1 Proposed Soft Story Seismic Retrofit Ordinance
and Implementation Program
Community and Economic Development Committee
March 25, 2024
Item (d)5
Rosalynn Hughey, Deputy City Manager/Acting Housing Director Lisa Joiner, Deputy Director, Building Division, Department of Planning, Building, and Code Enforcement Emily Hislop, Division Manager, Rent Stabilization & Eviction Prevention, Housing Department SOFT STORY SEISMIC BACKGROUND: Why this work is underway?
RETROFIT PROGRAM
City Council directed staff to study and address soft story buildings 2014 — City Council directed staff to explore ways to incentivize soft story building retrofits City Council ranked soft story retrofit program as a policy priority 2017 — City Council ranked development of a soft story retrofit program as City’s overall 8th policy priority City applied for and won $6.2 million hazard mitigation grant 2018 — City submitted Hazard Mitigation Grant Program application to California Governor's Office of Emergency Services
2019 — Grant application forwarded to Federal Emergency Management Agency (FEMA) 2021 — Phase 1 Grant Awarded after completing requested modifications and re-submitting grant application City starts developing Soft Story Retrofit Ordinance & Rebate Program 2022 — City entered into agreement with Consultant to do an Inventory Analysis and assist with development of mandatory ordinance and program implementation
2023 — City begins pre-ordinance outreach with building/property owners and residents; researches similar program in San Francisco, Oakland, and Los Angeles; and explores funding mechanisms. City applies for additional $25 million FEMA grant.
2 Health &
Safety
of residents
SOFT STORY SEISMIC Guiding Principles
RETROFIT PROGRAM
Equity &
Inclusion
of vulnerable and
disadvantaged
residents and
owners
Proactive &
Prepared
Minimize the need for
mass care and shelter
in the event of an
earthquake
3 What is a "Soft Story" Building?
4 For San José and other California cities, “soft
story” refers to buildings that:
• Are apartments, condominiums, or other
multi-unit buildings (with multiple floors and
living spaces)
• Are older
• Are constructed with a wood frame
• Have lower stories, garages, or crawl
spaces that lack adequate wall support
• Have high risk of damage or collapse
during an earthquake
SOFT STORY SEISMIC
RETROFIT PROGRAM
SOFT STORY SEISMIC Soft Story Failures: Two-story buildings
RETROFIT PROGRAM
5 Benefits of a Soft Story Seismic Retrofit Program
6 SOFT STORY SEISMIC
RETROFIT PROGRAM
• Preserves health and safety during an earthquake
• Reduces the number of displaced individuals that require Mass Care and Shelter. The cost of Mass Care and Shelter is
estimated at $222 per person per day = $666,000 for 100 people per month
• Prevents the loss of homes, particularly affordable units, after an earthquake. Preserves homes and housing stability for residents
• Reduces financial obligations/losses to owners and tenants Pre-Ordinance Outreach and Engagement
7 SOFT STORY SEISMIC
RETROFIT PROGRAM
Since May 2023, over 12 meetings with:
• Residents
• Housing Providers
• California Apartment Association
• Bay Area Housing Network
• Building and Trades Council
• Housing & Community Development Commission
Promotores Pilot Program
• Staff trained 12 Promotores on proposed ordinance
• Promotores conducted outreach in neighborhoods
SOFT STORY SEISMIC
RETROFIT PROGRAM Building Inventory
Option Building Age/Size Buildings/Residents
1 Pre-1978, 5 or more units Up to 1,495 buildings, 13,565 units ~ 40,000 people (Avg. household:
2.92 per unit)
2 Pre-1990, 5 or more units Up to 2,272 buildings, 19,084 units ~ 56,000 people
3 Pre-1978, 3 or more units Up to 2,363 buildings, 16,763 units ~ 49,000 people
4 Pre-1990, 3 or more units Up to 3,577 buildings, 24,606 units ~ 72,000 people
8 SOFT STORY SEISMIC
RETROFIT PROGRAM Recommended Option
Option Building Age/Size Buildings/Residents
4 Pre-1990, 3 or more units Up to 3,577 buildings, 24,606 units, ~ 72,000 people
• Ensures the health and safety of the maximum number of residents: up to 3,577 buildings or up to 24,606 units and approximately 72,000 people
• Captures the majority of condominium buildings built in the 1980s • Higher number of three- to four-unit buildings, 64%, that meet soft story building criteria.
9 Compliance Groups and Schedule
10 SOFT STORY SEISMIC
RETROFIT PROGRAM
Group 1 A Subject Building built before January 1, 1978, and containing five or more Dwelling Units (up to 1,495 buildings)
Group 2 A Subject Building built before January 1, 1990, and containing five or more Dwelling Units (up to 777 additional buildings)
Group 3 A Subject Building built before January 1, 1990, and containing three or more Dwelling Units (up to 1,305 buildings)
Compliance
Group
Screening Permit Issued Construction
Group 1 One year after ordinance
effective date
Three years after ordinance
effective date
Four years after ordinance
effective date
Group 2 One year after ordinance
effective date
Four years after ordinance
effective date
Five years after ordinance
effective date
Group 3 One year after ordinance
effective date
Five years after ordinance
effective date
Six years after ordinance
effective date
Focus first on older buildings; allow more time for more buildings with complex circumstances; provide efficient resource allocation.
Estimated Retrofit Costs & Rebates/Funding Options SOFT STORY SEISMIC
RETROFIT PROGRAM
• Retrofit cost range estimated from $30,000 to $180,000 per building, depending on age, design, and size
Screening cost: $250-$1,000. No screening cost if
owner can self-certify
• For similar buildings on the same parcel, costs would likely be reduced
11 SOFT STORY SEISMIC Proposed Rebate Program Design RETROFIT PROGRAM • FEMA-funded
• Rebates awarded on reimbursement basis
• Funding: $4.5 million now available; $25 million FEMA application submitted
• Proposed priorities
• Lowered ARO pass-throughs allowed if rebate received
• Other funding options: low- or no-interest loan program with financial institutions, including community development financial institutions (CDFIs)
12 SOFT STORY SEISMIC ARO Buildings: Capital Pass-through
RETROFIT PROGRAM
EXAMPLE: $100K Project Cost for 8-unit ARO building
[(Cost of Project ÷ # of units) ÷ 20 years] ÷ 12 months = monthly pass-through amount per unit [($100,000 ÷ 8) ÷ 20] ÷ 12 = $52.08/per unit per month
Unit # Rent on Date
Petition Submitted
3%
Threshold
Allowable Monthly
Pass-through
Collected After
20 years
1 $1,500 $45.00 $45.00 $10,800.00
2 $2,000 $60.00 $52.08 $12,499.20
3 $1,700 $51.00 $51.00 $12,240.00
4 $2,200 $66.00 $52.08 $12,499.20
5 $2,100 $63.00 $52.08 $12,499.20
6 $1,600 $48.00 $48.00 $11,520.00
7 $1,800 $54.00 $52.08 $12,499.20
8 $1,950 $58.50 $52.08 $12,499.20
TOTAL RECOVERED: $97,056
13 SOFT STORY SEISMIC ARO Buildings – Capital Pass-through
RETROFIT PROGRAM
Pass-through amount does not increase when rent is increased Ex: If a 5% rent increase is applied over 2 rent increases:
YEAR 1
Base Rent (w/o Pass-through) $2,000.00
5% Allowable Increase Applied to Base Rent $100.00
Allowable Monthly Pass-through $52.08
New Rent with 5% Increase and Pass-through $2,152.08
YEAR 2
Base Rent (w/o Pass-through) $2,100.00
5% Allowable Increase Applied to Base Rent $105.00
Allowable Monthly Pass-through $52.08
New Rent with 5% Increase and Pass-through $2,257.08
Note: If the tenant moves out during the amortization period, the pass-through ends. New rent may be set at what market will bear. 14 SOFT STORY SEISMIC ARO Buildings – Service Reduction Petitions RETROFIT PROGRAM • Reduction in housing services – Temporary or Permanent • During work - dust, noise, loss of access to amenities (parking, storage, etc.)
• After work (much less likely) - permanent loss of services • Proposed restriction on petitions for temporary reductions in which:
• Reduction in service relates to the seismic retrofit project • Reduction occurs while retrofit project work is being done • Length of time of reduction in services is reasonable • Owner has complied with noticing requirements
15 SOFT STORY SEISMIC Next Steps RETROFIT PROGRAM
• Continue exploring funding for rebate program
• May 2024 – City Council
• May and ongoing: Post-ordinance outreach and
education; initiate program implementation
Notification to Property Owners
Notification to Tenants / Tenant Coordination
Plans
Building Screening, Permitting, and Construction
Process
16 17
Proposed Soft Story Seismic Retrofit Ordinance
and Implementation Program
Community and Economic Development Committee
March 25, 2024
Item (d)5
Rosalynn Hughey, Deputy City Manager/Acting Housing Director Lisa Joiner, Deputy Director, Building Division, Department of Planning, Building, and Code Enforcement Emily Hislop, Division Manager, Rent Stabilization & Eviction Prevention, Housing Department