Today, the National Institute of Building Sciences 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.
As NOAA exemplified (16 events in 2017 had losses exceeding $1 billion, with total costs of approximately $306 billion, eclipsing the record losses in 2005 by $100 billion), 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 Institute’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 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 (PTSD) in the long term. In addition, designing new buildings to exceed the 2015 International Building Code (IBC) and International Residential Code (IRC) would result in 87,000 new, long-term jobs, and an approximate 1% increase in utilization of domestically produced construction material.
The public-sector mitigation strategies the project team studied include:
The strategies to exceed minimum requirements of the 2015 I-Codes include:
The original report, Natural Hazard Mitigation Saves: An Independent Study to Assess the Future Savings from Mitigation Activities, which was funded by the Federal Emergency Management Agency (FEMA), determined FEMA mitigation grants to have a benefit-cost ratio (BCR) 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 BCR 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 BCR can be used in place of the original 4:1.
To vet the methodology used and ensure the study’s accuracy, the Institute received input from renowned 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. Over 100 subject matter experts participated in the development and review of the study methodologies and findings.
While mitigation represents an excellent investment, not everyone is willing or able to bear those 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 Institute’s Multihazard Mitigation Council (MMC) and Council on Finance, Insurance and Real Estate (CFIRE) 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 BCRs identified in the2017 Interim Report can facilitate the 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.