NCPA - National Center for Policy Analysis

Seismic Costs are Wasted in Low-Risk Areas

January 16, 2004

Building codes touted by Federal Emergency Management Agency (FEMA) for earthquake zones may cost too much and provide little benefit in certain areas of the United States, according to experts.

Undoubtedly, building codes in California have saved lives during earthquakes when compared to the devastation wrought in countries such as India and Iran. In fact, Iran's recent earthquake killed 30,000 people, while the 1994 Northridge earthquake in Los Angeles killed only 61 people.

However, FEMA officials pushing for construction standards equivalent to those in California, even in areas where the potential risk from earthquakes is extremely low. In the case of Memphis, Tenn., with its low probability of experiencing an earthquake, retrofitting structures such as hospitals, bridges and highways -- as recommended by FEMA -- would cost millions, taking money away from more valuable uses for the community:

  • The Memphis Veteran's Hospital would cost a staggering $100 million to upgrade to FEMA standards, money that could be used for a new building.
  • Over a 50-year life span, a building in Memphis loses about one percent of its value to earthquakes, yet the cost of new building codes is estimated at 5 to 10 percent of the building's value.

While it makes sense for certain states to adopt building codes based on their potential for natural disasters (Florida's hurricane-resistant building codes, for example), experts believe that an objective study comparing costs and benefits is needed before money is wasted a one-size-fits-all approach to a negligible risk.

Source: Seth Stein and Joseph Tomasello, "When Safety Costs Too Much," New York Times, January 10, 2004; based on Seth Stein, Joseph Tomasello and Andrew Newman, "Should Memphis Build for California's Earthquakes?" Northwestern University Department of Geological Sciences, Eos, Vol. 84, No. 19, 13 May 2003.


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