1 STAFF REPORT
COMMUNITY
DEVELOPMENT
DATE: December 10, 2024
TO: Justin Hess, City Manager
FROM: Patrick Prescott, Community Development Director VIA: Mario Osuna, Assistant Community Development Director BY: Albert Lopez, Principal Plan Check Engineer
Beverly Ibarra, Building Administration Manager
SUBJECT: Adoption of an Ordinance to Amend Title 9, Chapter 1, of the Burbank Municipal Code to Establish Mandatory Earthquake Hazard Reduction Standards in Existing Wood Frame Residential Buildings with Soft, Weak, or Open-Front Wall Lines by Establishing Mandatory Retrofit Regulations
RECOMMENDATION
Adopt AN ORDINANCE OF THE COUNCIL OF THE CITY OF BURBANK AMENDING TITLE 9 (BUILDING REGULATIONS) CHAPTER 1, ARTICLE 16, DIVISION 4 OF THE
BURBANK MUNICIPAL CODE ESTABLISHING MANDATORY EARTHQUAKE
HAZARD REDUCTION STANDARDS IN EXISTING WOOD FRAME RESIDENTIAL BUILDINGS WITH SOFT, WEAK, OR OPEN FRONT WALLS (Attachment 1).
SUMMARY
On September 10, 2024, the City Council (Council) introduced an Ordinance amending Title 9 (building regulations) C hapter 1, A rticle 16, D ivision 4 of the BMC establishing mandatory earthquake hazard reduction standards in existing wood frame residential buildings with soft, weak, or open front walls.
During the introduction, Council considered staff’s recommendation on the proposed update to BMC T itle 9, Chapter 1, mandat ing the seismic retrofitting of multi -family residential buildings identified as Soft-Story structures. These buildings are particularly vulnerable to catastrophic damage or collapse during a major earthquake. Following the discussion, Council moved to introduce the Ordinance with the request that staff research
2 potential financial assistance opportunities for property owners and timelines for compliance and consider amending the O rdinance based the findings. Based on Council’s suggestions, the following amendments have been incorporated into the Ordinance:
1. E stablish January 10, 2025, as the official notice date.
2. A llow a passthrough cost of $51 per unit per month, capped at 50% of retrofit costs for a maximum of 120 months.
3. Grant flexibility in extension requests, including the removal of the one- time extension limitation, while maintaining public safety through required notifications.
4. Implementation of a policy of establishing financial incentives for early compliance, including a 100% refund of permit fees for compliance within 18 months and a 50% refund for compliance within 36 months , creating a natural tiering effect in applications that will help manage workloads efficiently.
Vote at Introduction:
AYES: Anthony, Mullins, Takahashi, Perez, and Schultz.
NOES None
ABSENT: None
DISCUSSION
During the O rdinance introduction, Council requested further information for consideration to amend the following aspects of the Ordinance:
• Incentives for early compliance;
• Potential financial assistance options;
• P roposed passthrough fee;
• F inancial hardship extension requests;
• T iered process for building inventory based on the size of buildings; and • Define a specific compliance date in the Ordinance.
INCENTIVES
The primary goal of offering financial incentives is to encourage an accelerated compliance for Soft-Story buildings by providing building owners with relief from building permit fees. These incentives are designed to motivate property owners to take proactive steps toward retrofitting, which can accelerate the overall compliance process. Given the unpredictable nature of earthquakes, p rompt compliance is a critical goal for the City to protect both residents and infrastructure. By incentivizing early action, the City can more swiftly enhance community resilience.
3 Introducing a permit cost refund incentive program is anticipated to naturally create a tiered response in the submission of Soft -Story retrofit permit applications. Motivated building owners are likely to expedite their compliance to take advantage of the financial benefits by submitting applications early in the compliance period. Less motivated owners may take the full compliance period to submit their applications, resulting in a more staggered submission timeline. This tiered approach will help balance the workload over time, allowing for the effective management of the expected influx of applications and better forecasting of resource needs.
The City of Beverly Hills serves as a successful model for implementing similar incentive provisions. Beverly Hills enacted a mandatory Soft -Story retrofit program with an ambitious three-year compliance timeline. To encourage early compliance, Beverly Hills offered a 100% refund of permit fees for property owners who completed retrofits within 18 months, and a 50% refund for those who complied within 24 months from the date the initial notice was served. Of the 220 permits issued since January 2020, approximately 46% of applicants took advantage of this refund incentive, illustrating the program’s effectiveness in motivating building owners to comply quickly.
Currently, the City of Burbank charges a total of $904 for seismic retrofit project building permit fees. Based on the success of Beverly Hills ’ program, the following incentive structure for is proposed for Burbank:
• 100% refund of permit fees for f ull compliance by July 10, 202 6, or within 18 months of the initial notice.
• 50% refund of permit fees for full compliance by January 10, 2028, or within 36 months of the initial notice.
Based on current projections, if approximately 50% of building owners take advantage of these incentives, the estimated total refund impact to the City would be approximately $229,200 over three years. However, in a n unlikely scenario where all owners comply early, the maximum refund exposure for the City could reach $610,200 over an 18-month period.
FINANCIAL ASSISTANCE OPTIONS
To support building owners affected by the mandatory retrofit Ordinance, s taff has conducted a thorough review of available financial assistance options, with a primary focus on grant opportunities. The following outlines prospective grant opportunities and partnerships that may help fund seismic retrofitting projects.
Grant Opportunities:
1. Hazard Mitigation Grant Program (HMGP):
4 The HMGP, funded by the Federal Emergency Management Agency ( FEMA) and administered by the California Governor’s Office of Emergency Services (Cal OES), provides federally competitive funding aimed at reducing disaster risk. Currently, HMGP is not accepting new Notices of Intent (NOIs) as it requires a recent natural disaster to trigger new funding cycles. Staff will continue to monitor future funding opportunities as they become available.
2. Building Resilient Infrastructure and Communities (BRIC) Program:
Also administered by Cal OES, the BRIC program offers competitive annual funding opportunities on a national level. Similar to HMGP, cities must apply as sub- applicants, with the state acting as the main applicant. Staff has submitted an initial NOI for the BRIC program and is working with Cal OES to refine the application .
However, past awards indicate that funding for seismic projects face intense competition. In the previous year, no seismic grants were awarded , and funds were primarily allocated toward s infrastructure projects , such as wastewater treatment plants and flood mitigation efforts.
3. California Residential Mitigation Program (CRMP) administered by the California Earthquake Authority (CEA):
After a multi-year application process, the CEA was awarded BRIC funds to support statewide seismic strengthening programs through the CRMP. This program assists homeowners strengthen their properties by providing seismic retrofit grants directly to homeowners, contractors, and design professionals . The grant reimburses for two types of retrofits: the Earthquake Brace and Bolt (EBB) and owner -occupied Earthquake Soft Story (ESS). Notably, staff is in discussions with CRMP regarding the potential expansion of their ESS program to also include multi-family properties that fall within the scope of Burbank’s Soft -Story Ordinance. While CRMP expressed interest in this expansion, a definitive timeline for implementation has yet to be established.
Alternative Funding Resources:
Alternative funding avenues to complement available grant opportunities include:
• Gain Credit Union: Staff has initiated discussions with Gain Credit Union, a local, private lending institution, regarding a potential partnership with the City. This partnership would include an educational program aimed at helping building owners understand their financing options.
• California Statewide Communities Development Authority (CSCDA) Open PACE Program: The CSCDA administers the Open PACE Program to help finance property improvements such as renewable energy systems, energy and 5 water efficiency upgrades, seismic retrofits, and electric vehicle charging infrastructure. Using cities and counties’ ability to levy contractual assessments on properties to fund public benefit projects, t he program uses land-secured financing to provide property owners with access to competitive financing to support California’s climate, water conservation, and seismic safety goals, while reducing financial barriers to these improvements.
In order for Burbank property owners to be eligible to participate in the program, the City would need to adopt a resolution declaring its intention to opt in. Then, participating property owners would voluntarily enter into contracts with CSCDA, agreeing to a lien on their property to repay financing over 5 to 39 years, with payments collected through the property tax bill. The repayments also include bond issuance, reserve fund contributions, and administrative costs incurred by the program . In the event of non- payment, CSCDA may initiate foreclosure proceedings. Participation is voluntary and non- participating properties are unaffected.
• City-Funded Grant Program: In collaboration with the Finance Department, staff assessed the feasibility of establishing a city -funded grant program. Preliminary analysis suggests that providing direct financial aid could significantly strain the City’s general fund. Estimated costs could range from $6.75 million to $21 million depending on the grant amounts offered to building owners, which were conservatively estimated at $10,000 to $30,000 per applicant. Furthermore, administering such a program would require substantial staffing and contracting resources to ensure compliance and proper fund management , further adding to the financial burden to the City.
While there are promising grant opportunities and potential partnerships to enhance seismic resilience, staff recognizes the challenges associated with funding and administration. The most direct and efficient route to support Burbank building owners is through continued engagement with CRMP , which could lead to potential grant aid without heavily impacting City resources . Staff will continue to monitor and explore alternative funding options and educate the community accordingly . However, given the unpredictable nature of such opportunities , it is critical to proactively advance the mandatory seismic retrofit program and avoid postponing implementation in order to ensure the program’s success.
PASSTHROUGH COSTS
Initial review of the passthrough cost structure associated with seismic retrofit projects resulted in an initial proposal to implement a temporary passthrough cost of $38 per unit per month, to be applied for up to 120 months following the completion of retrofit work .
This cost would cover up to 50% of the incurred retrofit costs. 6 The proposed passthrough cost framework is based on the City of Los Angeles' 2008 Soft-Story Ordinance, which similarly allows for the recovery of passthrough costs. In that Ordinance, the $38 figure was derived by calculating 50% of the maximum allowable rent adjustment for rehabilitation work, as established by the Los Angeles Housing Department (LAHD), which was set at $75 per month. This $75 adjustment for rehabilitation was originally based on 10% of the average monthly rent in Los Angeles, which at the time was approximately $750. Applying the same formula to the current rental landscape in Burbank, where the average rent in 2024 is estimated to be $2,500 per month, the equivalent passthrough cost for seismic retrofit work would be $125 per unit per month.
Staff conducted an inflation- adjusted analysis, which indicated that the original $38 in 2008, when adjusted for inflation , would be approximately $51 today, providing a more equitable approach to updating the temporary passthrough cost.
In analyzing the impact of passthrough costs, it is important to ensure they reflect current economic conditions and are equitable for all stakeholders involved in the seismic retrofit process. Staff recommends that if passthrough costs are allowed, they should not exceed the inflation- adjusted $51 per month, ensuring that the financial impact on renters is appropriately accounted for.
IMPORTANCE TIERS
Staff explored the potential impact of implementing importance tiers for managing the inventory of Soft -Story buildings and enhancing public safety. Successful implementations of importance tiers in other cities were analyzed, particularly in Los Angeles. Los Angeles has effectively used this approach to prioritize the management of its extensive inventory of Soft-Story buildings, focusing on those at a higher risk of seismic failure. By categorizing buildings based on their risk characteristics such as height and number of residential units, Los Angeles was able to implement strategies that prioritized buildings most vulnerable to earthquakes.
Taller buildings inherently carry a greater risk because seismic load distribution directly correlates to a building’s height, making their prioritization crucial in safeguarding residents. Additionally, prioritizing buildings with more dwelling units ensures that efforts are focused on protecting the greatest number of residents in the shortest timeframe. This dual focus on structural risk and resident density allows for a more efficient allocation of resources, targeting the highest-risk buildings while maximizing the protective impact of the program.
In contrast to Los Angeles' inventory of over 12,000 Soft -Story buildings, Burbank’s inventory has approximately 675 buildings. The City is committed to ensuring that all affected residents are equally protected and intends to plac e all Soft-Story buildings on 7 the same prioritized timeline for compliance. To achieve this, staff intends to implement a resourceful approach that incorporates permit cost refund incentives as the driving mechanism to achieve a natural tiering effect in the submission of Soft-Story retrofit permit applications. This incentive strategy is designed to expedite compliance while ensuring that no building is left unprioritized. It will also allow staff to better forecast workloads and allocate resources more efficiently.
HARDSHIP EXTENSIONS
Staff has been tasked with exploring options to provide hardship extensions to building owners who may face financial difficulties in meeting the deadlines set by the Soft -Story retrofit program. In response, revisions have been proposed to offer greater flexibility to property owners while maintaining transparency and prioritizing public safety.
As introduced, the Ordinance limits extensions to a single occurrence. Staff recommends eliminating this limitation and granting the Building Official discretion to approve conditional extensions. Specifically, the owner of a building would apply for an extension only after the completion of the screening report and the construction plans have been approved. The Building Official may grant one or more extensions, each not exceeding 180 days, to allow the owner additional time to comply with the requirements. However, the owner must have demonstrated a good faith effort to meet requirements of the Ordinance and provide a proposed schedule for the remaining scope of work.
This change would better accommodate property owners facing ongoing financial challenges, allowing them to meet program requirements without compromising public safety. However, it remains crucial that the public, especially current and prospective residents, buyers, and mortgage professionals, are aware of a building's unsafe condition.
To ensure continued transparency and protect public safety, it’s recommended that buildings granted hardship extensions still be required to meet public safety communication requirements. Specifically, these buildings would be obligated to post visible signage on the property, informing the public of the building's Soft-Story status and the associated risks.
Additionally, to maintain transparency with interested parties such as potential buyers, lenders, and real estate professionals, staff proposes that building owners granted hardship extensions be required to record the notice of compliance with the County Recorder’s office. This ensures that a building’s status remains visible and accessible to entities with a vested interest in its safety and condition, reinforcing the program's commitment to both supporting property owners and protecting public safety.
Through these proposed revisions, staff seeks to balance the need for flexibility with the ongoing obligation to safeguard residents and ensure clear communication of a building's seismic safety status.
8 ENVIRONMENTAL REVIEW
The Ordinance is determined to be categorically exempt under § 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines in that it can be seen with certainty that there is no possibility the proposed project would have a significant effect on the environment.
FISCAL IMPACT
Implementing the Soft-Story Seismic Retrofit program will require a full-time Senior Plan Check E ngineer, who will review screening forms, analyze the merits of engineers’ appeals, and review engineered plans and calculations for compliance with the proposed standards. Additionally, costs cover a full -time Building Inspector II who will perform on- site construction inspections at critical milestones of the construction process. At the City Council meeting on September 10, 2024, Council approved a request to amend the Fiscal Year (FY) 2024- 25 Adopted Budget by appropriating $112,000 from revenue account 001.CD000.51030.1000 (General Fund, Community Development, Plan Check Fees) to expenditure account number 001.CD42A.62085.0000 (General Fund, Building Division, Other Professional Services) for consultant costs to support the current Senior Plan Check Engineer and Building Inspector II who will be working on the Soft -Story Seismic Retrofit program. To recover these costs, a Soft -Story Seismic Retrofit plan chec k and permit fees have been established with the FY 2024-25 Budget Adoption in anticipation of the program.
Additionally, should Council choose to implement the building permit fee refund incentive, the City could potentially forgo $452 to $904 in revenue per project. Based on the current building permit fees adopted for FY 2024- 2025, and assuming there are 675 properties that will complete this work, the City could potentially lose a maximum amount of $610,200 in revenue over 18-months. This estimate assumes that all qualifying properties comply with the retrofit requirement within 18-months of receiving the notice and that the City refunds 100% of their building permit fees within that timeframe.
CONCLUSION
The proposed Ordinance is a critical step in safeguarding the City's residents and infrastructure from the seismic vulnerabilities posed by Soft-Story buildings. Staff’s extensive research, which includes best practices from cities with similar programs, financial incentives for compliance, potential funding sources, and effective communication strategies, highlights the importance of incentivizing timely compliance.
Staff’s recommendations align with successful models such as Beverly Hills, which demonstrated the effectiveness of financial incentives in achieving rapid compliance.
Staff recommends that Council adopt the attached Ordinance (Attachment 1) with the Council directed amendments listed below (Attachment 2), and approve the requested budget amendment:
9 1. E stablish January 10, 2025, as the official notice date.
2. A llow a passthrough cost of $51 per unit per month, capped at 50% of retrofit costs for a maximum of 120 months.
3. Grant flexibility in extension requests, including the removal of the one-time extension limitation, while maintaining public safety through required notifications.
4. Implement a program policy of establishing financial incentives for early compliance, including a 100% refund of permit fees for compliance within 18 months and a 50% refund for compliance within 36 months, creating a natural tiering effect that will help manage the influx of applications efficiently.
These amendments not only support property owners , but also reflect a proactive approach to enhancing community safety in the face of seismic risks . By implementing this Ordinance, the City is taking important steps to protect residents and housing, ensuring a safer and more resilient community for years to come.
ATTACHMENTS
Attachment 1 – Ordinance
Attachment 2 – Ordinance with Proposed Redline Changes
Attachment 3 – September 10, 2024 Staff Report for Introduction of Ordinance