by Thom Zaremba, shareholder at Roetzel & Andress
In my last several blogs, we’ve drilled down into the resiliency of our existing building stock. We examined the terrible devastation caused by natural disasters, in terms of lost lives and property losses, especially in hurricane and wildfire zones. We’ve also seen how our building codes are regularly updated, but we also learned those updates do not apply to our existing building stock!
The resiliency in materials and design that updated building codes require for new buildings is only required for existing buildings when a building owner chooses to alter or add to them, or if it’s a commercial building, its occupancy is changed, for example, office space is converted to residential living space.
Previous blogs also discussed legislation in Florida that requires some existing buildings to be inspected and deficiencies brought up to the current code. We also looked at the potential cost of requiring post-occupancy inspections for the millions of existing buildings across the country at risk of hurricane or wildfire damage.
In my last blog, I was able to draw several conclusions from our journey through building resiliency.
My first conclusion was that the glass found in a building is a litmus test of its resilience. Single-pane windows tell an owner or prospective purchaser that the building will need significant upgrades to ensure its energy efficiency (resilience) and its ability to resist damage from natural disasters like hurricanes and wildfires.
In hurricane zones, upgrading windows and doors to double-pane, hurricane-resistant assemblies can save a building from the devastating effects of flying objects driven by hurricane-force winds and prolonged torrential rains. In wildfire zones, double-pane tempered glass or fire-protection-rated glass can help save a building from the risk of burning embers flying miles ahead of a wildfire and the damage caused by heat and flames.
My second conclusion was that the decision to incur the costs necessary to update an existing building with materials designed to ensure its resilience won’t likely be mandated for us by local governments. Instead, the decision to spend the money necessary to update buildings to the current code will ultimately be made by individual building owners.
Do these conclusions exhaust the need to look further at the resilience of existing buildings? Not quite. We still need to ask: How urgent is the need to update buildings to the current code? Can’t building owners just keep putting that kind of investment off and buy disaster insurance instead? Perhaps Florida’s experience and some advice from the insurance industry can provide the answers.
Following the collapse of a high-rise condominium in Surfside, Florida enacted laws requiring most condominiums to be inspected. They also require unit owners to pay for necessary repairs and fully fund reserves to cover the costs of future maintenance and repairs.
How have these laws affected Floridians? Moneywise, a financial news and comparison site, reported that one lawmaker is concerned that it could result in the “next wave of homeless people.” Before the enactment of these laws, condominium complexes routinely put off needed upgrades and did not fund future maintenance reserves. Instead, many opted to just purchase disaster insurance.
Now, many unit owners face tens of thousands of dollars in new fees required to make repairs and fund maintenance reserves. Adding these new fees to existing mortgages and living expenses, especially in an age of high inflation, can result in dangerous financial burdens, particularly for retired seniors living on fixed incomes.
Is Florida’s experience in putting off needed building upgrades and relying on disaster insurance unique, or is it likely to become a widespread problem? The warning from Allianz SE, one of the world’s largest insurers, is frightening and should serve as a wake-up call. A story in The Guardian reported that an Allianz board member is warning that climate change is driving extreme weather events capable of causing severe damages and insurance losses so large that insurers may no longer be able to offer coverage for many climate-related risks. He also warned that many other financial services, such as mortgage lending, may become unavailable without insurance.
Based on Florida’s experience and insurance industry warnings, my advice is simple: the future is now! Owners of existing buildings in high-risk areas, especially those vulnerable to hurricanes and wildfires, would do well to stop putting off the upgrades needed to make their properties more resilient to climate change. Failing to make those upgrades could leave their buildings severely damaged and subject to natural disaster risks that insurers are no longer willing to underwrite.
I agree that many people do not upgrade their buildings to deal with real issues – in the past, when a natural disaster occurred, the destruction happened and people upgraded their protections. Codes have gotten tighter. However, very serious scientists dispute the unwarranted meme/claim that these events are due to “climate change”. The number and severity of storms is no worse than many years ago. The argument should be based upon scientifically verifiable facts such as buildings need better protection than they were permitted to get by with in the past and not rely on a ‘climate change’ bogeyman that activists spout when climate is really the farthest thing from their minds in pushing this agenda.