The National Institute of Building Sciences (NIBS) issued Natural Hazard Mitigation Saves: 2017 Interim Report, more than a decade after releasing its original report on the same topic and only days after the National Oceanic and Atmospheric Administration (NOAA) declared 2017 the costliest year on record for weather and climate disasters. Sixteen events in 2017 had losses exceeding $1 billion, with total costs of approximately $306 billion, eclipsing the record losses in 2005 by $100 billion
As NOAA exemplified, natural hazards present significant risks to many communities across the United States. Fortunately, there are measures governments, building owners, developers, tenants, and others can take to reduce the impacts of such events. The 2017 Interim Report highlights the benefits of two such mitigation strategies.
During the ongoing study, the NIBS’s project team looked at the results of 23 years of federally funded mitigation grants provided by the Federal Emergency Management Agency (FEMA), U.S. Economic Development Administration (EDA), and U.S. Department of Housing and Urban Development (HUD) and found mitigation funding can save the nation $6 in future disaster costs for every $1 spent on hazard mitigation.
In addition, the project team looked at scenarios that focus on designing new buildings to exceed provisions of the 2015 International Codes (I-Codes), the model building codes developed by the International Code Council (ICC). The 2017 Interim Report demonstrates that investing in hazard mitigation measures to exceed select code requirements can save the nation $4 for every $1 spent.
The project team estimated that just implementing these two sets of mitigation strategies would prevent 600 deaths, 1 million nonfatal injuries, and 4,000 cases of post-traumatic stress disorder in the long term. In addition, designing new buildings to exceed the 2015 International Building Code (IBC) and International Residential Code would result in 87,000 new, long-term jobs, and an approximate 1 percent increase in utilization of domestically produced construction material.
The public-sector mitigation strategies the project team studied include the following:
- For flood resistance, acquire or demolish flood-prone buildings, especially single-family homes, manufactured homes, and two- to four-family dwellings.
- For wind resistance, add hurricane shutters, tornado safe rooms, and other common measures.
- For earthquake resistance, strengthen various structural and nonstructural components.
- For fire resistance, replace roofs, manage vegetation to reduce fuels, and replace wooden water tanks.
The strategies to exceed minimum requirements of the 2015 I-Codes include the following:
- For flood resistance (to address riverine flooding and hurricane surge), build new homes higher than required by the 2015 IBC.
- For resistance to hurricane winds, build new homes to comply with the Insurance Institute for Business & Home Safety (IBHS) FORTIFIED Home Hurricane standards.
- For resistance to earthquakes, build new buildings stronger and stiffer than required by the 2015 IBC.
- For fire resistance in the wildland-urban interface, build new buildings to comply with the 2015 International Wildland-Urban Interface Code (IWUIC).
The original report, Natural Hazard Mitigation Saves: An Independent Study to Assess the Future Savings from Mitigation Activities, which was funded by FEMA, determined FEMA mitigation grants to have a benefit-cost ratio of 4:1. One of its key findings — “For every $1 spent on mitigation, there is a $4 return of avoided losses in the future” — is often cited by Congress and the media.
The 2017 Interim Report also is an independent work, funded with the support of public and private organizations interested in expanding the understanding of the benefits of hazard mitigation. In addition to FEMA, sponsors include HUD, EDA, ICC, IBHS, the National Fire Protection Association (NFPA), and the American Institute of Architects (AIA).
Despite the specific guidance that the 2005 study benefit-cost ratio represented only a single, very narrow set of mitigation strategies (precisely those funded through FEMA), the original 4:1 ratio has been used to justify all types of mitigation strategies. The 2017 Interim Report provides an updated examination of the benefits of federal agency grant programs (including the addition of EDA and HUD), resulting in a $6 benefit for every $1 invested. Though not a direct replacement, when used to describe federal grant programs, the 6:1 benefit-cost ratio can be used in place of the original 4:1.
To vet the methodology used and ensure the study’s accuracy, NIBS received input from experts in resilience across all hazard types, including academia, non-profits, government agencies, and the private sector. Experts were engaged to conduct the analyses and additional experts were invited to peer-review the results. More than 100 subject matter experts participated in development and review of the study methodologies and findings.
Funding mitigation efforts through incentives
While mitigation represents an excellent investment, not everyone is willing or able to bear construction costs for more resilient buildings, even if the long-term benefits exceed the up-front costs. In a 2015 white paper and 2016 addendum, the National Institute of Building Sciences’ Multihazard Mitigation Council and Council on Finance, Insurance and Real Estate proposed a holistic approach to incentives that can drive financing mitigation investments, aligning the interests of multiple stakeholder groups so that they all benefit from natural hazard mitigation. The benefit-cost ratios identified in the 2017 Interim Report can facilitate development of specific strategies that align incentives from finance, insurance, government, and other stakeholders.
View the white paper, Developing Pre-Disaster Resilience Based on Public and Private Incentivization at http://c.ymcdn.com/sites/www.nibs.org/resource/resmgr/MMC/MMC_ResilienceIncentivesWP.pdf.
Information provided by the National Institute of Building Sciences (www.nibs.org).