasons:

  1. People tend to be more predictable as a whole than nature
  2. Most of the risk in car and life insurance is residual rather the structural

In other words the structural risks in car and life have been significantly reduced over the past century. Medicine has eradicated any deceases and life expectancy continues to rise. Public health has improved. Anti-smoking cam­paigns are working and insurers can rate smokers as riskier. Car and roads are safer. Police enforce against unsafe driving behaviors. Actuarial analysis based on historic data works well in predicting car and life losses within a narrow range of variation. No wide fluctuations and ‘freak’ years.

In the property world major disaster fluctuations have become the norm. Losses can easily double and triple from one year to the other, while the chance of this happening in car and life is nearly zero.

With the current state of built-environment vulnerability, hazard losses are becoming unpredictable, which also means uninsurable. We have no idea what will hit us from one year to the next with a built environment in a poor state to withstand the impact. Yet a large segment of government and the public still believe that insurance and disaster response are the solutions. Who is going to tell them?

Nassim Nicholas Taleb is an eminent US-based academic, philosopher, investor and author. In his 2007 bestseller The Black Swan, he discussed how we better prepare to face unexpected and high impact events. A ‘black swan’ event is one that:

  1. Surprises the observer
  2. Has a major effect
  3. Is rationalized by hindsight as if it could and should have been expected

The last point is particularly interesting. It means the information already exists suggesting that a black swan can happen but is somehow ignored or unaccounted for in our risk thinking. Much of what we experience today re­gard­ing disasters relates exactly to that.

Taleb argues there is little hope in trying to predict exactly when and where such events will occur. Plus that risk-sharing mechanisms do not work with black swans. The best way to compensate for them is to build overall robust­ness (he calls it antifragility); in other words build Resilience Capacity.

His theory essentially denounces the widespread use of normal probabil­ity distribution (which forms the backbone of traditional risk analysis) as having failed to protect us from extreme events. Collective statistical thinking re­garding natural hazards has repeatedly proven to underestimate risk. It only generates a deceptive sense of comfort and relaxes us into relative inaction (i.e. acts as a tranquilizer).

Consensus-type thinking (a la ICC, State Code Councils, etc.) is by na­ture bell-curved and never takes a proactive position on unpredictable black swans. US building codes have fallen into this trap. Meanwhile the infor­mation suggesting that black swans are coming is all around us… although the ‘system’ continues to not see or account for it.

Taleb concludes that black swan events do not necessarily surprise eve­ry­one. A black swan event for a turkey is not the same event for its butcher. The objective is to avoid ‘becoming the turkey’. Identify the vulnera­bilities and act in advance to ‘turn the black swans white’

Unfortunately with regards to US disasters the ‘turkey’ incidence fre­quency appears to be on the rise, while the system continues keeping us tranquilized.

Chapter 20

Investing or Gambling: A Brief History of Insurance

In a 2007 New York Times Magazine article ‘In Nature’s Casino’ well-known Wall Streeter-turned-author, Michael Lewis (of ‘Liar’s Poker’ fame), describes how catas­tro­phe insurance is becoming the ultimate gambling hall for heavy rollers. The problem is that many of these players to a large extent gamble the public’s savings.

The history of insurance follows the history of urban disas­ters. Many of the challenges and limitations we face today are the outcome of this evolution. Therefore we will take some time in this chapter to analyze and understand it. Like many other things it was born in fire.

Property insurance emerged from early-day trade and marine insurance and initially only covered fire. The 1666 London fire seeded the industry’s beginnings. A 1667 plan for the new city included a location for an Insurance Office even though one did not exist. In 1681 economist Nicholas Barbon created the first such company to insure newly built brick homes under­writing about 5,000 buildings.

Soon more insurers emerged. Some were mutual companies owned by policyholders, while others were joint-stock companies owned by investors.  Most employed their own individual private firefighting service (a public one had not yet been created). They marked buildings with their signs for easy recog­nition. If the building on fire was not insured by them they ignored it. Eventu­ally they pooled equipment and resources to establish fire stations dis­persed at various city locations, setting the foundation for future municipal fire ser­vices.

In Colonial America Benjamin Franklin helped advance the practice of insurance. He promoted the concept of a perpetual insurance, where an up­front lump sum premium insured the property against fire for life. In 1751 he founded one of the first mutual insurance companies and took a lead in warn­ing the public about fire hazards. Interestingly, his company refused to insure wooden buildings as too risky (how insightful).

Port cities housed most of the cargo and marine insurance companies.  In the early 1800’s frequent wars caused recurring shipping interruptions and em­bar­goes. This, plus the emergence of domestic manufacturing, prompted them to expand into property fire insurance. These policies now covered both build­ing structures and their contents.

Through the mid-1800’s insurers focused on individual local markets. Some had agents in other cities but many states discouraged competition from out-of-state companies by taxing their premiums. Then in 1835 a devastating fire in New York City’s business district caused around $20 million in losses. 23 of the 26 local insurers went bankrupt. This taught insurers the important lesson of risk diversification.

They realized the fastest and least costly way to grow was to engage agents in multiple cities. By 1860 the system of local insurers had been mostly replaced by national companies with networks of local agents.

Barriers of entry into the industry were low. States adopted uniform incorporation laws with low capital requirements. The number of com­pet­itors mushroomed and so did price cutting of rates. Premiums were based on short-term costs without considering the impact of occasional major fires. Thus when such events did occur, many policyholders were left with worth­less policy papers. The system was dysfunctional.

Thus began the industry’s efforts to control premiums. In 1866 seventy-five insurers formed the National Board of Insurance Underwriters. It created local boards throughout the country to set uniform rates. However four years later the effort fell apart.

The high incidence of insurance failures and need to protect consumers triggered the beginnings of industry regulation. In 1850 New York and Massa­chu­setts became the first states to codify insurance laws. They adopted a $100,000 minimum capitalization level, which soon would again prove insuf­ficient to cover major fire events.

By 1860 four states had established insurance departments headed by a commis­sioner. Two decades later the number had grown to 25. In states without a formal department, the state treasurer or secretary of state would act in this capacity.

An 1868 US Supreme Court decision confirmed the states’ role in regu­lating insurance by declaring that it was not interstate commerce. Hence for many decades insurance would be exempt from federal regulation.

The 1871 Chicago fire caught insurers and government by surprise. It was a bona fide black swan. In hindsight, there was plenty of evidence to predict it was coming (just recall London). About 50% of burnt properties were insured. Insurance losses amounted to $100 million. Almost 200 insur­ance companies did business in Chicago at that time; 68 went bankrupt. The capital of those surviving was severely crippled. Policyholders on average received 40 cents on the dollar.

A year later another fire in Boston destroyed its entire mercantile district. Being commercial, 75% of it was insured and insurance losses totaled $50 million. Policyholders received 70 cents on the dollar. 32 companies went bankrupt. This was a second blow in two years for the industry.

Realizing that premiums were inadequate for the low resilience of the built environment insured, the industry made a second attempt to set rates. In 1875 the National Board was revitalized with 1,000 local boards. They were organized into districts and states with the National Board being the final rate arbiter. However local agents accustomed to setting their own rates opposed this top-down structure. The effort again collapsed in the eco­nomic recession that followed the financial crisis of 1873.

Finally in 1877 the industry made its third attempt. They dismantled the cen­tral bureaucracy and let agents set up independent local rate-setting cartels. The National Board was purposed to collect statistics and promote fire preven­tion; it worked. By the mid-1880’s almost all rates in the US were set by these cartels.

The rapid growth of commerce and property investment during this pe­riod con­trib­uted to the scheme’s success. This growth spun a mutual interde­pend­ence amongst agents. Insurers had been shell-shocked from earlier losses.  Each agent represented multiple insurers, but each insurer desired only a fraction of the risk in a particular property or city block. It was thus com­mon for agents to collaborate in bringing together a dozen or more different insurers just to insure a single large property. Since they shared the business they had very little incentive to compete on price. Those who refused to coop­erate were shut out of deals.

The higher rates that prevailed helped stabilize the industry and allowed for occasional unexpected large losses. The local boards proved durable even through economic downturns. They also enabled something else to begin.

The ‘science’ of fire insurance was still in its infancy. Local boards be­gan inspecting properties and develop methods for rating building risk. Some even created rating systems with incentives. They would penalize properties for fire defects and reward them for improvements. This departed from the customary approach of agents setting rates based on their personal and idiosyncratic local knowledge. Within local boards, agents began com­bining their personal knowledge with objective data. It formed the begin­nings of actuarial science that the industry would later come to heavily rely on.

Policyholders however were unhappy with the higher rates and many com­plained to state legislators. In 1885 Ohio became the first state to pass anti-compact laws forbidding the industry from colluding on rates; by 1906 nineteen states had voted on similar laws. However these proved inef­fective; insurers simply set up private rating bureaus to propose ‘advisory’ rates that were generally followed by the industry.

The 1880’s were a period of rapid economic growth and building expansion; insurance coverage grew 50%. By 1890 60% of burnt properties were insured. This would remain level until the 1910’s when it rose to 70%. Keep in mind that most of this growth was in the northern states, mostly away from immediate coasts. In the pre air conditioning world, the more hazard-prone south had yet to be discovered.

In the 1900’s, two disasters—the Baltimore fire and the San Francisco earthquake—would put insurance to the test. These would demonstrate how much stronger and more stable the industry had become.

The 1904 Baltimore fire caused $55 million of insured losses. 90% of claims were paid and only few companies went bankrupt. The 1906 San Francisco disaster was many times more severe. The earthquake set off fires that burned for three days destroying over 500 city blocks. Losses amounted to $350 million of which two-thirds were insured. However it was less of a black swan because the industry was financially prepared. 90% of claims were paid. Only about 20 companies had to suspend business, some just temporarily.

The industry’s good performance in Baltimore and San Francisco caused state governments to reconsider their views on collaborative rate setting.  However they were still under pressure from policyholders. Many states aban­doned anti-compact laws. Instead, they either set uniform rates them­selves or approved industry-determined rates. In 1909 Kansas was first to pass a rate-setting law. The industry challenged the law’s consti­tution­ality and took Kansas to court. In 1914 the US Supreme Court ruled in Kan­sas’ favor. It declared insurance to be a public good subject to price regulation (similar to electricity).

New York was the most important state for insurance. In 1911 it passed a law less strict than Kansas’s. The law was influenced by a legislative inves­tigation under the Merritt Committee. A 1905 legislative committee had uncovered financial corruption and profiteering in the life insurance business. Some legislators expected to uncover similar improprieties in the prop­erty insurance industry, but they didn’t. In 1911 the Merritt Committee concluded that the property insurance business was actually still only moderately prof­it­able. It suggested that cooperation among firms often was in the public inter­est and recommended that industry boards (and bureaus) continue to set rates with state oversight.

While New York’s law preserved the boards, it also focused on prevent­ing discrimination, i.e. requiring similar rates for similar properties. Rates set by boards would be submitted to the state for review. However for the first time the law also required the submission of uniform statistics. Many states followed New York’s approach and by 1920 twenty states had legislated some form of similar insurance regulation.

The requirement to collect and submit statistics had far-reaching conse­quences for the industry. Since almost every major company did business in New York, the state’s law had national implications. Thus the need for a uniform classification system was born.

In 1914 the industry created an Actuarial Bureau within the National Board to collect and submit data to states. Working with insurance commis­sioners it established industry-wide uniform classification standards. The reg­ular collection of uniform data propelled the development of actuarial science in the fire field.

The non-discrimination concept introduced by New York put the in­dus­try on the slippery slope of eventually not distinguishing risk differ­ences between similar category properties; something it would eventually pay for dearly. It drove insurers to rely more on actuarial analysis rather than the ac­tual technical risk conditions of insured properties. The subsequent extension of actuarial methods from fire to other hazards would prove disastrous, as wind, flood and earthquake hazard would prove to be less predictable actuarially compared to fire.

As greater use of non-combustible construction, prevention systems and fire protection prevailed in US cities, major fire disasters became a thing of the past. One of these fire prevention solutions was the use of asbestos. NFPA recommended it and building codes insisted on it. Half a century later they would all come to regret it.

Other insurers began offering coverage for wind, flood, hail and other hazards. However, typically a different insurer underwrote each individual hazard with rates set by different bureaus, while agents did the packaging.  Most states had not yet permitted single insurers covering multiple perils.

1944 would be the industry’s next major milestone. The federal govern­ment filed an anti-trust suit against the Southeastern Underwriters Associ­ation (which set rates in the Southeastern US) and the Supreme Court found the as­sociation to be in violation of the Sherman Act. Thus for the first time property insurance would be subject to federal regulation. Inter­estingly that same federal logic was never extended to matter of building codes, the industry’s underlying risk driver.

In response, the following year Congress passed the McCarran-Ferguson Act. It allowed states to continue regulating insurance, as long as they met certain federal requirements. The industry was exempted from certain anti-trust pro­vi­sions. The National Association of Insurance Commissioners (NAIC) was given three years to develop model rate development laws for the states to adopt.

In 1946 the NAIC approved model rate laws that required prior state-by-state approval going in effect. During the 1950s all states passed rate laws, but many deviated from the model. Some states allowed individual in­surers to propose rates that could differ from bureau recommendations, while oth­ers required that bureaus set common rates for everyone. The industry tried to preserve the bureau rating system for as long as possible, but this was already in decline.

A building boom followed World War II. Single-family home starts more than doubled in the 1950’s compared to the 1940’s. Urban sprawl was in full swing. This allowed homebuilders to get away from the stricter building codes of urban centers, and apply semi-rural standards..

The number of homes erected during the 1950’s were as many as those built during the entire 30 years prior. Also the advent of air conditioning triggered a long-term migration from the north to the more disaster-vulnerable Sunbelt. A third trend that started was increased migration to vulnerable coastal areas. Below are private US single-family starts by decade (million):

2010’s5.4 (pace based on 2010-2014 data)

Consumers wanted bigger houses and constant prices, and homebuilders found ways to cut cost by building lighter wooden structures. Since mort­gages required insurance, insurance demand surged. However, writing single peril coverage in a growing market was no longer cost-effective or efficient for the industry.

Consumers, now joined by homebuilders, pressed legis­la­tors for lower rates. As a result states began to change laws allowing insurers to underwrite multiple perils. In 1950 Philadelphia-based Insurance Company of North America introduced the first multi-peril homeowner’s policy. It prom­ised 20% savings, compared to buying the coverages sepa­rately. It advertised:

Brand-new idea in insurance! The new Homeowners Policy of the North America Companies protects you against loss caused by fire, theft, lightning, wind, explosion, hail, riot, vehicle damage, vandalism and smoke. Here, in a single policy, homeowners are provided with essential insurance at a price considerably less than the four separate policies it replaces.

Notice it did not mention flood or earthquake. Insurers were already worried about the growing risk of flood hazards (to the disbelief of govern­ment). Soon oth­ers would join the new multi-peril homeowners insur­ance market and a new rate bureau was started. Agents disliked it because they earned lower commis­sions compared to the traditional practice of bundling these coverages them­selves. However the policies proved very popular with consumers. Premium sales grew from zero to $68 million in 5 years and to $1.5 billion by 1965, while fire and other single peril markets stagnated. Multi-peril quickly became—and to this day remains—the largest segment in US property insur­ance approaching $70 billion annually.

In the never-ending policy cycling between more versus less insurance competition, a 1959 US Senate committee (named O’Mahoney) declared that com­pe­tition should again (deja vu) become the main regulator of the industry.  This gave states the ‘green light’ to make it easier for individual insurers to deviate from bureau rates, which essentially meant dropping rates. During the 1960s the regulation developed along two paths. A majority of states moved toward greater rate competition, while few continued to adhere to a strict rate ap­proval system. This all would eventually come to undermine the industry’s financial strength.

During the 1960’s competition intensified in the multi-peril residential market. It pushed down premiums making it one of the least profit­a­ble insurance segments. However markets were growing fast and insurers valued and defended market share. Since a major loss event had not occurred since San Fran­cisco, disasters were not high in their minds. They were now finan­cial and marketing firms, with little technical understanding of the buildings they insured. They sat comfortable, jostling from time to time with government, but generally feeling secure. With short memories the industry was mov­ing in the wrong direction.  Regulators were also relaxed and content that consumers were getting low rates.

Both industry and government ignored the rising risk caused by rapid ur­banization, migration patterns south and to the coasts, hazard-vulnerable sprawl and stagnation in building codes. All were rapidly undermining Resil­ience Capacity (the 2nd and 3rd Laws). The entire housing sector was being predominantly erected using cheap wood. What they failed to see was the black swan that 25 years later would literally blow them off their seats.

Rating bureaus themselves began to consolidate. By the 1970’s the rates they provided were merely advisory. Insurers could either use them or de­velop their own. These advisory organizations continued to provide re­quired statistics to states. They also provided easy access to (and in retrospect opti­mistic) information for new industry entrants. One of the largest bureaus the Insurance Services Office became a for-profit corporation in the 1990’s, thus no longer under the control of the insurance industry. It would later develop a rating system for building code effectiveness (Building Code Effectiveness Grading Schedule) that provided limited insight on how bad the building code system really was.

The main problem was that all the actuarial analyses that insurers now relied on were based on decades of data devoid of major disasters. They relied on these statistics rather than what was really happening with buildings them­selves. Isolated in their actuarial ‘ivory towers’ they missed the visible evi­dence that buildings and communities were rapidly becoming riskier. For decades this misdirected analysis fueled intense market competition that caused the industry to underprice risk. The perfect storm was coming, and as Taleb would say, they had become the ‘turkeys’.

In 1992 hurricane Andrew shocked the property world. A bona fide black swan of this magnitude with the industry completely unprepared had not occurred since Chicago. It caught everyone by surprise. In hindsight the in­formation was there (the buildings themselves) that could have predicted it.

However residential insurers had stopped looking at actual buildings since the days of the local boards a century earlier. They literally had no idea what they were insuring. Their primary reliance was on the actuarial data they were being fed. They were now finance, legal and marketing organi­za­tions. John Freeman would have shaken his head and told them that property insur­ance is not about finance; it is about engineering.

Andrew’s insurance losses reached an unprecedented $16 billion. 11 in­surance companies went bankrupt. Another 30 lost more than 20% of their surplus capital. Almost a million policyholders were left uninsured. Insurers now were at a loss on how to assess and price property risk. Their mod­els had failed them. While they were looking the other way, the built environment they insured had become less and less resilient.

Most insurers simply exited the state. They ran but could not hide.  What they never realized was that in coming decades several black swans would return to haunt them, first in New Orleans and later in New York/New Jersey. When it came to insuring homes the industry was ‘driving blind’.

Even today their legacy information systems lack the necessary data on the resilience of specific properties they insure. Most are still unable to inte­grate the local knowledge of their agents and inspectors. Instead of actuaries they now depend on the ‘black boxes’ of 3rd party risk modelers. In addition, privacy regulations, anti-trust legacies and competitor rivalry further limit their ability to share, use and make transparent critical information even at aggregate statistical levels. It handicaps them from properly assessing risk and keeps consumers in the dark. It is a situation that certainly no longer serves the public interest. However policymakers and regulators have not come to fully ap­pre­ciate this.

What is most alarming is that no one knows the aggregate profile of US buildings destroyed or damaged from hazards. No one collects na­tion­al, regional or even by major event statistics on the type, age and con­struc­tion characteristics of such buildings. FEMA and state insurance regula­tors do no require it. At best insurance companies have pieces of the total puzzle but there are no mechanisms for sharing or combining information. Transparency is nonexistent. All we hear are big loss numbers. As a result the public is gener­ally unaware as to which buildings in the same area have greater or lower hazard risk. Until this is addressed we will continue driving in the dark.

In a later misguided diversion, Congress passed the 1999 Financial Mod­ern­ization Act allowing banks and securities firms to combine with insurance.  The financial industry convinced the government on the theory this was good policy. In ten years the financial collapse would show that it was a bad idea. Instead of making insurance less risky, it exposed policy­hold­ers to the ill-conceived financial risks that banks and security firms were tak­ing.

The small commercial insurance market pretty much followed the path of resi­dential. Insurance of large commercial, institutional, and indus­trial proper­ties took a different healthier direction. This market benefited from less disto­rtion coming from affordability-driven insurance regulations and build­ing codes. It enabled more direct interaction between insurers and edu­cated buyers to simul­ta­neously manage risk and cost, to the benefit of both parties. It helped companies like FM Global prefect their more technical approach to risk management.

Were regulators sleeping at the wheel? Overall insurance regulation has evolved into a major revenue source for states. In 2000 it generated over $10 billion in fees, licenses, etc. Only about 8% actually went to pay for insurance regulation costs. The remaining 92% poured into the states’ general coffers to be spent elsewhere. State governors appoint most commissioners, though in some states they are elected.

Regulators see their primary role as protecting consumers, which typi­cally means a combination of keeping insurance companies solvent, prevent­ing outright fraud and keeping rates low. However they also suffer from short memories and reliance on models. They do not see their role as managing the underlying structural hazard risks.

Regulators also became increasingly relaxed with the notion that govern­ment would bail out consumers when insurers fail. As government assumed a bigger role as the ultimate insurer or source of relief funds, regulators increasingly narrowed their focus to keeping rates low (something they never realize increases consumer risk taking). When a few years pass without disaster, consumers tend to forget inherent longer-term vulner­a­bilities and demand lower rates. They pressure officials who fail to acknowledge that the next major disaster may be lurking just around the cor­ner.

Today the property insurance industry itself is going through another cy­cle of near-term self-deception under the watch of reg­u­la­tors. Three years have passed since Sandy without a black swan. In an environment of high premi­ums, low short-term losses and low interest rates investors are rushing in (recall Elvis’ lyrics ‘…fools rush in…’), putting downward pressure on pre­mi­ums. While underlying real risk driven by declining Resil­ience Capacity contin­u­es to rise, the short-term price of risk, driven by financial markets, is declining. They will again get burnt like investors past, when the next major US disaster event likely breaks the $100 million loss mark.

This divergence between medium-term risk and short-term risk pricing should concern to regulators. However they are caught-up in their role as price bargainers to visualize the dangers ahead. It would be better if regu­la­tors required insurers to deposit the premium spread between lower short-term and expected higher medium-term losses into a ‘black swan’ rainy-day fund.  But nobody trusts that government wouldn’t occasionally plunder such funds to pay for things unrelated.

An additional impediment is that property represents a small portion of the insurance universe that regula­tors supervise. They have little time and even less knowledge to engage in critical risk reduction issues such as raising built environment resili­ent. Borrowing from life insurance, many view making risk distinctions between properties as dis­crim­inatory. They also are often wary of consumer penalties and incentives regarding risk. Of course if prevailing rates already underprice risk, there is little ability to lower them even further for resilient buildings.

Furthermore regulators do not encourage or create an enabling environ­ment for insurers to collaborate in raising resilience awareness in the market­place. In­sur­ers typically have not collaborated with each other on local risk reduction for fear of anti-trust laws.

NAIC collects a plethora of statistical data and publishes many reports and studies for members and the public. It tries to address disaster and code issues amongst regulators, even nudging them to more directly promote these within their states. However little has actually been ac­complished.

In conclusion, property insurance gen­er­ally lacks a partner in govern­ment to properly address what should be the shared objective of re­ducing built environment risk. Ironically, today the wood industry gets more gov­ern­ment help in creating disaster risk than the insur­ance indus­try gets in reducing it.

Chapter 21

Color Blind: Fifty Shades of Green

One of the major challenges with sustainability is measuring it. Espe­cially if the aim is to motivate, recognize and reward in order to influence decisions and behavior. Most buildings experience so far has been along the ‘green’ dimension of sustainability.

The US Green Building Council (USGBC) is a non-profit organization with the greatest impact on ‘green’ construction during recent decades. Its Leadership in Energy and Environmental Design (LEED) intro­duced in 2000 is the dominant third-party certified green building rating sys­tem. Its plaques on building entrances are well recognized with achieve­ment levels being Certified, Silver, Gold, or Platinum.

In 1993 USGBC’s founders—a real estate maverick, an air-conditioning marketing executive and a government environmental lawyer—were all hud­dling in Washington DC. It was a time of ‘green optimism’ as the first Clinton-Gore administration had just come to power. The marketing executive, Rick Fedrizzi, until recently served as USGBC’s chairman and president.

Today USGBC has over 13,000 members (mostly companies and organi­zations) and 77 chapters. 200,000 LEED professionals have been trained in 135 countries. 52,000 buildings encompassing almost 10 billion square feet are currently, or in the process of being LEED certified. It is adding buildings at the rate of 1.5 million square feet a year, including many public buildings. It also organizes ‘Greenbuild’ the world’s largest annual green building con­fer­ence and expo.

USGBC’s success has spurred governments at federal and local levels to propose regulations, legislation and code changes to make energy ef­ficiency a standard requirement of buildings particularly in public facilities. An increas­ing number of states and municipalities offer incentives to private developers for LEED certification primarily in the form of tax ben­efits.

LEED is a points-based system that does not require any energy and en­vironmental analysis. It consists of a checklist of building, environmental and human criteria in six areas: site development, water savings, energy effi­ciency, materials selection, indoor environmental quality, and innovation/ design. It started in new commercial buildings but in 2005 expanded to homes and edu­cational facilities, as well as existing commercial buildings.

LEED has been criticized as failing to deliver actual energy efficiency performance and that professionals have learned to play the system. USGBC itself admits that current information indicates that buildings do not perform as well as design metrics indicate. As a result building owners may not obtain the benefits promised. Nonetheless its early and broad acceptance, relative simplicity and market appeal continue to propel LEED’s growth.

A number of materials, equipment and construction players complain that LEED treats them unfavorably. Either that they don’t look as ‘green’ as they think they should, or that it makes them less economical. In response some have created their own ‘green’ rating systems; homebuilders and wood pro­ducers are two of these in particular.

In 2006 NAHB teamed with ICC and introduced its own Model Green Building Guideline (recall that wood-loving USFS funded this) and an ANSI-certified National Green Building Standard in 2009. NAHB’s Guide­lines and Standards give builders more flexibility, as they do not need to ac­crue point minimums in each rating category. These standards are even more relaxed for smaller home applications, which is the largest market for builders. Most important for the certification cost is two thirds less than LEED. Of course this comes at the price of allowing many short cuts. Though self-serving and clearly not independent, NAHB is using its political clout to influence authorities to accept its program as an equal alter­na­tive to LEED.

The wood industry also expressed a strong dislike for LEED. A 2003 pa­per by the American Forest & Paper Association (predecessor of AWC) claims that LEED does not bode well for wood and wood-based products, dis­criminates against the use of wood products and does not provide incen­tives for the use of wood in construction. LEED incentivizes materials that are closer than 500 miles from the point of use, while wood tends to be shipped from further away. LEED recognizes only one type of international forest certification (Forest Stewardship Council). Also LEED rewards both recycled and renewable materials in similar ways (they think renewable should get more credit). Finally it prefers materials that renew rapidly, rather than slower ones like wood.

The wood industry was offended that LEED did not buy-in to their self-proclaimed status as one of the most environmentally beneficial products. It felt that USGBC represented an anti-harvest preservationist sentiment and that the wood industry was an unwelcome participant in the development of LEED. In other words the wood industry could not apply its political and public relations pressure on USGBC. In response and under pressure, politi­cians from wood-producing states have tried to restrict LEED both in their states and in federal spending appropriations. Many call it ‘Wood Wars’.

The wood industry in 2004 created its own alternative non-profit organ­i­zation, called the Green Building Initiative (GBI) based in Ore­gon (of course a wood producing state). It found allies in the chemicals and plas­tics indus­tries (such as vinyl) that were also displeased with LEED. In 2009 GBI claimed to be the first green building organization accredited through ANSI. Like ICC it prides itself in using a ‘consensus’ approach.

In 2010 GBI introduced its own alternative ‘green’ building rating sys­tem called ‘Green Globes’, where a building can earn up to four globes. This was originally developed in Canada as a user-friendlier version of a British program called the Building Research Establishment Environmental Assess­ment Method (BREEAM) that first appeared in the 1990’s. This import was then further adapted for the US market.

The wood and plastics industries have tried to distance their visible con­nec­tions to GBI in order to create the illusion of independence. However its current chair is an executive of a roofing and (mostly wood) flooring chem­i­cals supplier and many wood products, plastics and homebuilder-related rep­resentatives remain on the board. The past president was a wood lobbyist. The replacement hired from USGBC only lasted a year (apparent culture clash) and the reins went back to another wood lobbyist.

GBI prefers to stay out of homebuilders’ way, supporting what home­builders have done. It does not report any statistics on projects but the few case studies it displays are all in wood producing states. Its site map shows numerous projects across the US, which probably total about a thou­sand, with many being public buildings. Lobbied by wood industry sup­port­ers the US government’s General Services Administration accepted Green Globes as an equal alternative to LEED for government buildings.

Green Globes promotes itself as being web-based, simpler and less ex­pen­sive than LEED, allowing more types of wood product certifications, fo­cus­ing more on material lifecycles, and being more flexible in scoring points by exempting certain areas as non-applicable.

It does not appear that Green Globes can compete with LEED on market recognition, independence and critical mass and for long will trail a distant second.

LEED and Green Globes both represent prescriptive-type metrics related to ‘green actions’; for example installing a solar panel, a water efficient toilet or a bike rack, for which they are awarded with rating points. The other ap­proach to metrics is trying to technically calculate a ‘green footprint’.

Beginning in the 1990’s Europe tinkered with this more technical formula and around 2010 began exporting it to the US. An Environmental Prod­uct Declaration (EPD) states a product’s specific environ­mental footprint. By collecting the EPDs of everything that goes into a building plus impact of the installation activity, you somehow come up with the build­ing’s overall environmental footprint. Then what you do with it is up to you. Or as EPD proponents suggest, it can be used in building specs and rating systems.

Compared to ‘green’ scoring systems this sounds very tedious, and it ac­tually is. However it did not stop some zealous architects and engineers to begin asking for EDPs. Materials people began scurrying to create them and in the process striving to ‘out-green’ each other.

Even if properly done, an overall EPD provides a mere snapshot of a building’s footprint at time of construction rather than over a desired useful lifespan. It says nothing about its environmental footprint during its operating life. Boundary condition assumptions of EPDs are important factor. Hence every material has tried to establish the most favorable conditions.

Throughout wood has strived to establish and convince that it is a unique ‘green’ material and therefore should be given special prefer­en­tial treatment. Let’s examine what this means.

It is pretty obvious that trees in a forest are ‘green’. They absorb CO2 and provide many other environmental benefits. But can cutting trees be ‘greener’ than just leaving them alone? When trees are cut they take 30+ years to regrow. So during that period their ability to absorb CO2 is reduced perhaps in half, if we assume linear growth. Therefore cutting a tree can never be better than leav­ing it alone.

Here’s where the wood industry plays with the assumptions. They claim that in forests trees would not live for very long (they actually can live for hundreds of years); that they will die, fall and thus be wasted. Some may even burn in forest fires. So, they argue, lets cut, use them and label the whole thing ‘sustainable’ harvesting. If that theory is true why don’t we just allow them to harvest the entire Amazon?

More wood is probably burns in buildings each year than in forest fires. I’m not aware of anyone who has actually tried to calculate this, but here is my attempt: The average US wood house contains around 17 thousand board feet, corre­sponding to about 90 trees (approximately 60 foot high by 14 inches diam­e­ter). Annually there are 500,000 structure fires (including multi-family with even more wood). Assuming on average that two thirds of the wood is burnt, that calculates to approximately 30 million trees. The 750 million for­ested acres in the US contain about 15 billion trees from 11 to 29 inches in di­ameter. USFS estimates that forest fires on national lands on average af­fect 400 thousand acres annually. Let’s increase this to 500 thousand acres to account for private lands. That comes out to only 10 million large trees burnt. Building fires beat forest fires 3 to 1!

There is validity to forest management but not of the sort practiced by commercial forestry, even when they are certified. It is practiced by forest conservationists and involves very selective, small scale and non-mechanized harvesting. By its nature it is not profitable and therefore not practiced by commercial operators. However determination to sell a product often dis­torts people’s view of reality.

As you may have noticed, none of the above metrics address the dimen­sion of a building’s resilience to natural hazards. My favorite remark to USGBC has been: ‘You can be platinum today and flat tomorrow. Just how sustainable is that?’ A highly rated building may be ‘green’, but if hazard-vulnerable it cannot be sustainable; and when it becomes a pile of rubble it is no longer ‘green’ either.

So why don’t LEED and others include resilience in their rating systems or even better make it pre-requisite to getting a rating? I have never received a straight answer but believe the reason is this: they don’t want to get sued. In the litigious US it would be too easy to get sued for rating a building that later suffers hazard damage. Especially when you already know that the building code system is full of holes (do you ever wonder why no one ever sues the government on this?). Of course they will talk and say how much they support resilience but that’s about it.

Recently a Vermont non-profit, Resilient De­sign Institute, cham­pi­oned an initiative within USGBC to include certain resili­ence and emer­gency planning-related criteria in LEED as a pilot test program. However even if adopted, these would be discretionary and may not as­sess a building’s hazard vulnerability. They could be easily traded-off for a bike rack or a waterless urinal, which LEED provides for. It’s hard to put resilience on the same level of importance as many other ‘green’ things that LEED rewards.

What becomes apparent is how much easier it is to claim that this or that is ‘green’. Which is why everyone and their relatives have suddenly declared that they are the ‘greenest’ product around. Who is really checking anyway?  It’s all so subjective and easy to manipulate. And if you do the things that rating systems say, you get to wear a badge that boasts ‘I’m Green’!

It is much more difficult to make such claims with resilience. Those claims will be tested by nature herself when the next hazard hits; and na­ture is neither forgiving nor can she be manipulated. It is only then that we separate the ‘men’ from the ‘boys’. This is what IBHS aims to do. Insur­ance compa­nies, for all their limitations, are the only parties that can make credible statements on whether a building is resilient or not. They have skin in the game. None of these ‘green’ rating organizations have skin in whatsoever they claim.

Yet tens of thousands of people and companies, even governments are spending tens of millions of dollars to play the ‘green’ rating metrics game.  Why? It makes them feel good and helps their pub­lic image. It may also make their employers, customers and neigh­bors feel good. If it helps sales, morale and slightly increases prop­erty values it may indeed be good business. If it potentially also saves in re­source costs and benefits the environment even better, but that’s not guaran­teed.

Looking at the EDP approach even if the analy­sis included operating lifecycle footprints, what happens if that life is cut short because of building failure? What if a slightly greater footprint at the time of construction could have assured a longer lifespan against future haz­ards? The absence of resilience considerations makes them irrelevant.

Without considering the hazard vulnerability of buildings all the mentioned ‘green’ metrics simply become a pile of landfill rubbish. If using of natural resources wisely is the true objective, what’s best could be totally the opposite depending on a building’s vulnerability to hazards. Or as I’ve said to ratings people: ‘If you have to build it twice, it’s definitely not green!

For all its good intentions it appears that when it comes to buildings, the green movement has clearly missed the mark.

Chapter 22

Built Environment Makeover: From Repetition to Resilience

For all of humankind’s technological progress, creating the built environ­ment remains one of its messiest activities. It is rife with uncertainties, delays, missed promises, defects, damages and unforeseen costs. Anyone who has built a home or other building understands what I’m saying.

Most people doing this for a living converge on a strategy of repetition and jobsite simplicity. As a result, the industry tends to be slow at adopting change even when it’s for the better.

When you look at buildings from prior centuries, you are often amazed at the craftwork and details. Unfortunately our education and training centers no longer turn out the skilled craftspeople of earlier times. Today you feel lucky if you can keep workers from harming themselves, follow instructions, meet productivity goals and avoid mistakes.

One way to achieve that is delegating whatever you can offsite. Prefab­ricate as much as possible at factories and shops, where quality and cost can be better managed through mechanization, and then assemble the components and subsystems onsite. The easier the assembly process the better. The larger the project the more likely assembly will be delegated to specialized sub-con­tractors. Standardization, repetition both on- and offsite, combined with good project management become the keys to driving down cost and reducing headaches.

Hence over time an entire supply chain develops to serve creating the built environment. The downside of this system is that it changes very slowly.  When you ask why builders so much resist code changes, the underlying rea­son is there is too much already vested in and dependent on the status quo.

It takes 20-25 different types of trade skills to build a house in the US, including concrete setters, framers, welders, brick/block masons, carpenters, roofers, plumbers, electricians, floorers, tile setters, painters etc. The avail­a­bility of various trade skills depends on prevailing construction practices in the area.

For example there are about 60,000 brick/block masons in the US. How­ever approximately 60% of them are located in just 10 States where brick and block construction is commonly used. Mississippi, one of the most hazard-vulnerable states with weak building codes, reports only 270 masons. This is one-tenth the number of masons in Virginia, a state only three times larger in population.

This can affect builders’ options if they suddenly decide to use concrete block walls in a state with few masons. Code upgrades that involve changing the types of needed skills—such as switching from wood to block—have implications on the required trade skills mix. Labor is a strong underlying reason why builders resist code changes.

The future outlook for trade skills depends on market demand, training options and attractiveness of competing occupations. The industry increas­ingly faces the threat of a shrinking labor pool, even while overall unem­ploy­ment remains high. For labor to not become an obstacle to strengthening codes, public policy on education needs to become more supportive of trade and vocational training. Using Mississippi again as an example, the average annual wage for masons in $37,000. This is more than twice the pay of food preparation work­ers, which number 13,000 in the state. Virginia in compari­son only has only 40% more food preparation workers, even though three times larger. So having more resilient codes might actually help raise low-income wages over time.

Nowhere is the repetitive ‘cookie-cutter’ approach applied more aggres­sively than in homebuilding. Except that over time the ‘cookies’ have become thinner and more fragile. Today in the US and Canada the dominant method for building the structure of a house or low-rise apartment is called ‘light wood platform framing’. The earlier method was called light wood balloon fram­ing. During recent decades homebuilders figured how to use smaller and lighter pieces of wood, and less of it, to create the same floor space. They have gotten these designs approved by the consensus-minded ICC (and prede­ces­sors) and into state and local codes. It is easier, faster and less costly; much better for the builder.

But is it better for the consumer? Builders say ‘yes’ because it is ‘afford­able’ and ‘code-approved’. Others say ‘no’ as in practice this has proven too vulnerable to hazards. The proofs are the millions of homes dumped into landfills (or incinerators) in recent decades. The proof is also IBHS’ documented destruction at its ‘crash test’ facility. In essence this model represents the ‘Corvair’ of homebuilding.

To further decrease onsite work and cost, many homebuilders today have switched to purchasing prefabricated parts such as roof trusses. Although they claim better design and quality, in part these designs cut cost by reducing the amount and size of wood components even more.

In the post-war period approximately 70 million single-family homes were built in the US to increasingly weaker resilience standards. This building stock forms the core of its low Resilience Capacity and will remain a private and public liability for many decades to come. Unfortunately this repetitive ‘cookie cutter’ homebuilding machine continues to operate in full throttle deepening the ‘vulnerability hole’ each and every day. Over a million, mostly non-resilient, homes are now being added annually to this building stock.

IBHS has ranked the most wind-vulnerable sections of these homes as:

  1. Roofs especially their corners
  2. Door, window and garage openings
  3. Exterior walls

It recommends ways to reinforce these areas to reduce wind vulnera­bil­ity. However this does not reduce any fire and flood risk these structures pose.

The evolution in homebuilding over the past century has focused on simplifying assembly and reducing materials and labor costs. In theory ar­chitects and engineers should be the primary technical drivers of change. We will discuss both.

Today there are over 100,000 architects in the US (more than masons). The National Council of Architectural Registration Boards states:

An architect will create the overall aesthetic and look of buildings and structures, but the design of a building involves far more than its appearance. Buildings also must be functional, safe, and economical and must suit the specific needs of the people who use them. Most importantly, they must be built with the public’s health, safety and welfare in mind.

How do architects feel about the ‘safety’ of our built environ­ment and what are they doing on resilience?

The American Institute of Architects (AIA), founded in 1857, is the lead­ing professional organization for architects. It has 300 chapters and has played an active role in ‘green’ buildings and the inception of USGBC.

Disappointingly their 2010-15 strategic plan has absolutely no reference to disasters or resilience. Also none of their member communities address re­sil­i­ence. Is it possible that they now live on another planet?

In their advocacy programs they do include a section on disaster but it is mostly oriented towards post-disaster response and recovery. The codes and standards section talks a lot about ‘green’ but has no mention of resilience. They appear happy in playing their part in the ‘system’.

In May 2014 during ‘Building Safety Month’ AIA did join numerous other associations in declaring their common ‘commitment’ in promoting re­silience but so did NAHB. Nice public relations.

At meetings (including their 2014 convention) they talk about resilience but always in an environmental and social context; never focused on the built environment that they are primarily responsible for designing. Their cur­rent priority appears to be designing carbon neutral buildings while re­main­ing silent on whether those buildings will survive hazards.

Overall AIA’s softness and lack of accountability regarding the sub­stand­ard resilience of US buildings appears to be part of the problem. Their 2015 conference appears to address resilience more directly. If they are true to their professional responsibility let’s hope they quickly become part of the so­lu­tion, expose the deficiencies of present building codes and push for more rapid change.

This is not meant to diminish the work of many architects who design in­credible buildings that are resilient. Interesting though that most of those projects are being built outside the US.

While architects have overall design responsibility, it is civil engineers who bear specific responsibility for making sure that building struc­tures withstand hazards.

The US Labor Department reports there were over 270,000 civil engi­neers in 2012. Until the 18th century there was very little distinction between architects and civil engineers. Design and construction was the combined role of the ‘master builder’ (which is what the Greek word ‘architekton’ means). An Eng­lish­man, John Smeaton, around 1771 became the first self-proclaimed civil engineer. In 1818 the Institution of Civil Engineers was established in London and its early focus was infrastructure rather than buildings. The first US civil engineering degree was awarded in 1835.

The America Society of Civil Engineers (ASCE) was founded in 1852 as the first engineering association in America. Initially architects were in­cluded, until AIA branched off on its own. ASCE presently has 145,000 mem­bers in 174 countries. ASCE’s three strategic initiatives are infrastructure, sustaina­bility and educational requirements for the licensing en­gineers.

It has issued numerous policy statements regarding resilience and disas­ter mitigation:

#389: Mitigating Impacts of Natural and Man-Made Disasters (1992/  2014)

#390: Earthquake Hazards Mitigation (1992/2012)

#475: Wind Hazards Mitigation (2000/2013)

In #475, it notes that ASCE supports the creation of a unified national program to effectively reduce the economic and community losses experi­enced each year as a result of windstorms. Such a plan was authorized by Congress in 2004 in Public Law 108-360, but there has been no specific ap­propriation.

It states that a private-public partnership should be created to develop the national plan. The plan should include implementation of innovative codes and standards that provide for wind-resistant construction and programs for assuring increased compliance and public education on wind hazards.

In arguing the need ASCE points out: Currently there is no unified na­tional program in place to focus upon reducing the effects of extreme wind events through the development and implementation of cost effective mitiga­tion strategies. A unified national program addressing efficient wind-re­sistant design and construction, early warning and detection, improved emer­gency response, and public education and awareness can result in a signifi­cant re­duction in losses, both human and economic.

This is beginning to sound like creating federal standards for wind haz­ards. The defenders of ‘Weak and Cheap’ might view this as a threat to the existing code setting ‘system’. Apparently President Bush signed the law in 2004 and it was partly funded until 2008. Since then there had been repeated efforts to fund it and none succeeded due to opposition by industry inter­ests. Final­ly in 2015 HR23, The National Windstorm Reduction Act Reau­thor­iza­tion passed both houses of Congress and was signed September 30 by the President. This appropriated a long-awaited $65 million in 2015-17 for wind re­sil­ience research.  It took seven years to overcome the opposition.

Those who benefit from the status quo are determined to protect it. However nature is proving they are on borrowed time. High-speed repetition of non-resilience may keep down costs, make business easier and protect certain markets, but it will only continue to sink the US deeper into the disaster-vulnerability hole.

Chapter 23

Gone With the Winds: Disaster Reruns

US insurance statistics show that in the 20-year period of 1993-2012 over three quarters of catastrophic losses were caused by wind: hurricanes, tropical storms and tornados. A catastrophic event is de­fined as one with losses above $25 million. Tornados were the fastest growing hazard category. Win­ter storms, hail and floods averaged around 10%.

Wind vulnerability is a major contributor of US low resilience, affecting almost two-thirds of the country. On the Atlantic and Gulf coasts 18 states are exposed to hurricanes and tropical storms. In addition the majority of states east of the Rocky Mountains are exposed to tornados.

According to the National Oceanic and Atmospheric Admin­istra­tion, the US is the most tornado-prone nation in the world. This is appar­ently due to its unique topographical position, sandwiched between cold Canadian and warm Caribbean airs.

The prevailing method for rating tornados is the Enhanced Fujita (EF) scale based on maximum 3-second wind gust measurements. The maximum speeds (mph) for the six EF levels are:

EF0          85

EF1        110

EF2        135

EF3        165

EF4        200

EF5        no limit

88% of tornados are EF0-EF1 (termed moderate) typically lasting 1-15 minutes. 11% are EF2-EF3 (strong) and can extend more than 20 minutes. Fi­nally, about 1% are EF4-EF5 (violent) with potential durations over an hour. Av­erage tornado width is 300 feet but the maximum can exceed half a mile.

However even violent tornados have very narrow bands of extremely high winds. Studies show that 80-85% percent of building damage from an EF5 tornado are caused from wind speeds below 135 mph.

In the 20 years from 1991-2010, an average of 1,253 tornadoes occurred annually. Average annual occurrences for the twelve most vulnerable states in this 20-year record were:

1. Texas155
2. Kansas96
3. Florida66
4. Oklahoma62
5. Nebraska57
6. Illinois54
7. Colorado53
8. Iowa51
9. Missouri45
10. Alabama44
11. Mississippi43
12. Arkansas39

Based on this record over the course of a century each of these states could ex­perience 4,000 to 15,000 tornadoes; of those, 500-1800 might be strong or vi­olent.

In 2011 economic losses and fatalities due to tornados reached a record $28 billion and 551 lives lost. Some would say that the black swan eve­ry­one ignored had again raised its head. It shook the in­sur­ance and policy world.

Why the US continues to appear dumbfounded every time such disasters occur is a policy paradox. Using the last 50 years’ records, high-risk areas with frequencies of 5-10 hurricanes per 10,000 square miles are mapped-out and well known.

We know (as practiced in south Florida) how to economically build for wind loads reaching 165 mph, which would protect from EF0-EF3 tornados and 90%+ of damage caused by EF4-EF5 tornados. You would think that building codes in those areas would be set high enough. Un­fortunately the answer is no. ICC ignores the hazard, with the fatalistic excuse that tornado resilience is not cost justified. In one of the most flagrant acts of standards negligence, the prevailing code level for most tornado areas is set at 90 mph.

Several cities in so called ‘tornado alleys’ have adopted higher wind loads for commercial buildings but not for residential. On the rationale that the probability of getting hit is small, officials prefer to gamble against nature (using people’s lives and possessions) rather than build Resilience Ca­pac­ity. This gamble is even larger for urban areas (recall the 2nd Law). In­creas­ingly communities and property owners invest in optional piece-meal solutions, such as storm shelters or safe rooms, which may save lives but still sacrifice property.

Officials point the finger at ICC, which has failed to propose model codes for tornado resilience. The problem is not only that the building code system is frag­mented but the way it looks at hazards is also frag­mented. Each hazard is examined in isolation from others.

In that context the ‘consensus’ mindset is convinced that tornado resili­ence is not cost-effective because its recurrence frequency at any particular building is low. The ‘consensus’ compromise labels it ‘unaffordable’. How­ever such single-peril thinking is narrow-minded. It forces the conclusion that investing in any individual hazard on its own is non-economic. On the con­trary when combi­nations of hazards are examined together the result is different.

An integrated resilient building design simultaneously addresses the multiple hazards of wind, fire and water, which are present in most vulnerable locations. Cumulatively the combined risk of these hazards is considerable. Building codes that concurrently address multiple haz­ards can be justified. In addition, resilient designs also benefit from greater overall durability, lower maintenance costs and energy savings. Finally hazard thinkers need to acknowledge the presence of ‘black swans’, rather than re­peatedly being caught as ‘turkeys’.

That so many talented professionals, technical associations and ICC ‘con­sensus-thinkers’ have failed to articulate and deliver such concepts is dis­appointing. Realizing this shameful performance I challenge ‘resili­ence-con­scious’ engineers to ‘buck the consensus’ and push for standards that can deliver integrated multi-hazard resilience.

Only in mid-2014 did the National Science Foundation solicit proposals to fund eight studies on ‘Decision Frameworks for Multi-Hazard Resilient and Sustainable Buildings’. Since Katrina there has been renewed talk about multi-hazard resilience, some of it conducted by the Architectural Engineer­ing Institute. But it mostly focused on infrastructure rather than the ‘weak un­derbelly’ of disasters—homes—and had little if no impact on codes. In fact most engineers appear to have either given up or prefer not to talk about resilient homes.

Should we be blaming engineers? Give an engineer a set of assumptions and he/she can design any building you wish. Those assumptions include maximum wind load, wall impact strength, fire resistance and maximum flood levels. All the knowledge is available to design resilient buildings, if we cor­rectly set the hazard levels.

The problem is that the design parameters given to engineers are below the real hazard levels that buildings experience over their lifetime, particularly in residential and light commercial applications. Who sets the design param­eters? Answer: the ‘consensus system’. Unfortunately engi­neers are mostly (willingly or unwillingly) part of that ‘system’.

ASCE’s Structural Engineering Institute is charged with establishing minimum design loads for buildings and other structures under ASCE 7. In 2010 it released updated US wind maps under ASCE 7-10. These are what ICC uses in its model codes such as the 2012 IBC. This new version did very little to improve wind resilience compared to the earlier ASCE 7-05 version.

When you look at the maps themselves the wind speeds appear higher. But in the fine print you discovered they tinkered with the factors for calculat­ing design wind pressures. In essence the outcome is higher pressures for a narrow sliver of coastal land and lower pressures for all else inland. Torna­dos are basically ignored.

Some of this reasoning derives from studies claiming that inland buildings benefit from the wind protection of structures and natural roughness along the coast. Therefore, their wind load requirements can be reduced. What such studies fail to consider is what happens when a storm decimates many coastal structures. Then interior buildings become the next front line, in a domino like pattern. What one observes is how much engineering effort is focused on lowering standards, instead of finding innovative ways of meet accepted high standards.

Except for the southern tip of Florida, ASCE’s maps and wind pressure loads generally underrate the actual wind hazards that 1-2 story homes in most of the eastern and central US will experience over their presumed use­ful life. An example is Dallas, Texas, a city exposed to both tornados and tropical storms. Per the maps, the prescribed wind speed is two thirds that of Miami. However, wind stress, load and resistance pres­sures cal­culated by ASCE 7-10 are less than half those of Miami. If you look at his­toric hurricane maps you will see how many have crossed the Dallas area in the past century. Not to mention that it lies in the worse ‘tor­nado alley’.

You would have thought by now that ASCE that would have smartened up to realize the poor US wind disaster performance, but apparently they haven’t.  There was a lot of debate in the ASCE 7 committees with lobbying coming from many interests. When a topic is this controversial, a committee usually assigns it to an outside consultant to do some ‘modeling’. ASCE con­tracted with Applied Research Associates (ARA) based in North Carolina. ARA’s models concluded that the proposed wind maps for the majority of buildings (including residential) have a 700-year hazard return period.

Don’t relax into thinking that you will not see another Andrew, Katrina or Sandy for another 700 years. In theory these all are single-point probabil­i­ties, meaning that on average a specific building will get hit once every 700 years. The risk that a particular city or state gets hit is much higher. There is no consideration regarding the degree of urbanization in any of this. Neither do ARA’s models consider that the next ‘black swan’ could happen next week. So are these models a form of advanced self-deception enabling ‘consensus’ committees to justify resilience sub-performance allowing officials to gamble with disaster risk? Sounds like the old actuarial models all over again.

Interesting that in 2011, six years after Katrina, this same company, ARA, conducted a $400,000 study for the city of New Orleans. It argued that the new wind loads used by insurers were too high. Hence that insurance companies stood to make too much money and should therefore lower their premiums.

Indeed if insurers stood to excessively profit in New Orleans they would all be beating down the door to get into this market. The fact that they are not should tell us something. But modelers have no skin in the game; property owners and insurers do. The sequel to ASCE 7-10 is expected to be released in 2016.  Until then sit tight (or better anchor your seat to the floor).

However the situation is even worse. Many state codes, including those in the vulnerable US Gulf Coast do not require that a certi­fied engineer sign drawings for buildings up to 3 stories high. In ar­eas requiring approval, often unscrupulous engineers sign-off on builders’ draw­ings without even checking hazard design and compli­ance. The laws unfortunately do not call for criminal liability.

Finally many residential buildings in vulnerable areas are still subject to lax or no code inspections. If many legitimate engineers have lost interest in the houses, it is largely because the system prevents or makes it unattractive for them to be involved.

Most homebuilders prefer light wood construction because they can avoid engineers almost totally. Heavier more resilient construction requires greater technical expertise and supervision, often meaning an engineer. In the end many engineers find it easier to become expert witnesses in the lawsuits that typically follow failures than in applying their talents to prevent disasters from happening in the first place. A sad outcome of a dysfunctional ‘system’ that sustains itself in the name of ‘affordability’ and ‘status quo’.

In 2014 the citizens of Moore, Oklahoma decided to take their non-resilient situation into their own hands. Putting to shame ICC, ASCE and state code officials, Moore became the first US jurisdiction to unilaterally create a tornado code for its buildings, including homes. It raised the wind design standard by 50% from 90 to 135 mph. This city of 60 thousand just south of Oklahoma City had suffered many tornados. A recent 2003 tornado caused 24 deaths and more than $3 billion in losses. Public outcry finally drove action.

More importantly Moore broke the myth propagated by the system’s ‘experts’ in economically justifying their action. Working with sensitized local builders they estimated additional construction costs at $1/sf. An analysis performed using data for the entire state of Oklahoma concluded the benefit-cost was more than 3:1. The net benefit for the entire state would be $25 billion (in current 2014 dollars), accruing to private and public stake­hold­ers at all levels if it built to the higher wind standard.

Unfortunately no other jurisdiction to date has proactively duplicated this bold move. Oklahoma updated its state building codes in 2015, but failed to make the new standard mandatory. Even though the economic case was clearly made for the entire state, the proponents of non-resilience prevailed in making it an option to be decided by each locality. Oklahoma has nearly 600 municipalities. Prolonger fragmentation is a well-known opposition tactic.

Furthermore, states with tornado frequencies greater than Oklahoma’s, namely Texas, Kansas and Florida have done nothing. It appears that even in the face of strong economic justification, more disasters like Moore will be needed before public outcry overcomes the opposition of profitable interests.

The system is indeed well entrenched. A core issue is that the public is under-represented at code hearings. In contrast to environmental matters, there is no public voice or public-interest watchdog groups when it comes to resilience. As a result builders and property developers, who fight for their own rather than the public interest, lobby intensely and monopolize the process. Officials only hear one side of the story and succumb to pressure. The outcomes are the costly losses that society faces today.

Chapter 24

Ground We Shake On: Pro-action Over Inaction

Today we have more precise knowledge of locations prone to earth­quakes. What we still cannot determine is when these will occur.

Until the late 1980’s four million people living in the state of Oregon had no knowledge that an earthquake could devastate them. Then the Cas­cadia Fault was found to be active off the Pacific Northwest coast. It stretches 700 miles from southern British Columbia to northern California.

In 1700 before the area was colonized (it became a state in 1859) a mas­sive earthquake of a 9.0 Richter scale magnitude occurred. It destroyed a vast forested land. Its tsunami eventu­ally reached the shores of Japan. Geologists determined that over the last 3,500 years approx­i­mately nine major earth­quakes of a 9.0 or larger magnitude occurred.

The fact that the fault has lied relatively dormant for centuries raises concerns. It means the fault is building-up pressure for another major event. Therefore chances are high that a 9.0 earthquake could occur again. The ques­tion is when. If the last one occurred 300 years ago and the average return interval is 400 years, is the next one in 100 years, 700 years or tomorrow? When it comes to predicting hazard risks averages are meaningless. No one knows.

Scientists often sound the risk alarm but will anyone listen? Most policy­mak­ers just let it pass, gamble against nature, talk and study it for dec­ades and simply hope a ‘black swan’ won’t occur during their watch.  Exactly what ‘consensus’ thinking leads you to do.

Fortunately Oregonians did not follow this path. Driving attention and re­sources to act on such long-term risks requires political courage and leader­ship. Peter Courtney, President of the Oregon State Senate, became the early vocal champion of pro-action.

In 1999 the State’s Department of Geology and Mineral Industries re­leased its first study estimating the damages and consequences of such an event. Soon state building codes were being updated. A commu­ni­cations and awareness-building campaign began. Other elected officials, busi­nesses and communities joined-in. Money was appropriated to start upgrad­ing schools.

Suddenly in March 2011 the Tohoku earthquake and tsunami of a 9.0 magnitude hit Japan. It caused 16,000 deaths and destroyed or damaged over a million (mostly wooden) buildings. The economic loss totaled over $120 billion. It spurred Oregon into faster action.

Two months later Oregon’s legislature approved the creation of a state-wide com­prehensive long-term resilience plan. A public-private com­mis­sion engaging all stakeholders was assigned the task. It studied, among other things, the lessons learned from recent disasters both in and outside the US. The study estimated that a 9.0 earthquake would cause over $32 billion in economic losses and thousands of deaths in Oregon. The state’s economy and way of living would suffer for decades.

The plan was completed and approved in February 2013 under the title ‘The Oregon Resilience Plan’. It forms an incredible blueprint outlining a path of policy and investment priorities for the next 50 years. No other state has ever laid out such a comprehensive Resilience Capacity plan.

The plan addresses the dimensions of buildings, transportation, energy, communications and water for the purpose of sustaining and restoring ‘life­line’ or essential services. When a major event occurs its objective is to re­store lifeline services as quickly as possible. Graphed along two dimensions of services versus time, this displays a performance metric called the ‘Resilience Triangle’ (his triangle correlates directly to the 4th Law); the quicker essential services are restored, the smaller the triangle. Vulnerability, whose magnitude depends on Resilience Capacity, causes loss in functionality and services. The rate by which services recover depends on both the area’s Resilience and Emergency Capacities.

Japan was able to restore 90% of power supply in 10 days and 90% of phone/cell communications in 19 days. After the 2010 Maule earth­quake Chile restored 95% of power supply and communications in 14 days.  Oregon estimated that in its present condition it would take 1-6 months to restore power and 1.5-3 years to restore healthcare facilities depending on distance from the coast.

Oregon’s recommendations related to buildings included:

  1. Complete a statewide inventory of critical buildings (those needed for emergency response and for providing essential services) in both public and private sectors.
  2. Launch a sustained program of capital investment to upgrade pub­lic structures, including schools, colleges and emergency response facil­ities.
  3. Develop a seismic rating system for new buildings, incentivize resili­ent construction above required building codes and com­muni­cate seismic risk to the public.

It also recommended establishing a State Resilience Office to provide leadership, resources, advocacy and expertise in implementing statewide re­silience plans. Oregon was starting from a low Resilience Capacity point. Even its Emer­gency Capacity was low. Its emergency management budget is only $2 million. 80% of its residents carry no earthquake insurance, which involves paying a special premium.

Most of the state’s 2400 educational facilities were built in the 1950’s and 1960’s and need seismic upgrading. 47% of these have a high or very high risk of collapse with a major earthquake. In 2001 the state began authorizing upgrade funds but the subsequent economic downturn re­duced available funding.

There are 60 healthcare complexes with about 180 critical healthcare build­ings. Fortunately most of these were constructed of resilient concrete or steel with few architectural irregularities. The greater concern is securing critical medical equipment inside from motion damage.

20% of remaining critical government buildings are considered most vulnerable, having been constructed of wood or unreinforced masonry. The plan recommends upgrading these.

Finally Oregon has approximately 1.6 million residential buildings of which about a million are single-family homes. The latter are almost entirely con­structed of light wood framing. Lightness is an advantage for seismic motion compared to wind vulnerability. However weaknesses in wall-to-foundation anchoring, unbraced cripple walls between the first floor and the founda­tion/basement and roof-to-wall connections can all cause failure.

Along the coast the tsunami is expected to obliterate all wooden buildings. Well-built steel and concrete buildings will likely survive. Nonetheless the report expects that most wood-frame homes will survive an earthquake, compared to the overwhelming destruction similar structures would suffer in a hurricane. On the other hand, unreinforced masonry buildings are all considered vulnerable.

The funding requirements for this plan are enormous. In late 2014 a task force recommended that Oregon commit over $100 million a year spread over several decades to improve its resilience. Half would be required just for schools and public buildings. Transportation upgrades alone require a total of $5 billion. The state has yet to figure out how to pay for this, but has taken the initial steps. All community segments appear united behind its re­silience plan.

Now contrast Oregon with Memphis, Tennessee, an area that ap­pears in denial and divided regarding its earthquake vulnerability. The New Madrid Fault is the most significant earthquake hazard east of the Rocky Mountains. It extends for 150 miles from southern Illinois to eastern Tennessee. Memphis, with a met­ropolitan area population of 1.3 million, sits squarely in its danger zone.

Five earthquakes with an 8.0 magni­tude occurred during four months between 1811 and 1812. In 1976 and 1990 earthquakes of 5.0 and 4.8 struck. Sci­en­tists predict a 40% chance of a 6.0 or greater earthquake in the next 50 years; potentially a 10% chance of an 8.0 event. But again no one knows when. It could happen this month. ‘Black swans’ don’t reply to RSVP’s.

The question is what is Memphis doing about it. On Emergency Capac­ity it is organizing to alert people and respond when disaster strikes. Un­fortu­nately on Resilience Capacity it has done little. For forty years there has been a tug-of-war on one side between scientists, insurers and disaster groups, versus homebuilders, developers and special interests on the other. The latter have blocked improved local codes even though Tennessee passed a law re­quiring stronger seismic standards. In 2012 the state received $10 million in federal funds for disaster resilience and response with an under­standing that they would improve codes.

In this case ICC did supply model residential and commercial codes with seismic provisions. However local county and city officials have repeatedly delayed implementing them. Reasons argued by opponents include cost, ‘afforda­bility’ and even the denial of a serious earthquake risk. The cost of stronger codes was estimated at $2,500-$3,000 per home, or 1-2 $/sf.

Insurance companies increasingly view Memphis as high-risk, pushing up rates and reducing insurance availability. Major companies already proactively build or lease facilities with seismic standards. Memphis is a major hub for Federal Express. 30% of US goods are processed through Memphis annually. A disaster would signifi­cantly disrupt supply chain logis­tics through the US and probably internationally.

In 2012 opposing interests even tried to repeal the state law. Finally in late 2013 the City and County passed the 2012 IRC but with an alter­native compliance scheme (i.e. loophole) for the seismic provisions. This reads:

A Joint Ordinance amending the 2012 Memphis and Shelby County Joint Residential Code by providing an alternative compliance method for construction of detached one and two family dwellings when wood framing is used to meet structural seismic requirements and setting a new effective date for all of the structural provisions of that code.’

It simply means more delay and weakened enforcement. Compared to Oregon, Memphis’ this shortsightedness, complacency and lack of leadership is shame­ful. If it sounds like backroom tinkering by proponents of ‘cheap and weak’, it is. They continue to pressure local policymakers to place people and property at risk solely to protect their economic interests. We should remember to hold then accountable for damages when one-day disaster strikes Mem­phis.

PART III: After the Storm

“If you raise the cost of building homes,
people will have less to spend on insurance”

Building industry representative
opposing code changes

Chapter 25 –

Liquid Rock: Harnessing Nature’s Strength

From ancient times humans aiming to build hazard-resilient structures turned to stone. The earth’s rock formations were created over hundreds of millions of years from igneous or sedimentary processes. ‘Igneous’ is the melt­ing, cooling and crystallizing of masses of silica, alumina, potassium and other minerals. An example is granite. ‘Sedimentary’ is the layering, bury­ing and application of heat and pressure on fine organic and inor­gan­ic miner­als. These include marble, limestone and sandstone, which be­came the most common construction stone used.

The cutting, quarrying, hauling, lifting and placing of rock sections re­quired considerable human and animal time and effort. But the structures they built lasted for centuries. All the buildings surviving from this early period were made of stone, such as the Pyramids, Parthenon and the Pantheon.

The Great Pyramid of Giza contains 2.3 million stone blocks, each weigh­ing 2.5 tons for a total of 6 million tons. Around 140 pyramids of vari­ous sizes have been discovered. What a massive human investment! If the Pharaohs sought immortality it’s what they got; eternal resilience. You might ask what value such resilience investment had. Did they even do a cost-benefit analysis? Ironically, those ancient investments paid huge divi­dends for Egypt in the form of tour­ism, something the Pharaohs never planned for.

But resilient construction using enormous rock blocks was very ex­pensive and slow (few could ‘afford’ it). Resilience could also be achieved using medium and smaller sized rocks, if something could hold them in place. Ancient Greeks poured molten lead inside marble columns and wall sections to secure them from moving. As an alternative to natural rock, early humans discovered that they could mass-produce smaller ‘manufactured stones’ or bricks from clay. However these also required a binding material to hold or ‘cement’ them in place.

Early ‘lime cements’ were purportedly discovered in Mesopotamia around five thousands of years ago. They may have been first discovered by grinding the limestone carved from outcrops struck and fused by lightning. Later production involved heating and fusing the limestone in kilns. Rulers kept production methods a guarded secret, probably to prevent sharing their resilience advantage with adversaries. Romans later developed even stronger ‘poz­zolanic cements’ by heating, cooling and grinding volcanic ashes together with lime­stone.

Perhaps the oldest functional building today is the Pantheon. Built in its present form by Roman emperor Hadrian in 126 AD, it has been in contin­u­ous use ever since. Until the 20th century it was still the world’s largest concrete structure. Its resilience over almost two millennia in part is due to the fact that its structure lacked any metal reinforcement. Steel and its use for concrete reinforcement only appeared in the late 19th century. Had metal been inserted, it probably would have corroded centuries ago and cracked the concrete structure.

During the Middle Ages much of this know-how was lost. It was not un­til 1756 in England that John Smeaton discovered modern-day ‘Portland’ ce­ment. Others continued working with it until in 1824 Joseph Aspdin ob­tained a patent. The name derives from its similarity to Portland stone, a rock quar­ried on the Isle of Portland. In England, France and Germany efforts contin­ued to perfect the product and its manufacture in the decades that fol­lowed.

The US began importing Portland cement (we’ll just call it ‘cement’) from Europe in the 1850’s. In the 1870’s manufacturing started in the US. By the early 20th century European imports had been mostly displaced by domes­tic production. Thomas Edison was one of the pioneers who produced it. He even developed plans to mass-produce low cost resilient homes for workers. One such home still stands in Union, New Jersey.

The manufacturing process involves mixing specific portions of finely ground limestone (calcium), sand (silica), clay or marl (alumina) and a little iron and heating it all to 1450 degrees Celsius until it melts. Next rapidly cool­ing it to create golf ball-sized rocks, called ‘clinker’; and finely grinding the clinker with gypsum to pro­duce cement.

Chemically, cement is a mix of active powdered calcium, silica and alu­mina oxides. When combined with water these oxides become hy­droxides, i.e. crystals. As millions of these microcrystals grow they interlock with each other forming strong bonds.

With cement came the modern day manufacturing of concrete. Concrete is the combination of cement, small stones (called aggregate), sand and water.  The cement crystalizes with water and binds everything together. Nature it­self creates and grows crystals to form rocks. So essentially with concrete humans have found a way to imitate and control nature’s stone-making formula in the size and form desired. That’s why it’s often called ‘liquid rock’ or ‘man-made rock’. Once these crystals form and harden it is very difficult to break them apart.

Had concrete existed 4000 years ago the Pharaohs would have likely pre­ferred over the labor and time intensive quarrying, hauling and stone lifting they used. ‘Liquid rock’ can be produced locally, is easier to transport and forms to the desired dimensions where needed. Fortu­nately cement’s raw materials are among the most abundant on the earth’s surface, found almost everywhere.

Cement has very high compressive strengths, which means it can with­stand considerable pressure. However it has low tensile strength and ductility, which means it does not bend well. To compensate for this a ductile material such as steel rods (called rebar) is incorporated in concrete forms. Hence the de­velopment of reinforced concrete. The French first introduced it during the mid-1800’s in bridges and mid-rise buildings. Today it has become the uni­ver­sal way of constructing with concrete. Much advancement has been made in as­suring the corrosion protection of steel.

Since then other non-steel forms of reinforcement have been introduced, including the use of glass and plastic fibers. Other techniques were later de­veloped to increase the load bearing strength of concrete beams, such as pre- and post-tensioning of reinforce­ments. This enabled wider building spans for roofs and bridges.

Today cement production is a high-volume capital and energy intensive manufacturing operation sited near its basic raw materials: limestone, clay and /or marl. As these are commonly found near the earth’s surface, almost every country in the world today produces cement. In the US 80% of the states pro­duce cement locally, and most of the remaining could also if they wanted.

Due to its basic chemistry and the high temperatures used in its manufacturing process, many munici­pal, agricultural and industrial by-products have substituted virgin materials and fuels in its production. This reduces the need to landfill these and promotes recycling. They include the use of city gar­bage, tires, agricultural wastes, steel manufacturing slag and power plant by-products such as ashes from boilers and gypsum from sulphur scrubbers.

Over the last half century the cement industry modernized its methods of production from wet to dry. This not only reduced the use of water but cut en­ergy consumption in half. However, the industry is still criticized as being an energy in­tensive process and a source of greenhouse gases. One of its handicaps is that limestone, a key raw material, contains and when heated releases its inherent carbon di­oxide. Overall for every ton of cement produced about a ton of carbon dioxide is released between fuel and limestone.

The industry has and continues to make efforts to reduce the carbon footprint of its final application—in-place concrete. Strategies include the use of less concrete to achieve the same performance, the use of less cement in concrete by substituting with other cementitious and pozzolanic materials (such a fly ash and steel plant slag), and substituting limestone in feed stocks with other sources of calcium. Longer-term research into alterna­tive cement chemistries and carbon capture will take time to materialize.

For the foreseeable future concrete remains the most resilient mass-pro­duced construc­tion material that is both locally available and cost effective. It re­sists fire, wind, water and organic attack. IBHS refuses to ‘crash test’ re­inforced concrete buildings at their facility. As FM Global would say, the test would be ‘deterministic’ in that the outcome is already known; con­crete would survive the hazards.

Concrete placement can involve a variety of building practices, almost all of which are reinforced: poured in-place to form columns, floors and walls, precast sections assembled onsite, concrete block and brick masonry, tilt-up concrete subsections poured onsite, insulated wall forms filled with poured concrete, gunited (or sprayed) concrete over various wood, metal or synthetic surfaces are some of the most common. The versatility of ‘liquid rock’ drives continuous innovation by concrete contractors, both in its sole use and in many hybrid applications combined with other materials (including wood).

In the ‘green wars’ of recent decades every construction material has vied to be mirrored as the ‘greenest of all’. Solely examining a snap­shot when material leaves the production plant or in completed construction, concrete often looks the least ‘green’. However when you figure-in that concrete will out­live and out-last other materials by 5 to 10 times, it is very ‘green’.

To the extent that ‘green wars’ have fostered competition between mate­rials for energy and resource efficiency, as well as environmental stewardship, it is a great thing. However as a determinant for selecting one material over an­other, the current use of green criteria can be very misleading and often of questionable value. Unfortunately the green movement (driven by con­sult­ants who generate business for themselves) currently appears to be blindly plowing down the latest fad of environmental product declarations (EPD).

In designing buildings, materials selection should be first based on de­sired use and performance (including hazard resilience, safety and lifespan), and second, on the economics and local availability of materials and building resources. Unfortunately in much construction, especially residential and light commercial, initial cost and local habits become the ‘tail wagging the dog’.

Once a design is selected, quality control both in the production of the mate­rial and its application become essential to delivering performance. The problem is that the vast residential construction segment also has the least quality control. Engineers are avoided. Building codes offer minimal protec­tion. Even where codes exist, inspections are often non-exist­ent or inadequate. If applied incorrectly, any material will perform poorly, es­pe­cially with regards to resilience.

Reducing this quality risk often requires moving as much of the materials preparation and construction process offsite where better control can be pro­vided. Originally cement was supplied in bags and mixed onsite with deliv­ered aggregate and sand, plus site water. As you can imagine consistency and quality was difficult to maintain.

This practice largely continues in the developing world. In fact much of the construction problems exposed after the 2010 Haiti earthquake were due to the improper prepara­tion and placement of concrete. In the developed world this practice has largely been replaced with ready mixed concrete. Concrete is prepared at a controlled mixing plant and transported with ready mix trucks to the site. The practice emerged in the early 20th century and after the World War II steadily ex­panded in the US and Europe. Today less than 5% of US cement is consumed in bag form. Much of that is already in a dry pre-mixed form for masonry work and smaller do-it-yourself projects.

About 15% of the cement consumed in the US is used for offsite manu­factured concrete products. These range from concrete blocks to precast con­crete sections that are produced in controlled plant environments. These de­crease the risks of both material preparation and placement, since the onsite work is reduced to mostly assembly.

Price-wise concrete is the least volatile construction material com­pared to wood and steel. The reason is because it is mostly local and not as sensi­tive to the vacillations of international trade and manipulations of finan­cial commodity markets. The annual global production of ce­ment is currently estimated at 4 billion tons. Only about 3% of that is trades in­ternationally, which means that 97% of cement is consumed within the country produced. In comparison, an estimated third or more of global softwood and steel produc­tion volumes are internationally traded, making their pricing more volatile.

The US is a relatively small producer and consumer of cement with only about 2% of the global volumes. In contrast it consumes about 20% of global softwood volumes. Relative to its construction activity the US is one of the least cement-intensive and most wood-intensive countries in the world.

By comparison Japan is more cement-intensive and less wood-intensive.  Its 2011 cement consumption was half of the US, but softwood consumption was only one fourth. One would expect Japan to be more wood-intensive as the country is exposed to seismic hazards for which wood has a light­ness advantage. However it is also highly urbanized. It appears that Ja­pan has learned from its disaster history and is applying the 2nd Law. Unfortunately the US has not.

This observation raises an interesting question: Is there a correlation be­tween the US’s relatively low cement intensity and its high hazard vulner­abil­ity? I believe there is.

Japan also has the world’s best national statistical system for its built en­vironment. The Ministry of Internal Affairs and Communications’ Statistical Bureau manages it. One of the national statistics it collects regards buildings destroyed by disasters. It breaks out residential and wooden buildings from the total. The last 20 years of statistics show that on a floor area basis nearly three quar­ters of all buildings destroyed were wooden. Also about two thirds of the all buildings destroyed were residential. Of residential buildings de­stroyed wood construction represented almost 90%.

Kudos to policymakers in Japan for collecting and making transparent such information. Why does the US not collect and publicly disclose such data? Sadly the US government appears overly influenced by homebuilders and the wood industry to the detriment of its national resilience.

Over a recent 20-year period US cement intensity averaged about 95 tons per million dollars of construction. Residential intensity stood around 60 tons per million dollars. However most of this intensity is in multi-family construction. Single-family housing would be a fraction of that. By compar­ison Ger­many consumed approximately 115 tons of cement per million dollars of total construction. Germany is 20% more cement intensive than the US, even though it faces far fewer natural hazards. Its Resilience Capacity is supe­rior and provides a strong advantage to its national economy.

Over the last two decades the total cement consumed by the same three states has risen from a quarter to a third of US consumption. These are Texas, California and Florida. They account for 27% of US population. Alabama, a state with similar hazards to Florida but ranked low on building codes by IBHS has 25% lower per capita cement intensity. Not surprising that the strength of a state’s building codes and its cement intensity might also be correlated.

The US cement industry has 100 plants in about 40 states. Capacity utili­zation is currently around 75%, with 80% of this capacity built or modernized after 1975. There are around 23 companies. About 75% of capacity is foreign-owned, two thirds of which are European-based.

During peak construction years the US imported cement from Europe, South America and Asia. If it wished to permit additional ca­pac­ity the country has plenty of raw materials to do so. However it appears that recent US pol­icy favors more importing, rather that increasing domestic capacity. This will likely put it in a strategic disadvantage when future global de­mand for resil­ient materials limits import flexibility.

Ready mixed and concrete products segments are much more dis­persed. There are over 2,000 ready mix companies with about 20,000 plants. Many remain family-owned businesses in their second and third generations. As the product typically does not travel more than 50 miles from a plant, every county has one or more plants.

The industry is predominantly run by engineers and operators, who over the last half-century mostly clung to a narrowly defined vision of their business. Their greatest strength is continuously investing in modern­izing and improving their operations. Their greatest weakness is relatively poor and underfunded marketing and promotion, especially to end-users and the public. Generally, they have also been out-lobbied and out-spent in govern­ment relations by producers of less resilient materials. Hence others often paint the industry’s public image.

On the other hand, they receive no government subsidies, funded market-related projects or other forms of assistance, in contrast to the hundred of millions of dollars of public monies both US and Canadian governments have doled out to the wood industry. At least they don’t have their hand in taxpay­ers’ pocket.

Many in the industry react defensively due to perceived environ­mental shortcomings, rather than proactively based on their products’ superior re­sil­i­ence. They spend more time worrying about competition within their own industry than effectively challenging competing materials. If they remain the ‘Everest’ of resilient construction it is mostly by default, rather than by their own making. However in recent years this mindset appears to be slowly but finally changing. For example 6 years ago the industry partnered with MIT to form the Concrete Sustainability Hub, a center of innovation both in the basic material, as well as its socially beneficial applications.

At this point I will critique myself for having worked over two decades in the industry. In addition to being a senior executive I served in positions as chair for the national trade association (Portland Cement Association) and for a sustainability collaborative of over twenty related industry associations (Concrete Joint Sustainability Initiative). At times I have been critical and tried to drive change from the inside to the extent possible. Now I can re-ex­amine things from the outside.

In retrospect, to appear more credible I should have worked in and retired from the wood industry. But even if I had, my issues and concerns would be the same, perhaps even stronger with the benefit of additional inside knowledge—be­cause my primary loyalty and passion is to resilience itself and not any industry.

Chapter 26

Acts of God or Man: Enforcing Accountability

In common law an Act of God is an overwhelming event caused exclu­sively by natural forces whose effects could not possibly be prevented (Cornell University Legal Information Institute). The same source notes that statutes often broaden this to include all natural phenomena whose effects could not be prevented by the exercise of reasonable care and foresight.

In his 2006 book ‘Acts of God: The Unnatural History of Natural Disas­ter in America’, Ted Steinberg questions whether the disasters the US faces are really Acts of God or mainly caused by human decisions. Steinberg is a pro­fessor of history and law at Case Western Reserve University. He points a finger at government and private interests as being largely responsi­ble.

Nature may generate hazards but humans cause disasters. In prior chap­ters we identified many acts of commission and omission by governments, pro­fessional organizations and profit-seeking businesses that have led to a dis­aster-vulnerable built environment, most of which continue to this very day.

Who is to be held accountable? Should we stop blaming God (or Mother Nature in secular terms) and begin holding those who are really re­sponsible?  ‘Acts of God’ only distracts from assuming human responsibility. There are many things humans can and should do to improve resilience but deliberately fail to. There is clearly a failure of ‘reasonable care and foresight’ that constitutes negligence. Hammurabi thousands of years ago had it right. Unfortunately we appear to have lost it.

Insurance often creates another distraction away from those truly responsible. We focus on holding insurance responsible when they played little role in cre­ating the failed processes or rules under which structures were built, and are mostly ignore when they do call for higher standards. Since disas­ters usually involve combinations of hazards (water, wind, fire and/or seis­mic), insurance disputes typically evolve around what hazard caused what damage, rather than why the structure failed to withstand them in the first place (and who exactly is responsible for that).

Insurance agents are required to be diligent in informing consumers what types of coverage they should carry and what hazards or events are excluded.  Many legal cases have also arisen from this. As a result insurers continue to make their terms and conditions denser and less understandable to avoid be­coming responsible for things they never intended to cover.

US legal liability has been a strong force in driving accountability and responsibility in many areas of society. In recent decades the green movement has effectively used the legal system to drive legislation, environmental regulation and enforcement – sometimes going to extremes. Many of the large US environmental organizations essentially have evolved into law firms with fund-raising arms.

Has the time come for the resilience movement to begin employing similar strategies? I would personally prefer that the parties who system­atically procrastinate and obstruct greater resilience come to their senses; but if they don’t quickly enough, it may become the final resort. The stakes are simply too high.

The building code system presently serves as a legal shield protecting those responsible and allowing them to profit from creating a non-resilient built environment. It essentially has become government-endorsed mass de­struc­tion. Said another way, government has (by commission or omission) le­galized gambling against nature in every state.

Can that shield (or veil as lawyers often call it) be pierced? Can builders, relevant suppliers and the government itself be held accountable for their acts when it leads to forewarned and predicted destruction? Not being a lawyer I cannot comment. However I would challenge legal minds to consider it. If the ‘greens’ have done it, certainly the champions of resilience should be able to.

Government often relies on sovereign immunity. Specific laws further immunize them from liability. One of these is the Flood Control Act of 1928.  It immunizes government when its flood control projects fail, such as the lev­ees in New Orleans that broke during Katrina. However even this can be pierced if negligence is proven. Unfortunately such cases rarely get to a final court decision. Disasters have increasingly become more media-focused and po­liti­cized. In order to mitigate, guilt-conscious governments offset public outcry by increasingly using taxpayer monies to pay out aid and recovery funds. In reality though all society looses.

The law holds builders and other property professionals liable for fraud or negligent misrepresentation. What would need to be proven is whether they make an affirmative misrepresentation regarding possible damage from a haz­ard or susceptibility to disaster.

What if an injured party (or even better, a class action group) claimed in court that homebuilders and their relevant suppliers were negligent with regards to disaster hazards? The latter’s defense position would be that they were simply building to official codes and the hazard was an unfortunate Act of God. But could they claim being uninformed and unaware that such haz­ards occur and that their designs and materials were unsuitable to withstand them? Is that not exactly what proponents of greater resili­ence are telling them every time those responsible oppose strengthening building codes?

Not only do they have knowledge of this but also they systemat­ically argue against it, or claim the need for more studies (a known delay tactic). Actually we do not need to spend tens of millions of dollars studying and an­alyzing what we already know by a preponderance of the evidence. Therefore when proven wrong by repeat disas­ters, they could be held negligent and liable for damages; at least for what they built (essentially what Hammurabi called for). If courts start weighing-in on such cases, perhaps builders and their suppliers will finally become proactively diligent on hazard resili­ence.

Holding those directly responsible accountable is often the best and fast­est way to overcome entrenched resistance to change. The present ‘system’ has proven very ‘resilient’ in protecting the status quo. It could use a legal  ‘kick’ in order to better protect people and property.

Chapter 27

Collateral Damage: When Government and Resilience Collide

It is worth noting how insecure we become when the built environment around us fails. Many disaster scenes suffer the compounded damage of loot­ing and crime. We observe post-destruction how quickly human behav­ior de­grades. Humans switch to survival mode, which often involves preying on the misfortune of others. A resilient built environment is essen­tial to maintaining social order when extreme events occur. While this is a pri­mary role of gov­ern­ment, it all too often shoots itself in the foot when it comes to resilience.

In 1992 the US Supreme Court decided a case that would create yet an­other obstacle on the road to resilience. Lucas versus South Carolina Coastal Council involved a dispute where local government was actually trying to do the right thing. South Carolina’s coast is highly exposed to hurricanes and floods. The Council was implementing the state’s 1977 Coastal Zone Man­agement Act and its 1988 Beach Management Act. This required owners of lands in vulnerable areas near beaches to obtain building per­mits, which imposed stricter regulations.

Lucas claimed these regulations deprived him of economically bene­fiting from his property and therefore the state should compensate him as if it were an eminent domain seizure (a ‘taking’). The court sided with Lu­cas. Ulti­mately the state purchased the Lucas’ land and later resold it to other private parties. Today houses sit on the site. So presumably Lucas just didn’t want to follow the stricter regulations (or the state loosened them up).

Unfortunately this decision opened the door for any party economi­cally affected by stronger building regulations to potentially claim a taking of their value. It caused states to become more cautious in enacting and enforcing such regu­la­tions, which causes resilience to suffer.

This is only one example where one part of government inadvertently un­der­mines the resilience efforts of other parts. We saw in chapter 8 how, for many dec­ades, government-provided flood insurance encouraged people to take more flood risk; in chapter 14 how one part of the executive branch, the Department of Agriculture, has become the zealous promoter of products that harm the efforts of those trying to address fire and wind hazards; and in chapter 15 how the trade and social policies of one country, aiming to protect local jobs, can affect the resilience of another.

Indeed the path to disasters is paved with good intentions. Many of these policies in isolation reflect generally accepted principles of affordability, non-discrimination, privacy, competition regulation, disaster support and eco­nom­ic development. However such principles can easily be abused and dis­torted within specific government programs.

  1. Affordability can be used to justify lower standards and over-em­pha­size short-term costs
  2. Non-discrimination can lead to ignoring and never addressing under­ly­ing risky behaviors
  3. Privacy can deprive society of critical information and reduce trans­par­ency on vital issues
  4. Competition regulation can lead to either overly aggressive rivalry or limited industry collaboration and sharing, when such is needed to ad­dress im­portant issues
  5. Post-disaster support can become a dependency and de-motivator to addressing the underlying root causes of vulnerability
  6. Economic development can morph into reduced standards, protecting jobs and support­ing industries to the point that they create social harm

Over the past half century US Resilience Capacity has been victim to all the above. Hence the poor state it is in should not be a surprise. Non-re­sili­ence does not happen by itself. It is built piece-by-piece over many years. It generates large profits for many entrenched interests. It grows and spreads like a cancer until it finally collapses under its own weakness.

Fragmentation makes it many times more difficult to see and address the big picture effectively. Codes are fragmented into thousands of jurisdictions. Multiple industry and professional associations analyze thin fragments of haz­ards and risks. The federal government is fragmented into many departments and agencies that often acting in opposite directions.

The building code system itself is designed to discourage any form of lead­ership. Instead it relies on committees upon committees upon committees.  Consensus thinking leads to mediocrity and feebleness, which results in com­promising core values. Groupthink eventually blinds even the brightest minds, which ex­plains why a country so rich in professionalism and talent has achieved such poor hazard resilience.

The federal government once tried to get a grip on residential resili­ence but proponents of ‘cheap and weak’ eventually derailed it. In 1935 the Federal Housing Administration (FHA) issued the first Minimum Property Standards (MPS). These aimed to protect government-backed mortgages and make sure properties at least survived the life of the loans. Over the next 20 years MPS evolved into a set of mini­mum building specifications that applied when local codes were low or non-existent. Its 1958 edition became a de facto na­tional residential building code.

Prosperity during the 1960s led to expansion of federal welfare in many areas including housing. In 1965 Congress created the Housing and Urban De­vel­op­ment Department (HUD), which assumed responsibility for MPS. In 1968 Congress further expanded government-backed mortgage lending by es­tab­lishing ‘Ginnie Mae’. However by 1979 the economy was entering a recession; inflation hit 19% impacting mortgage rates and home buying.  Home­builders sought ways to cut costs; unfortunately one of these would be to cut resilience.

In 1980 NAHB sent a report to HUD requesting that it drop MPS. It ar­gued that MPS had outlived its purpose and was no longer needed. The report claimed that building codes were becoming more responsive, and most com­munities who previously had inadequate code or no code at all were adopt­ing an updated building code based on a national model code. Of course that was NAHB’s opinion and 35 years later the record would show it to be far from true. Their real purpose was that HUD had raised MPS requirements (i.e. re­silience standards) to the point where they impeded the building of ‘afforda­ble’ houses. In other words resilience needed to be sacrificed in order to make homes cheaper.

Under industry pressure the government buckled. In 1982 during the early days of the first Reagan administration anything calling for reduced fed­eral intervention was in style. That same year HUD announced that one and two family MPS’s would be phased-out because they have largely accom­plished their purpose and that homebuyers’ interests can be protected with less fed­eral intervention. They essentially turned over the keys to the convo­luted buil­d­ing code ‘system’ and the private interests that dominate it.

From then on single- and two-family residences would be left to the mercy of homebuilders, suppliers and the ‘system’ with disastrous conse­quenc­es. The federal government’s abdication would prove a major blow to the resilience of the largest and most vulnerable segment of the built envi­ron­ment. After this point only disasters could affect the downward spiral that re­silience was taking. They would begin striking ten years later with Hurri­cane Andrew.

Since 2000 government at many levels has become a fan of ‘green’, often without understanding what green really means. It started with guide­lines for public buildings and expanded into incentives for private ones. However, al­most all these policies are resilience-blind. They risk making green a substi­tute for resilience, instead of resilience being a prerequisite for green. Among the biggest misrepresentations are hazard-vulnerable green investments that are miraculously labeled ‘resilient’.

There have been multiple efforts in Congress to pass legislation advanc­ing greater built environment resilience. So far the proponents of ‘cheap and weak’ have defeated them. Three times, in 2009, 2011 and 2013 representa­tive Mario Diaz-Balart of south Florida introduced the Safe Building Code In­centive Act (HR 2592, 2069 and 1878). It would amend the existing federal emergency assistance law to encourage states to adopt and actively enforce statewide building codes inclusive of single and two family homes. The in­centive would be an additional 4% in disaster emergency aid if the state met certain building code conditions. The last bill had 47 co-sponsors almost equal from both political parties. Yet three times it was left to die in the House Committee on Transportation and Infrastructure: Economic Develop­ment, Public Buildings, and Emergency Management Sub-Committee, a com­mon way of stopping proposed legislation. A sister bill in the Senate had sim­ilar fate.

The same Congressman in 2013 introduced the Disaster Savings and Re­silient Construction Act (HR 2241). It would provide a post-disaster tax in­centive to homes and commercial buildings that are rebuilt code-plus accord­ing to IBHS Fortified guidelines. Again opponents killed the bill by letting it die in committee. Kudos to representative Diaz-Balart for his persistent ef­forts. He knows first-hand from Florida’s experience that investing in Re­silience Ca­pacity pays. Shame on those who oppose or ignore such initiatives, suc­cumb­ing to private interests.

To understand the battle behind these bills, in the case of HR 1878 twenty organizations registered to lobby. Half were insurance re­lated, while the other half were disaster and industry related. One of these was NAHB. A total of 88 lobbyists were engaged. Six were from NAHB. In the US capital it is considered a ‘heavy hitter’. It spends almost $2.8 million a year employing 46 lobbyists, 30 of which have held previous government positions. During the 2014 election cycle it donated $2.3 million to politicians. Its second larg­est contribution category was to members of the House Transportation and In­frastructure Committee. That it succeeded in kill­ing the bill underscores NAHB’s influence.

In recent years the US has tried to play a greater international role in ‘green’ issues. Lets look at its international presence on resilience. In March 2015 governments from all countries met in Sendai, Japan at the 3rd World Confer­ence on Disaster Risk Reduction under the auspices of the United Nations. This was the third such major gathering in 20 years. All conferences have been held in Japan, the first (1994) in Yokohama and the second (2005) in Hyogo. It reflects the country’s strong commitment to resili­ence. Japan is one of the most densely urbanized and hazard-prone places in the world; earth­quakes, hurricanes, floods, and fires afflict the island nation.

At this meeting the world’s nations renewed their vows of making resili­ence a higher priority, to undertake specific actions and to share more infor­mation and resources. 187 nations signed the Sendai Framework for Action: 2015-2030. Although voluntary with many specifics yet to be deter­mined it is a milestone agreement, on par in importance with the 1992 UN Framework for Climate Change (UNFCC). It contains many important goals such as reducing the cost of disaster losses not just by ‘building back better’, but more importantly by ‘building better from the start’. It also calls on more disaster risk disclosure by publicly traded companies and incorporating disaster risk into financial lending criteria.

The subsequent COP21 Paris Agreement references the Sendai Frame­work. If you closely study the Paris Agreement you will notice it mentions climate adaptation (i.e. resilience to hazards) twice as frequently as it does climate mitigation (reducing greenhouse gasses). This may signify an interna­tional shift towards addressing the escalating economic consequences of inad­e­quate Resilience Capacity, made even worse by future climate uncertainty.

The US administration has played a relatively secondary role in the UN’s resili­ence initiatives, mostly focused on warning, response and humanitarian activities. This is no surprise given its own poor resilience performance. On the other hand countries like Japan, Switzerland and Chile have demonstrated greater leadership in becoming role models.

The challenge with such agreements is moving from platitudes to spe­cific actions. One impediment is that most attending country representatives are emergency re­sponders, the national firefighters of disasters. Their input is invalu­able since they witness disaster first-hand, but they have limited ability to battle the root causes of vulnerable development.

Unfortunately missing from this conference are those mostly responsible for creating what is destroyed. They are the economic development, fi­nance, building, housing and infrastructure people. They are still elsewhere, contin­uing to do what they have been doing. Until we integrate economic de­vel­opment, finance, and building/infrastructure construction with re­silience, we will be mostly firefighting; and we will continue to call for more ‘firefighters’ (plus alarms, hoses, trucks etc.). It’s the 4th Law.

Which touches on the problem of how most view resilience. It is reaction to disaster, rather than pro-action to develop a more disaster-re­sistant econ­omy and society. Doing so is equivalent to placing a hospital’s medical emergency re­sponders in charge of wellness health programs. The first re­quires effec­tive and rapid communications and transportation, proper emergency facilities and equip­ment, adequate supplies and skilled readily available round-the-clock staffing. Fast decisions and reaction are critical and therefore the man­agement approach tends to be highly command and control.

By contrast a wellness center’s success depends on creating aware­ness, attracting participation, educating, promotion, motivation (peer and in­divid­ual), enacting incentives (and disincentives), training, practicing enforcement and positive repetition. Gaining and sustaining longer-term personal commit­ment is critical. Its man­age­ment approach centers on communicating, educat­ing, coaching, training, and re­warding.

A high percent of the traffic hospital emergency units see is the result of prolonged neglect of wellness, i.e. bad lifestyle habits. However emer­gency units can never address these underlying wellness problems. At best those af­fected, if lucky enough to survive will register a wake-up call. Even then they will need to go elsewhere for wellness help. Ironically, most left on their own go back home and continue doing whatever they were doing before.

Similarly the best disaster response team in the world will never solve the issues underlying inadequate resilience. It is unrealistic to even think that a response-focused organizational structure and culture can create and manage a successful national resilience strategy. Yet that is what most countries including the US are doing. Unfortunately few policymakers under­stand the difference between responding to disaster events and changing structural risk. They primarily focus on what they know best: preparing for and exe­cuting emergency response measures.

When reconstruction comes it all too often ignores the underlying root causes of the problem. Initially there are a lot of studies and re­views by teams of professionals, while in the background special interests scurry to contain the fall-out. After a while the ‘emergency responders’ withdraw, sur­ren­dering follow-up responsibility back to the ‘system’.

Did anyone realize that the system is why the hazard became a disaster in the first place? Yet we place the authority for rebuilding back in the hands of those who managed to make a mess of it in the first place. Which should ex­plain why most of the time we usually get the same results.

In general, governments commit the mistake of assigning resili­ence respon­si­bility (often called Disaster Risk Reduction or DRR) to their emer­gency re­sponse and management agency. In the US this is the Federal Emer­gency Management Agency (FEMA), part of the Department of Homeland Security (DHS).

FEMA’s top administrator, Craig Fugate, is a literally a former fire­fight­er with an illustrious career in emergency response. The senior deputy in charge of mitigation and NFIP, Roy Wright, is a political scientist who was a Washing­ton or­ganizational consultant before becoming a FEMA risk analyst several years ago. They may be great people but probably not the right people to take on changing the ‘system’. However to their credit they have done more than any of their predecessors to bring disaster mitigation to the fore­front of policy dis­cussion.

FEMA’s boss is the DHS Secretary, Jeh Johnson, a lawyer who previ­ously rotated between private practice and the Department of Defense. In the position for two years he has plenty on his plate besides FEMA: terror, bor­der protection, coast guard, immigration, secret service and airport security.  Post-Sandy DHS realized how serious the threat of natural disasters is to US security and began formulating a strategy. They now recognize it is a na­tional issue which makes it a federal issue, which is not something the system likes or wants to encourage.

Because FEMA lacked the expertise or focus on built environment resili­ence DHS originally turned to its Science and Technology Directorate (STD) for help. Recently an MIT engineer who spent most of his career in public and private defense positions has led this department. In 2009 taking a ‘de­fense-minded’ approach to things, STD created the High Performance and Integrated Design Program. This aimed to better prepare buildings and in­fra­structure to recover from manmade and natural disaster events such as ex­plo­sive blasts; chemical, biological, and radiological (CBR) agents; floods; hur­ricanes; earthquakes, and fires. Their strategy was as follows:

  • Building codes are minimum requirements that offer limited resili­ence protection
  • It’s going to be very difficult to change the system and raise them
  • Instead develop a new set of national standards, called High Perfor­mance Standards, which will be above building codes
  • Then try to get people to voluntarily use these instead of the building codes produced by the system

In essence a military flanking tactic. Very good! Except that flanking a whale with a minnow is not going to accomplish much; a resurrected MPS without the teeth. Until now all they have produced are tools and publica­tions, workshops and webinars. But who if anyone is using them?

To do this they turned to two other organizations not overly entrenched in the system: The National Institute for Standards and Testing (NIST) and the National Institute of Building Sciences (NIBS). Both are great organiza­tions with technical resources and knowhow. They have helped DHS produce a lot of interesting reports and papers.

Last year NIST awarded a $20 million multiyear contract to the Univer­sity of Colorado to develop more decision models for state and local officials. Although the program directors’ strong wood and seismic-centered connec­tions raise doubts about the project’s broadness, lets wait and see what they produce.

NIBS is a quasi-government non-profit organization created by Congress to promote innovation in buildings and provide expert advice on public properties. It formed several commit­tees to address resilience issues including the Multi-hazard Mitigation Committee (MMC). Their recently produced white paper titled Developing Pre-Disaster Resilience based on Public and Private Incentivization is actually quite relevant and thought provoking.

The problem is who’s listening? Definitely not homebuilders who are adding about a million non-resilient homes a year to the US built environ­ment; not even homebuyers. Because what we lack are not reports and tools.  We’ve known for years how to build structures that can withstand hazards.

If DHS really wanted to make their mark on national resilience, it would take a lesson from the history of car safety (not taught at the Defense Depart­ment). It would team up with the insurance industry and for several years blast the media across the board with images of destroyed homes and mes­sages that building codes are basically inadequate. It would raise awareness and safety concerns particularly amongst the most vulnerable groups: women, children and lower income families. In a few years everyone will be asking for more resilient buildings.

This requires a different type of DHS and the uproar from the system would be tremendous. However, if you don’t generate reaction you’re proba­bly not doing much. Unfortunately it will take more disasters like Katrina and Sandy to galvanize government into determined effective action. They are coming.

In the meantime, stay tuned for the next DHS resilience report.

Chapter 28

Private Action: Balancing Principles With Profit

The private sector owns most of the built environment, while the public sector probably owns less than 10% of total space and 25% of value depend­ing on how you look at infrastructure. The private sector also suffers a dispro­portionate share of economic disaster losses—over 80%. Public and institu­tional sectors already generally build more resiliently and carry more insur­ance. Finally, except for a few government-owned materials produc­ers and builders, the private sector is almost exclusively involved in construct­ing the built environment.

Thus the private sector is both the built environment’s main prob­lem, as well as the key to its solution. Of course, it is vast and diverse ranging from home­owners, to property investors, to small business owners, to large corpo­ra­tions to industrial facilities.

When it comes to resilience, large businesses and industries tend to in­vest at or near public resilience standards. That is why you don’t hear much about their fa­cilities suffering in major catastrophes like Andrew, Katrina and Sandy. In­surers like FM Global are partly to thank for helping them manage risks. When they directly suffer losses it is mostly the consequence of acci­dents (residual risk), not a sign of general non-resilience (structural risk). However they are affected when their em­ployees, customers, suppliers, and dis­tribution are vulnerable.

The core of the private sector’s resilience problem lies with homeowners and small businesses. They form the largest segment (space-wise) of the built environment and suffer the most from hazards.

In the developing world you might reason that many generally lack re­sources and know how. Ironically, as many seem to suffer in the de­veloped world. Is it simply that they simply do not believe in resilience and prefer to ‘gamble’ their fam­ilies’ lives, livelihoods, businesses and possessions? In my opinion this repre­sents a small fraction. The real driver is elsewhere. By now you should know.

They suffer because they are the ones most at the mercy of the materials and building developer/producer industries and who solely depend on the protection of building codes (or lack thereof). The first is a private sector problem, the second a public one. As discussed in prior chapters, the two are interrelated and form the basis for the ‘system’.

For anyone in doubt let’s make this clear: the private sector is in business to make a profit. How else can it otherwise sustain itself? Govern­ments tax, non-profits have donors and children (humor) beg for allow­ances. The only way the private sector can survive is to sell something of ‘perceived’ value and collect more than the cost of making it. Is this bad? Abso­lutely not.

It also does not preclude the private sector from having values that bene­fit society. Govern­ments and non-profits do not hold a monopoly on princi­ples. Most businesses share the same values that governments and non-profits have. Those in the private sector are often the same people engaged in many non-profit and civic activities during both their work and personal hours.

However businesses have an easier time balancing profit with principles when the two are aligned. It becomes trickier when they are not. What if one day a business realizes it is doing something that eventually harms society? What if that something contributes to social disaster vulnerability?

Businesses that find themselves in that predicament have one or more choices:

  1. To deny and rationalize
  2. To influence perceptions
  3. To influence policies
  4. To offset by doing ‘good things’ in other areas
  5. To reduce or change what they are doing

The first three of these actually make things worse. The forth at best partly neutralizes the negatives. The fifth is the right thing to do. However, the more profit involved and longer the history, the harder it is do #5. The kneejerk reaction is #1, as profits can often be more addictive than drugs. Some of those profits are then allocated to fund #2-4: more promotion, edu­cation, political advocacy and public relations.

This works for a while and buys time to continue making profits. But as negatives continue to build-up, sooner or later social out­cry over­shadows all the patching of #2-4. The business eventually is forced to do #5.

Such was the story of US carmakers during the 1960’s. Fifty years later it is the story of homebuilders and wood suppliers. In the face of urbani­za­tion, coastalization and growing hazards, the product they have sold for over half a century—lightweight wooden homes—is failing to perform. They have grown into profitable multi-hundred billion-dollar industries, em­ploying thousands. Now as evidence mounts that their prod­ucts are not resilient they face the worry of changing, or re­ducing what they have been doing for so long.

Their reaction is predictable. Denial and rationalization, combined with increased spending for promotion, education, political lobbying and public relations. Their arguments are known: affordability, jobs, green, local auton­omy, voluntary requirements, economic development. In isolation these all ring positive but when placed on the scale of social balance they cannot offset the big negative: they contribute to enormous human and economic losses.

They are buying time, maybe a couple more decades of protecting the status quo. Eventually the weight of social losses will mute all the publicity, promotion and influence. Perhaps federal standards (MPS with teeth) will strengthen codes and houses will finally become more resilient, or awareness and resilience transparency will drive changes in consumer behavior.

Wooden homes won’t disappear, like cars didn’t. They will just become better. In wind-hazard locations many buildings will gravitate towards materi­als of greater resilience, some in hybrid forms. Other designs will use more and heavier wood elements and connect them better to foundations and roofs.

Overall more construction materials will be needed to create a more re­silient built environment; more engineers and inspectors too. Wood con­sump­tion may go down but probably not as much as the industry fears. If it does go down it will be because of less use for rebuilding damaged structures rather than from new construction. Maybe Canadian exporters will have to slow down on their tree cutting. They can then claim with certainty to becoming greener, while the wood-workers Canada so much worries about could be retrained to build resilient houses.

From an initial investment perspective it may be a more expensive built environment, but not as expensive as many fear. As with cars, innovation, training, experience, competition and volume will drive down costs. The ben­e­fits will far outweigh the initial investment difference: reduced private, insured and public disaster costs, fewer human losses and disrupted lives, less lost productivity affecting both private and public revenues, and finally less re­sources tied-up in Emergency Capacity.

Homebuilders will compete for consumers based on their disaster-resili­ence features, not just their kitchen counters and cabinetry. Communities will compete to attract businesses based on their resilience profiles, not just their tax incentives. As experienced with cities in the past that rebuilt resiliently post-disaster, investing in Resilience Capacity boosts economic prosperity. The opposite is also true: being stuck in Urban Disaster-Resilience Cycles leads to economic stagnation.

A disastrous cycle can be converted into a virtuous one. Do we need to experience a disastrous tug-of-war to get there? Disasters themselves are enough of a battlefield. Adopting greater resilience should not be a battle. Yet op­ponents of resilience have turned it into that.

Can all parties work with government to find ways to get us faster to the other (safer) side of the river? Society will benefit enormously if it can bypass another decade or two or three of disaster-vulnerable construction. If they agree to back off their opposition to raising the resilience bar, per­haps we could even justify aiding the homebuilding and wood industries in making the transition changes to a more resilient society and re-train their workforces.

We should also offer assistance and incentives so that lower in­come con­sum­ers and smaller businesses can afford more disaster-resilient buildings. In a spending-conscious political climate this is often viewed with skepticism, probably because government so often fails to deliver on its promises. How­ever incentives for creating a more resilient built environment is not ‘spend­ing’; it is ‘investing’—something governments, including the US ap­pear to have forgotten how to do. It has attractive returns for all society.

So far we have mostly discussed the problematic aspects of the private sector. Let’s now talk about the positive elements, of which there are many encouraging examples. Here is a sample:

  1. Carl Schneider’s family has brokered property insurance for several gener­ations in coastal Alabama and Mississippi. With family roots in Swit­zerland he always admired European construction practices, while at home the hazard-prone Gulf coast cycled from one disaster to the next. After Katrina he realized he had to do something. He learned about IBHS’s Forti­fied program and formed a group of grass-roots supporters to advocate and promote it.

They eventually organized into a non-profit organization called Smart Home America. He knocked on politicians’ doors arguing that coastal codes were too weak, convinced skeptical insurers to offer discounts for Fortified buildings and nudged homebuilders and contractors to get involved. It took more than five years. Initially many disliked him because he was rocking the boat. But he was persistent and passionate and in the process learned a lot about materials and construction, becoming the local go-to person for resilient homes. While wary of green on its own, he promotes integrating energy effi­ciency into resilient designs to double the benefits.

Today thanks to Carl Schneider’s initiative, two of the most hazard-vul­nerable states with a history of poor code practices—Alabama and Missis­sippi—lead the nation in the number of Fortified homes. This number exceeds 1,000 and is growing rapidly. One early project was a Habitat for Human­ity home to demonstrate that resilience can be applied to affordable lower income prop­erties. Today the local Habitat chapter has built over 200 Fortified homes. Smart Home America is now helping organize similar groups in other vulner­able areas of the country. It is an initiative worth supporting and expanding.

  1. Stirred from the aftermath of Hurricane Andrew, Leslie Chapman Henderson pulled together a team of volunteers to form a consumer education and advocacy group for residential disaster resilience. It initially focused on Florida but in 2000 went national under the name Federal Alliance for Safe Homes (FLASH). FLASH became a vocal proponent of code-plus construc­tion. In 2006 it partnered with Florida officials on a $250 million resilience program called ‘My Safe Florida Home’. Almost 350,000 homeowners used it to improve their homes and saved over $70 million in insurance premiums.

In 2008 FLASH opened an interactive ‘edu-tainment’ resilience experi­ence at Disney’s Epcot theme park in Orlando called Storm­struck. It demon­strates to children and adults alike how adding (or subtract­ing) resilient fea­tures to a house affects disaster vulnerability. More have 5.5 million peo­ple have visited and it is one of the park’s most popular attractions.

Today FLASH has more than 120 private, public and non-profit partners.  They participate in many local grass-roots resilience efforts, including the re­cent Memphis seismic battles discussed in chapter 24. FLASH brings together many resilience solution providers and supports innovation and new practices. Several FLASH part­ners actually practice resilient wood solutions. They repre­sent a small subset of their industry, but form role models that you can simul­ta­ne­ously raise the resilience bar and compete in wood.

FLASH has also proposed that every new home bear an informational decal (similar to that found on cars and major appliances) with information on the builder, engineer, inspector, year of construction, and code built to (I would add elevation and design wind speed). It would be a major step forward for transparency, but one that entrenched interests will strongly oppose.

  1. John Bowman had a small family contracting business in Illinois. He built concrete floors and basements for homes and was proud that his projects were watertight. After Katrina he realized his expertise was needed in the Gulf coast so he moved his business and family there. He realized that local builders had little experience with watertight basements and retain­ing walls. Sloped land was either left behind or poorly utilized in home designs.

He started building resilient homes and getting them certified as Forti­fied. On his own initiative he built an innovative resilient house that in­volves a hybrid of wood, steel and concrete materials. The concrete is sprayed on the outer walls with a gunite technique often used for swimming pools. He believes this can one day be made cost competitive not only for new code-plus homes but also to make existing wooden homes more hazard-resilient. Kudos to him for breaking away from the ‘keep-the-bar low’ pack. Someday the di­nosaur mass producers of homes will learn that there are better ways than the ‘cheap and weak’ business model.

  1. In 2008 Holly Tachovsky helped start a business that provides readily online the building permit history of homes. The company called BuildFax has amassed a growing database that includes over 70% of US resi­dential and commercial permits, in more than 7,500 cities amounting to over 90 million properties.

Insurers use this information to reliably check the age of a roof, given that the roof is the most vulnerable part of a low-rise building. It also helps real estate appraisers prepare loan appraisals. Such in­formation is also useful to homebuyers. Some cities like Decatur, Ala­bama, now offer free online prop­erty reports to the public. Why shouldn’t every city? BuildFax is helping cre­ate an open standard for a common online format. Although it presently does not contain specific resilience indicators other than permit history, this infor­mation is a win for building trans­parency.

  1. Coastal Risk Consulting (CRC) is a Ft. Lauderdale, Florida-based start-up business that offers property owners, buyers, appraisers, lenders, insurers and others an easy-to-understand rating of the property’s risk to future sea level rise. It uses technology originally developed at Florida Atlantic University’s Center for Environmental Studies.

Information provided by CRC adds to consumer transparency and allows decision makers to incorporate resilience into their valuations and action.

The company’s President, Albert Slapp, is a lawyer who formerly led a successful challenge of Miami-Dade County’s design for a new municipal sewage facility. As a result, the county was required to incorporate future sea level change into the design of this critical infrastructure.

  1. Many large corporations realize that resilience is a key compo­nent to sustainable business development and are incorporating it into their core strat­e­gies. FedEx has incorporated resilience into its investment and op­erational planning and builds code-plus facilities. They supported stronger seismic codes at their hub in Memphis. Since 2013 they sponsor the annual FedEx Award for Innovation in Disaster Preparedness. They also have programs to help small businesses become resilient, many of who are their customers.
  2. Hershey, a global confectionary producer, has made resilience a key component of its facility investment and planning process. It relies on FM Global to help set the bar for building its facilities rather than blindly follow­ing local codes.
  3. Sims Metal Management is the world’s largest publicly traded metals and electronics recycler and prides itself for secure and sustainable re­source management. Six years before Sandy hit New York it made an important de­cision concerning resilience, putting its money where its mouth is. In design­ing a new recycling plant on the Brooklyn waterfront, it invested 5% more on capital to go code-plus.

While many might be figuring-out loopholes and grandfather exemptions tactics to build below current code, Sims Metal elevated the base floor 4 feet above what was required. When Sandy knocked-out most of the riverfront area, that proved the difference between flooding and not flooding. Engineers originally esti­mated the design would protect them from a 40-year flood event. It came in 6 years. Their resilient investment prevented them from joining the ‘flock of turkeys’ when the black swan hit.

  1. Margot Brandenburg founded a hybrid for-profit/non-profit enterprise to develop, finance and insure resilience upgrades for homes in the wind-hazard-prone US Atlantic and Gulf coasts. The company goes by the name MyStrongHome. To-date it has completed a pilot program rebuilding roofs to Fortified standards at 30 residential properties in South Carolina, Louisiana and Alabama. MyStrongHome finances the retrofits at no cost to the homeowner by using insurance savings to pay-off the resilience investment.

The model resembles the shared-savings programs that finance energy efficiency upgrades. By bundling project development, finance and insurance MyStrongHome presents a win-win example of business opportunities in the emerging ‘resilience services’ market. It aims to retrofit 10,000 homes over a five-year period.

  1. It is interesting to observe how many resilience innovators are women. Perhaps women are more sensitive to the need for safer and stronger structures. UN statistics show that women suffer disproportionately with disasters. Focused awareness marketing to women may be an appropriate strategy to drive changes in consumer preference (rather than the male-dominated building industry).

Elizabeth Strand is another example of a resilience champion. The daugh­ter of a Chicago-based brick contractor, she learned to work as a block and brick mason. After degrees in civil engineering and environ­mental science, instead of following a conventional career, she decided to apply her skills and drive to help the world ‘build back better’. She often expresses that a safe home is a basic human right (which implies that public codes leading to unsafe homes violate human rights).

About 10 years ago she founded Build Change, a US-based non-profit that trains contractors and communities around the world stricken by earth­quake and storm disasters to rebuild to higher standards. Build Change has participated in post-disaster reconstruction in many countries, including Iran, India, Philippines and Nepal. That this know-how originates in the US is further proof that we possess the knowledge and skills to build more resili­ently. What we lack is the public awareness and policy leadership.

  1. Hancock Bank has provided banking services in Mississippi’s coastal market for over a hundred years. That long history helped it appre­ciate the serious hazards in the area and act accordingly. For decades it invested in code-plus resilience. Its Hancock Bank Technology Center, a core component of its continuity planning, was designed to withstand winds that exceed 200 miles per hour. The media dubbed it ‘the fortress’.

Its resilient strategy proved itself when Katrina struck. Within a few days of the hurricane, while most of the area was without power the bank re­o­pened 40 branches. Both bank customers and non-customers (on faith by only provid­ing some personal information) were able to withdraw needed cash. In one week Hancock Bank injected $42 million into the community. It was a fi­nancial and psychological boost for people. Three years later the bank had collected over 99.5% of what it lent in that post-storm period.

People appreciate a business that has both values and resilience. Within 5 months the bank opened 13,000 new accounts and deposits grew by $1.5 bil­lion. With $6 billion in assets it ranked fourth amongst the county’s top performing banks. It should be no surprise that resilience and fi­nancial performance go hand-in-hand. Wall Street take note.

I would presume that when such a bank lends its money, it also examines the ap­pli­cant’s resilience profile. Resilient applicants are likely conservative risk takers and therefore better risks. The business of ‘resilience-based lend­ing’ could become an attractive segment for banks.

Who would you rather trust your business and money with? Someone who just builds to code, or even worse tries to get around or oppose codes (while they insult you by saying its actually good for you), or someone in­vesting code-plus? The more we can shed a spotlight on do’s and don’ts, the eas­ier it will be for consumers to make the right choice; the more businesses will select the code-plus side of the line.

We could go on for many pages. While this has been a sample of US pri­vate sector resilience champions, small and large who combine private skills with resilience, there are many more throughout the world worth publi­cizing.

It is appropriate to distinguish between businesses that internalize and practice resilience in their operations and those that sell resilience. Every emerging trend brings out imitators. Like with green, many companies will la­bel their products and services as resilient. Others will use green and resili­ent in the same sentence without understanding what the differences are. Without skin in the game, why not? The leaders will be those who can con­vince insur­ers and are willing to stand accountable for their performance against hazards. This is where the public would be served with greater transparency.

Profit is a great thing if it also benefits customers and society. Increas­ingly the strategic and economic case for resilience is becoming more appar­ent to the private sector: service, reliability, lower insurance, reduced losses, avoided disruption, consumer loyalty, reputation, competitive advantage etc. At its foundation are the built environment assets a business employs. The in­vestment to go code-plus when building, up­grading or leasing is only a frac­tion of the cost to later retrofit, or worse rebuild post-disaster. The best time to invest in resilience is up-front. Resilient investment is not simply making sep­arate stand-alone repair and retrofit investments. It is about in­corporated re­silience into every investment decision aiming to raise the bar from the mini­mum levels pre­scribed by the ‘sys­tem’.

A resilient business looks beyond its own facilities. It depends on sup­pli­ers, customers, distributors and employees. Any resilient-weak link in that chain can harm it. For example, companies would be wise to educate and en­courage employees to make resilient choices on their homes. Many companies have relocation policies. Why not incentivize those employees to move into code-plus homes? When disaster strikes the last thing a company wants is for criti­cal personnel to suffer at home. There could be more such ideas for cases where employees are moving within the same area.

Educating, helping and screening suppliers for resilience are all elements of a resilience strategy. With today’s globalized marketplace and just-in-time inventory strategies, the need for chains-of-resilience has become es­sential. A particular good time to discuss code-plus options with suppliers is when they are planning facility investments.

Finally customers who are not resilient can affect sales when disaster strikes. A business’ most reliable outlets may be its most hazard-resilient cus­tom­ers. Why not educate less-aware customers who are considering facil­ity investments on code-plus? This can result in both a more resilient cus­tomer and a stronger relationship. Customers generally appreciate sup­pliers who not only sell products and services but also share experiences that improve busi­ness practices. When that customer survives the next hazard because of help received, they will likely remember and stay loyal for some time.

Private sector chains-of-resilience can become a powerful force in ele­vating Resilience Capacity at community, national and even international lev­els. These should also link into the public sector, which is both a major cus­tomer and in some cases a supplier.

The broader financial sector can also play a positive role in these chains. Besides insurance and banking – which we have discussed – the in­vestment community is exposed to disaster vulnerability. Today the $80 trillion dollar investment industry operates essentially blind with re­gards to resilience risk. There are no resilience-reporting standards and verifi­cation for companies or funds. Many unknowingly (to them and their fund sources) have vulnerable assets in their portfolios. The value of securities could be significantly affected by weak­nesses or strengths in portfolio resilience profiles.

While today most major public companies issue social reports along with their financials, there is little to no mention on the disaster vulnerability of fa­cilities and supply chains. Are they code-plus or built according to some low current or grandfathered standards set years ago? A portfolio of hazard-resilient compa­nies over time will likely outperform a portfolio of low resilience peers in the same industry. The same would be true for property investments firms such as REITs. The need for investment resilience transparency will become a greater as disaster impacts continue to rise.

Over the last five years the UNISDR recognized the importance of the private sector in helping governments speed-up the transition to a more dis­aster-re­silient society. In 2010 Margareta Walhstrom, the recently retired Special Repre­senta­tive to the Secretary General on Disaster Risk Reduction, began inviting ex­ecutives from large and small businesses and a range of sectors and geogra­phies who shared a strong interest in resilience, to become more involved in dis­cus­sions with governments and other major social groups. The UN to its credit saw the wisdom of harnessing the knowledge, initiative and resourcefulness of business in addressing this enormous chal­lenge it faced.

In 2010 the UN formed a Private Sector Advisory Group (PSAG) of se­lect senior business executives from around the globe. It included a diverse cross-section of sizes, continents and sectors. I had the privi­lege to serve as its first chair from 2011 to 2013. In 2011 PSAG launched a broader net­work of private sector members called the Private Sector Partners (PSP). It aimed to serve as a channel for information sharing and collab­oration on lo­cal, sectoral and thematic resilience efforts.

One benefit of bringing a diverse group together has the learning that oc­curred between various private sector segments. This led to a clearer under­standing of how finance, insurance, engineering, construc­tion, devel­opment, energy, and manufacturing can better interact and support each other to create more resilient outcomes (stronger chains-of-re­silience).

The private sector took an active role in the negotiations that resulted in the Sendai Framework. This is in contrast to the minor engagement it had in the 1992 UNFCC. Contributions included language regarding ‘build better from the start’ in addition to ‘build back better’ originally drafted. Its engage­ment raised the private sector’s credibility in the eyes of governments. At Sendai private sector representatives put forward Five Visions and numerous member voluntary commitments. These are:

  1. Partnerships with the public sector to drive resilience at local and na­tional levels
  2. Built environment resilience driven by the public sector raising mini­mum standards and incentivizing the private sector to work voluntarily to­wards optimum practices
  3. Public and private financial investments decisions and disclosures that consider disaster risk
  4. Resilience-sensitive public and private sectors linking with other stake­holders to create resilient societies
  5. Identification, disclosure and proactive management of hazard risks be­coming standard business practice

Following the Sendai Framework, PSAG and PSP were merged with a third UNISDR initiative, called R!SE, to form the Alliance for Disaster Resilient Societies (ARISE). Over 100 business and business organ­izations are initial members, while non-business entities (such as universities) can join as affiliates. Members include global businesses such as IBM, AXA, Walmart, UPS, AECOM, ENEL, FM Global, PWC, Deloite, as well as many smaller regional and local companies around the world and from multiple sectors. I am proud to serve on its 12-person board.

ARISE has organized its activities around 7 work streams:

  1. Risk management strategies
  2. Investment metrics
  3. Benchmarks and standards
  4. Education and training
  5. Legal and regulatory
  6. Urban resilience (which I coordinate)
  7. Insurance

It plans to organize on the basis of work streams, regional/country net­works, sectoral and topical issues. In addition to volunteer activities, it also aims to raise resources for funded projects that promote awareness, provide infor­mation and educate business and communities on resilience. ARISE promises to become a vehicle for cata­lyzing and affecting global change in implementing the Sendai Framework. These developments will help fuel changes needed in the problematic US built environment. Interested compa­nies or organizations com­mit­ted to resilience can join ARISE through the UNISDR website.

However many in government continue to look cautiously and distrust­fully at the private sector, suspicious of being sold a bill-of-goods. Indeed there are those who live up to such fears. The pub­lic sector needs to carefully pick its resilience partners based on what they do, not just what they say. Some of these considerations include:

  • Do they oppose or support raising the resilience bar?
  • Do they have skin-in-the-game?
  • What are they already doing to make their existing spheres of in­fluence more resilient?

Many companies are doing exactly that and would make good partners. Others are not. Governments would benefit from understanding which private sector segments profit from the non-resilient status quo, oppose raising standards and undermine resilience. Some lobby intensely to block change. Officials need to be able to see through their claims of affordability, economic devel­opment and green, and create strategies to counter and convert them.  Building confidence, trust and effective partnering between private and public sectors will take time. Initiatives like ARISE provide a proper and facilitating context for enabling that to happen.

Steering the broad private sector in a more resilient direction is both the greatest opportunity and greatest challenge for creating a more disaster-resili­ent society. The right public-private alliances and partnerships can accelerate that.

Chapter 29

Disaster Cures: Lessons for Resilient Living

It is astounding that in the 20th century cures were found and suc­cessfully applied to twelve deadly diseases. As a result average life expec­tancy rose around the world. In the US it improved from 47 to 78 years. Global collab­oration effectively achieved disease eradication. Of course these cures worked because they were taken.

Today the life expectancy of our built environment is what we are chal­lenged to improve. Its immune system level is low. Viruses are multi­ply­ing. Its swelling density makes it more susceptible to massive destruction. Cures have been discovered but we have to commit to taking them.

Yet ‘witch doctors’ continue to hold us under their spell with their sooth­ing talk and deceptive elixirs. Emergency providers do their best to keep us func­tion­ing but we need to take the medicine. It is solely our decision.

We can collaborate and help each other. The purpose of this book has been to go beneath the symptoms and study the disease. For this it focused on the US, a patient at a mature stage of its development life cycle. The mas­sive dis­in­tegration of a large portion of its built environment is underway. What we observed and learned can help prevent others at earlier stages of their development life cycles from following the same path.

The below 30 lessons formulate the cure. They are grouped under three dimensions: Strategy, Tactics, and Application.


  1. Resilience is a national issue that must be addressed at a federal level. Yes it requires local input, implementation and collaboration, but its overall strategy and principles cannot be surrendered to local levels. There cannot be thousands of independent local resilience strategies. There cannot be hun­dreds of variations of acceptable risk taking. Each country needs a clearly defined national resilience strategy and five-year action plan.
  1. Resilience touches many social dimensions but creating a resilient built environment is near the very top of any national strategy and action plan. Social resilience, while important, cannot substitute for a strong and safe built envi­ronment where we spend most of our lives. The ‘cocoon’ that protects everything else is the biggest national investment and potential loss. It is un­fair to place the burden and expectations on social resilience because we fail in creating a strong ‘cocoon’. There are many other things that can go wrong beyond the build environment for which we will have to rely on social re­silience.
  1. A national resilience strategy for the built environment cannot ignore or exempt the residential sector. Infrastructure and public buildings get plenty of attention but homes are the largest and weakest link. Large post-disaster temporary housing, dislocation and reconstruction needs have enor­mous economic and social consequences.
  1. The hazard levels that each country chooses to base its codes and regu­lations on cannot be delegated to the back-room consensus processes of professional associations and semi-public organizations under the influence of industry interests. Consensus leads to compromise and national resilience is too important a principle to be compromised. Decisions that establish the level of destruction a society is willing to accept require public debate at the highest level. Neither can they ignore the possibility of black swans. As an equivalent to declaring war on disasters, resilience requires visible national leadership. The president of each country should be signing-off on it.
  1. Resilience is a strategy for national development and investment, not a strategy for ‘fighting fires’. Responsibility for a national strategy, plan­ning and execution cannot be placed under emergency response authorities. Ide­ally it should be a stand-alone entity reporting to the President. If not, then reporting to a department minister or secretary with responsibility for fi­nance, economic development, and national prosperity.
  1. The national resilience strategy should call out how high the bar is set with regards to the level of hazards the built environment should withstand. Ideally it should avoid prescribing how these will be achieved (i.e. perfor­mance rather than prescriptive). Let the engineers and insurance testing fa­cilities decide designs and materials that can meet these levels. However hold them more legally accountable for their designs. Governments are Hammu­rabi’s, not engineers.
  1. Investing in Resilience Capacity is one of the best strategies for pro­moting economic development and national prosperity. It is a source of competitive advantage vis-à-vis other nations and will become even more so as hazards (and economic decision makers) increasingly punish those who fail at becoming resilient.
  1. When the resilience bar is not set high enough a country risks being in constant catch-up mode. Its built environment and society face continuous hazard erosion. Smart national resilience strategies will set the bar a good distance above current hazard and urban density levels and aim to stay ‘ahead of the ball’.
  1. Raising Resilience Capacity also promotes greater economic and so­cial equality by raising the bar for everyone. Lower economic groups inher­ently have a lower capacity to overcome disasters. Therefore helping them to ‘step-up’ on the resilience ladder increases their chances of preserving their hard-gotten gains against future hazard risks.
  1. Countries should not blindly assume that just because another coun­try is more economically developed that its building codes and standards are more resilient. They should first independently decide how much hazard risk they are prepared to accept as a society. Then compare who is doing a good versus poor job at managing a similar mix of hazards.


  1. How high the bar is set depends not only on hazards but also on ur­ban density. As density increases hazard levels used in codes and regu­la­tions need to ratchet up, preferably in advance of urban growth. Rapidly growing ar­eas need to be raising the resilience bar the fastest. Sunset timeframes should be set for high-risk grandfathered buildings. These must consider the future outlook for hazards, not simply the past history.
  1. In addition to local inspectors, a corps of national inspectors should be created who randomly spot-inspect and can help local departments during construction surges. Their statistical findings should be made public.
  1. Other laws, regulations and government programs that impede or con­tra­dict strengthening built environment resilience need to be identified and addressed. These might be found in areas such as privacy, discrimina­tion, competition, trade, jobs, support for particular industries etc.
  1. Public awareness, education and transparency are national-level tasks, which can be adapted to local conditions. This can re-kindle the sense of micro-resilience that our ancestors possessed. It has to be continuous, con­sistent, frank and at times ‘in your face’ (like the ads of terminal smok­ers we occasionally see). It cannot predominantly focus on disaster prepara­tion and response. More than half should address prevention in order to af­fect con­sumer attitudes, behavior and buying preferences. The building and insur­ance industries should contribute for two-thirds of its cost.
  1. Affordability is a very poor excuse for sacrificing resilience. We do not use affordability as an excuse to not fight disease. We collaborate to bring down the cost of producing the cure and help those economically chal­lenged to obtain it. Affordable should not become a synonym for dis­posable.  Instead of using affordability to justify setting the bar low and ac­cepting higher risks, a national resilience strategy can redefine it to mean making re­silient solutions more affordable; thus moving from ‘affordable disposable’ to ‘affordable resilient’. This involves both working with the building in­dustries to bring down costs and supporting those in need of help.
  1. Government should periodically review their social and economic pro­grams to verify they do not encourage hazard risk-taking that un­dermines resilience efforts. In the same context the availability and ease of post-disaster government aid should not cultivate expectations that breed apathy towards resilient investments. In order to reinforce local ownership of resilience, governments may declare that significantly less future aid will be provided to previously hit areas, if after 5 years repeat hazard impacts find them still unprepared. Continued negligence by local officials, busi­nesses and citizens should not be rewarded or encouraged.
  1. National statistics should be collected and publicized on buildings dam­aged from hazards including the construction characterization of these buildings. For major disasters these statistics should also include those buildings that survived.
  1. Green policies and programs are not a substitute for resilience.  These should all recognize that hazard resilience is a prerequisite and one of the best contributors to achieving green objectives and policies. Since cre­ating the built environment consumes a major quantity of natural resources, the less frequently we rebuild it the less burden on the environment.  Gov­ern­ments should avoid endorsing green rating systems that ignore building lifespans or labeling investments and initiatives as ‘resilient’ when they do not reduce disaster-hazard exposure.
  1. Governments should offer consumer and business incentives to in­vest code-plus. Such incentives can have a defined sliding-scale time period with the knowledge that higher hazard levels will eventually become code (i.e. the bar will be raised). They should also encourage and join chains-of-resilience where buyers and suppliers help lift each other to higher levels of code-plus hazard-resilience.
  1. Incentives for resilient investments should be encouraged within the private sector itself, such as more favorable lending terms, insurance rates, valuation appraisals, financial risk disclosure criteria, etc. Financial regu­la­tors should require clearer disclosures by publicly traded companies re­garding their hazard vulnerability, while lenders incorporate resilience in their lending criteria and terms.



  1. Long-term industries that find themselves in the unfortunate position of having to change or adapt their business due to the national resilience strategy can be publicly assisted in doing so. In return they should buy-in to the national plan and cease trying to lower the bar with contradictory mes­sages. With the resilience bar placed high (and over time moved even higher) innovation and competition amongst all building solution providers should be encouraged.
  1. Standardization, specialization and offsite fabrication are ways to re­duce construction costs and improve quality. However when these activities become large and dominant they often impede progress when the resilient bar needs to be further raised.
  1. Education and training programs need to assure a growing supply of qualified technical and trade professionals to design, construct and maintain buildings. An adequate and capable workforce is essential to managing the costs and quality of a more resilient built environment.
  1. In high hazard regions especially areas that have experienced disas­ter, all buildings including homes should require approval by a civil or struc­tural engineer.
  1. The property insurance industry is a country’s natural partner in strength­ening the built environment. A healthy private insurance sector can only exist if structural risk is reduced and managed. The tension between rates–high enough to cover major disasters and low enough to comfort consumers–worsens at lower resilience levels. Only building Resilience Capacity can reduce this tension.
  1. Government should avoid entering the property insurance business it­self. When private insurance is withdrawing government should question what is wrong with risk and how to restore a healthy market. The govern­ment’s business is to regulate the general level of risk in the built environ­ment, not to sell property insurance that prolongs higher risk.
  1. Governments can partner with the insurance industry to create ex­treme event ‘rainy day’ funds where a portion of property insurance premi­ums are con­tributed to cover major catastrophe losses. This partly addresses consumer complaints that in quiet years insurers enjoy ‘windfall profits’. It also ad­dresses re-insurer’s short memories in getting into rate wars. How­ever such funds should be kept and invested separate from other general public funds.
  1. Greater resilience transparency and visibility is needed to drive con­sumer behavior. Standardized building resilience metrics proposed by the insurance industry should be adapted and applied. Buildings that exceed prescribed performance levels can be encouraged to display visible resili­ence labels. The same information should be easily accessible to the public at online property databases. Resilience can become a routine component in property selection decisions.
  1. Accountability should be instituted (including legal) to hold those who create the built environment responsible for its performance against a higher resilience bar. This includes engineers, suppliers and build­ers.
  1. Suppliers and builders should be encouraged to warrant their build­ings and products for explicit resilience performance over longer periods of time. This could become the new dimension of competitive product differ­entiation, similar to cars.

The disaster vulnerability disease can be cured. The hardest part is mov­ing away from long ingrained habits and addressing entrenched economic in­ter­ests. If today’s leaders find it difficult to do so, perhaps emerging leaders will see it as a way to bring about a better future for their communities.

The only certain thing is that nations like the US, which have placed themselves in very disaster-vulnerable positions will continue to suffer major losses in the coming decades. At some point they will be forced to change. The sooner they realize this and act, the better it will be for their citizens.

Before we conclude let’s again recall the Four Laws of Disaster Risk:

  1. Disaster risk grows exponentially with hazard risk
  2. Disaster risk grows exponentially with urban density, even when haz­ard risk remains constant
  3. Disaster risk is inversely proportional to Resilience Capacity
  4. Emergency Capacity required is inversely proportional to Resilience Capacity

Much of what we observe and question can be explained through one or more of these Laws. Since we cannot easily affect natural hazards and have limited ability to control urbanization, the only lever we actually possess to manage disaster risk is Resilience Capacity. Because hazard risk and urban density both exponentially worsen disaster risk, Resilience Capacity has to grow super-exponentially just to maintain con­stant risk levels.

Recall that Resilience Capacity for the built environment was defined as resistance plus redundancy.

  • Resistance: primary ability to resist and withstand a hazard
  • Redundancy: redundant elements in case critical parts of the system fail

Finally, the more deficient we are above, the more we need Emer­ge­ncy Capacity, or as we called it:

  • Contingency: emergency plan in case a significant portion or the entire system fails

Resilience Capacity investment is generally paid up-front at the time of creation (although it also has to be properly maintained), while Emergency Ca­pacity is paid every year.

Frequent use of emergency alarms is clear evidence of falling behind on Resilience Capacity. Setting the resilience bar high enough is critical if hazards and density are expected to continue growing.

With the rapid growth of developing nations and the rebuilding needs of the developed world, humanity faces an unprecedented challenge. By the middle of this century built environment investment is forecast to exceed that cumulatively made in all of human history. This creates both tremendous opportunity and frightening risks.

Opportunity if it is built to high levels of resilience that will serve hu­man­ity reliably for centuries. Risk, if it is not and we are forced to rebuild again and again. The economic, environmental, and social impact of the latter scenario may be truly catastrophic for nations. Humanity could face develop­ment setbacks paralleling those of the Middle Ages.

We may only have ‘one chance’ to do it right. Which is why resilience is the ultimate choice we have in securing a strong and lasting sustainable fu­ture.  In other words, ‘The Ultimate Sustainability’.


In authoring my first book I learned a few things about writing books.  Every book involves choices and can never be everything to everyone. For scientists it may not be scientific enough. For laymen it may contain too much technical jargon. For officials it may be too aggressive. For environ­mentalists it may be too passive. For non-building people it may not be broad enough.  For non-US readers it may appear too focused.

What I tried to do is paint in simple strokes the big picture of how the US got to where it is today: creating a built environment that is literally ‘falling on our heads’. It is a case-in-point for everyone. Similar issues and dynamics may already exist or could evolve elsewhere. Many developing nations often refer to and in some cases copy and apply US building codes and standards.  It is important they realize their limitations.

As noted in the introduction there are many other dimensions of resili­ence that I chose not to address. It is not because these are not important but because I lack intimate knowledge of them. Examples are agriculture, infor­mation/communications and energy resilience. But interestingly al­most all of them in some way depend on the built environment. Food is es­sential but if we lose the ability to store, process and package it, we become constrained in supplying it. Information and communications are also critical but other than satellites and isolated towers, most of its hardware is placed in or on buildings. Similar story with energy.

I approached the subject by applying both a spotlight and a microscope.  By viewing our hazard-vulnerability as a ‘disease’ I aimed not simply to ana­lyze its symptoms but to search for its root causes. To conduct my examina­tion I selected a mature and suffering patient—the US.

Every disease has a virus or trigger. It also has an anti-virus or cure. Vi­ruses aim to preserve and multiply themselves. The symptoms of this disease come and go in lapses. The patient feels wonderful for a period of time and then ‘bang’ – a serious incident happens. Every time it appears to get worse. Emergency responders do their best to bring him back. Because of the interim quiet periods the patient doesn’t fully appreciate that the condition is ap­proaching critical.

‘Doctors’ argue what to do and many are asking for more lab analyses (might they be in the labs business?). The ‘Chief Doctor’ is in another room thinking of his next public appearance. The more influential doctors continue to prescribe the traditional medicines, ignoring that these no longer work (those ‘drug’ companies supported them for years). A few insightful ones un­der­stand the real cure and insist it be administered. The patient may soon begin loosing vital functions. Unknowing friends and family anxiously wait. They may face a similar future. Suddenly the critical condition moni­tors sig­nal an alarm. Everyone stares at each other. Will someone make a deci­sion?

The patient is the US built environment particularly its residential sector. The disease is hazard-vulnerability. The virus turns out to be the system that has evolved in setting building rules and driving behavior. The doctors are our officials and experts. The traditional drugs are the non-resilient designs and practices we are still applying. The cure is a steady and increasing dose of Re­silience Capacity.

Can it be that simple? I’m afraid yes. Sometimes we do many compli­cated things and fail at doing the simplest.

Some may protest that I am anti-homebuilders and anti-wood, but I am not. What I certainly am is anti- anyone, or any business, who in order to compete persists in rigging the system by keeping the standards low. If these indus­tries drop the affordability and green veils, agree to raise the resilience bar and train to jump over it, I will be upfront cheering for them.

Raising the resilience bar is probably the best thing they can do for their industry future. It would force them to innovate and commercialize designs and solutions that are more hazard-resilient and more accountable to consum­ers. Not seeing that future suggests they are either shortsighted or are just out-of-shape from lack of practice.

Regardless the bar is going up. There really is no other choice for soci­ety. The sooner they accept it the better their chances of jumping over it, in­stead of bumping their heads into it.

I may also be criticized for not fully appreciating the many good things the building code system does. I admit being a tough critic. The reason is that millions of people pay the price with their lives and possessions because this faceless system is failing to perform. Most importantly, it is not setting the bar consistently high enough to protect both people and property. Until it ac­tually does that it deserves everyone’s criticism.

If this book can stir debate and introspection that will lead to greater re­silience awareness, transparency and action it will have served its purpose.  Perhaps other authors will emerge with their own insider experiences to write their country’s and industry’s story.

What happens tomorrow depends on us all. Realize we do have a choice. The system should be there to help us but if it fails, it is not our master.  Perhaps it made us lethargic. If disaster harms us tomorrow it is because of the choices we made, or failed to make, yesterday and today.

Nature is honest and has given us fair warning. If our cocoon collapses over our head we have only ourselves to blame. But I have always been an optimist on human survival and thus confident that one day we will ‘wake-up’ and do the right things.  Why not begin TODAY?

              Thank you for acting on what you learned!



  1. From One Disaster to Another: Superpower Vulnerability














  1. Cocoon We Live In: The Built Environment









  1. Concentrating Risk: Tale of Too Many Eggs


  1. Urbanization: The Urge to Concentrate










  1. Not the Oscars: Disaster Vulnerability Rankings





  1. Paradise Lost: Road to Non-Resilience


  1. Urban Fires: Burning Fingers Repeatedly





















8    Risk Stimulus: US Flood Insurance Takes In Water











  1. Solution or Problem: Story of Building Codes
















  1. Choices We Make: What to Save and What Not



  1. Trojan Horse of Disasters: Affordability Abused


  1. Disastrous Tug-of War: The Battle for Resilience


  1. Weak and Cheap: The Business of Non-Resilience











  1. When Disaster Strikes: Knock on Wood



























  1. World’s Wood Powerhouse: Canada Cries Timber









  1. False Sense of Security: Culture for Disaster


  1. Off the Rocky Road: Making Cars Resilient









  1. Pioneer Who Saw the Light: Story of John Freeman






  1. Predicting the Unpredictable: Limits of Sharing Our Problems



  1. Investing or Gambling: Brief History of Insurance














  1. Fifty Shades of Green




















  1. Built Environment Makeover: From Repetition to Resilience













  1. Gone With the Winds: Disaster Reruns











  1. Ground We Shake On: Pro-Action Over Inaction












  1. Liquid Rock: Harnessing Nature’s Strength














  1. Acts of God or Man: Enforcing Accountability






  1. Collateral Damage: When Government and Resilience Collide















  1. Private Action: Balancing Principles With Profit






















  1. Disaster Cures: Lessons For Resilient Living



AD: Anno Domini, after Christ

AIA: American Institute of Architects

ANSI: American National Standards Institute

ARISE: Alliance for Disaster Resilient Societies

ASCE: American Society of Civil Engineers

AWC: America Wood Council

BC: Before Christ

BOCA: Building Officials and Code Administration

BREEAM: Building Research Establishment Environmental Assessment Method

BRIC: Brazil, Russia, India and China

CAP: Climate Action Plan

CBR: Chemical, biological, and radiological agents

CEO: Chief Executive Officer

CO2: Carbon dioxide

DHS: Department of Homeland Security

EDP: Environmental Product Declaration

FEMA: Federal Emergency Management Agency

FHA: Federal Housing Administration

FLAME: 2009 Federal Land Assistance, Management, and Enhancement Act

FLASH: Federal Alliance for Safe Homes

GATT: General Agreements on Tariffs and Trade

GBI: Green Building Initiative

GDP: Gross Domestic Product

GM: General Motors Company

HUD: Housing and Urban Development Department

IBC: International Building Code

ICBO: International Conference of Building Officials

ICC: International Code Council

IIBHS: Insurance Institute for Business and Home Safety

IRC: International Residential Code

Km: Kilometer

Km2: square kilometers

LEED: Leadership in Energy and Environmental Design

MIT: Massachusetts Institute of Technology

Mph: Miles per hour

MPS: Minimum Property Standards

NAFTA: North American Free Trade Agreement

NAHB: National Association of Home Builders

NAIC: National Association of Insurance Commissioners

NIST: National Institute for Standards and testing

NFIP: National Flood Insurance Program

NFPA: National fire Protection Association

PCA: Portland Cement Association

PSAG: UNISDR Private Sector Advisory Group

PSP: UNISDR Private Sector Partnership

SBCCI: Southern Building Code Congress International

SFDRR: Sendai Framework for Disaster Risk Reduction: 2015-30

SPUR: San Francisco Planning and Urban Research Association

STD: DHS Science and Technology Directorate

sf: Square Foot

UN: United Nations

UNISDR: United Nations International Strategy for Disaster Reduction

US: United States of America

USDA:  United States Department of Agriculture

USFS:  United States Forest Service

USGBC: US Green Building Council

USGS:  United States Geological Service

Resilience Action Fund

Resilience Action Fund (RAF) is a US 501(c)3 non-profit organization founded by the author in 2015. Its mission is to advance awareness, transparency and education for greater resilience in the built environ­ment. Recently it helped found a UK-based sister non-profit, Resilience Action Fund (International) to advance the same mission internationally.

RAF is the publisher and distributor of this book. It aims to publish future books by this and other authors on subjects relevant to its mission. All book sale proceeds go to RAF. For more information on RAF, its program, projects and activities please go to www.buildingresilient.com.

Your support is greatly appreciated.


Aris Papadopoulos is a Distinguished Expert in Resilience at Florida International University’s Extreme Events Institute, where he assists the university with various resilience research and educational projects. He earned Bachelors and Masters Degrees from MIT in Chemical Engineering (1978) and an MBA from Harvard University (1985).

He has 35 years experience in the construction and energy industries. In 2014 he retired from Titan America, an eastern US building materials com­pany, after serving 20 years as CEO. He currently chairs the board of ST Equipment & Technology, a worldwide provider of industrial waste reclama­tion and water conservation solutions.

Aris is founding chair of the Concrete Joint Sustainability Initiative and past chair of the Portland Cement Association. In 2015 he received the Amer­ican Concrete Institute’s Sustainability Award. He served the boards of MIT’s Concrete Sustainability Hub, US Green Concrete Council, and CTL Group.

In 2015 he founded the Resilience Action Fund, a non-profit advancing greater awareness, transparency and education for resilience in the built environment, which he chairs. He also chairs Resilience Action Fund (International), a sister non-profit based in the UK. This is his first book.

Aris serves on the board of the UN Alliance for Disaster Resilient Societies (ARISE). He was founding chair of the UN-ISDR Private Sector Advisory Group, advocating for resilience before three UN DRR Conferences and Rio+20, and played an active role in developing the ‘Sendai Framework for Disaster Risk Reduction: 2015-30’.

Aris is a World Trade Center survivor, having scheduled to meet the Port Authority of NY/NJ at their 65th floor North Tower offices at 9am on Sep­tember 11. Originally from Chicago, he grew up in Europe and now re­sides in Miami, Florida. He is a steward at St Sophia’s Greek Orthodox Church.

©2019 Resilience Action Fund

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