Friday, May 15, 2015
New York Times Op Ed
I had an Op-Ed in the May 14, 2015 New York Times. It summarizes the work I did in Canada on a benefit/cost analysis of the Moore Enhanced Building codes. The academic paper came out last month in Weather, Climate and Society and is co-authored with Greg Kopp at the University of Western Ontario and Paul Kovacs, Executive Director for the Institute for Catastrophic Loss Reduction. The Op-Ed can be found here.
Friday, April 3, 2015
Straw, Sticks or Bricks: An Empirical Test of the the Three Little Pigs
In May 2013 two violent tornadoes roared
through central Oklahoma. The first, struck
Moore on May 20, the third time in 14 years the town experienced a violent
tornado. An estimated $3 billion[1] in
damages resulted from that storm alone as well as causing 24 fatalities and
hundreds of injuries. The most tragic
result was the death of 7 children at Plaza Towers Elementary School. Tragedy can bring change as residents
struggle with how to respond to such an event.
For the city of Moore, it was time to consider revising their building
codes raising the wind load standard from 90 to 135 mph. This change was designed to build homes that
would remain essentially intact for all but the most extreme tornadoes thus
lowering the cost to rebuild and perhaps providing a safer home for
residents. It would be difficult to
estimate the effect these code changes may have on casualties but a
benefit/cost analysis can determine if the code changes will provide financial
benefits to the community. This became the focus of my appointment as a Fulbright Scholar in Canada last year. I collaborated with Greg Kopp, a Wind Engineer at the University of Western Ontario and Paul Kovacs, the Executive Director of the Institute for Catastrophic Loss Reduction in Toronto to undertake a benefit/cost analysis of the recently adopted new building codes for Moore, OK. The paper is published by Weather, Climate and Society and can be found here.
To conduct the benefit/cost analysis,
three pieces of information must be estimated.
First, how much does the new code add to the cost of construction? Second, how much damage from future storms
can be mitigated by the new code and finally, how much potential damage can be expected
across the life of the structure? The
first question was answered by the Moore Association of Home Builders and the
engineering consultants hired by Moore.
Their estimate is that implementation of the new codes will cost $1 per
square foot.[2]
A more challenging question is to
provide an estimate of the reduction in damages that can be expected from the
new code. The new code required roof
rafters to be closer together, hurricane straps for the roof/wall connections,
anchor bolts to tie the exterior walls to the foundation, better exterior
sheathing and wind rated garage doors.
While the code was designed for wind fields through EF-2, fully 70% of
all tornado[3]
related damage comes from tornadoes rated EF-3 and above. But the rating given to a tornado refers to
damage consistent with the highest wind detected within the path and does not
reflect the wind field for the entire life or area of the tornado. So a home subjected to an EF-5 tornado may
benefit from the new code since almost 90%[4] of
the wind field in an EF-5 tornado is EF-2 and less, on average. Once damage is examined by wind field, rather
than tornado rating, 46% of the overall damage comes from wind fields that are
EF-2 and less. Our estimate is that 65%
of the EF-0 through EF-2 damage can be mitigated by the new code reducing
overall tornado damage by 30%.
The final variable needed is an estimate
of future tornado damage. Since the area
of one city is small, it is better to make this estimate for an entire
state. Oklahoma has experienced almost
$32 billion in tornado damage from 1989-2012.[5] The Oklahoma Department of Insurance reports
that 65% of that damage is residential so an annual average of $832 million is
our estimate of annualized residential damage in current dollars. Extrapolating that estimate across the 50
year life of the structure, adjusting for inflation, then discounting the
estimate back to current dollars provides an estimate of almost $36 billion in
expected residential losses from tornadoes for Oklahoma.[6] If all homes were built to the new standard,
a reduction in damage of $11 billion can be expected.
For the new code to be justified, the increased
cost of construction must be less than $11 billion. To get an estimate of the overall cost of the
new code, we need to know the average size of homes in Oklahoma and the current
number of homes. Census[7]
and Zillow[8] provide
data indicating that the average sized home in Oklahoma is 2,000 square feet
and there are currently 1.67 million homes.
This means that if every home in the state had been built to the new
code, the state would have increased construction cost by $3.3 billion. But this increased cost is lower than the
estimate of reduced damages by a factor of more than 3 to 1. So the decision to change the building code
in Moore appears to be a good decision and one that should be considered for
adoption by the entire state of Oklahoma.
[2] Hampton, Joy (2014), “Moore city council considers
storm-resistant building code upgrades, Norman Transcript, March 17, 2014. Available online at: http://www.normantranscript.com/headlines/x1387868847/Moore-City-council-considers-storm-resistant-building-code-upgrades?zc_p=0
[3] Estimate based on damage estimates from the Storm
Prediction Tornado archive which can be found at: www.spc.noaa.gov/wcm
[4] Ramsdell, J. V., and Rishel, J. P., (2007), Tornado
climatology of the contiguous United States, Tech. Rep. NUREG/CR-4461, Nuclear Regulatory Commission,
Washington, D. C.
[5] Estimate comes from state level data provided by the
Oklahoma Department of Insurance and national data provided by the Insurance
Information Institute.
[6] Estimate uses a 2% inflation rate and a discount rate
of 2.5% based on the yield of the 10 year U.S. Treasury Notes.
[7] Census (2012), Selected Housing Characteristics, American
Community Survey, 2012 5 year estimates,
American Fact Finder, available online at: http://factfinder2.census.gov/faces/nav/jsf/pages/searchresults.xhtml?refresh=t
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