The Economic Benefits of a Disaster-Resistant University

Disasters affect universities across the country. In the past decade, Stanford University and California State University, Northridge, were severely damaged by earthquakes; the University of Miami, Tulane University, and East Carolina University were closed by hurricanes; the University of North Dakota, Colorado State University, Syracuse University, and many others have faced damage and business interruption from flooding. Not only are universities unique organizations that serve their communities and states, but they are also repositories of significant federal economic and social investment. Annually, federal agencies fund about $15 billion in university research. Much of the research is multiyear, and the value of ongoing research is obviously higher. Much American progress is fueled by academic research results.

University Hall, an early example of bracing retrofit on the UC Berkeley campus

The Federal Emergency Management Agency (FEMA) and the University of California, Berkeley, have funded the research and development component of the Disaster Resistant Universities (DRU) Initiative as the pilot for a national program. The Disaster Resistant Universities Initiative is intended to motivate and enable the nationís universities to manage their vulnerability to local hazards and to reduce their losses in foreseeable disasters. Beyond the primary need to protect students, staff, and faculty, the Disaster Resistant Universities Initiative is designed to help universities safeguard their research capacities as well as the human capital associated with the academic environment.

The Disaster Resistant Universities Research and Development Project generates a national model that can be adapted and used by other institutions. The project has five major components: (1) hazard assessment and loss estimation; (2) evaluation of economic impacts; (3) development and implementation of a strategic risk management plan; (4) development of a model program for university disaster resistance; and (5) progress on national funding for hazards mitigation in research universities. This article describes the research undertaken at the University of California, Berkeley, on the first two components: a prototype for the development of loss estimation procedures, and evaluation of the potential economic consequences of the most severe local disasteróa major earthquake on the Hayward fault. Separate documents, not described herein, include a strategic risk-management plan for the University of California, Berkeley, and guidelines that other universities can use in their own loss-reduction efforts. In Washington, D.C., FEMA staff are working with congressional staff and a coalition of other universities to establish new funding for the DRU Initiative over the next ten years.

The report and three technical appendices resulting from this research were prepared by Mary Comerio, Professor of Architecture and PEER faculty participant at the University of California, Berkeley, with assistance from the project team consisting of faculty in engineering and economics (Professor Vitelmo Bertero and Professor John M. Quigley), graduate student researchers (Austin Troy, Vic Singh, John Stallmeyer, Juan Onesimo Sandoval, and Jung In Kim), and professional consultants (Geomatrix, Geotechnical Engineers; Degenkolb, Structural Engineers; Forell Elsesser, Structural Engineers; Rutherford and Chekene, Structural Engineers; Davis Langdon, Adamson, Cost Planning; Sedway Group, with George Goldman, Economic Consultants). The report is intended for the Chancellor and senior administrators at the University of California, Berkeley, who demonstrated their commitment to seismic safety through the establishment in 1997 of the SAFER (Seismic Action Plan for Facilities Enhancement and Renewal) Program. In addition, the report is for James Lee Witt, the Director of FEMA, who saw the potential for a national university-focused hazard mitigation initiative evolving from UC Berkeleyís SAFER Program. More broadly, this report is for all major universities and their surrounding communities to assist in estimating the impacts of natural disasters and to focus attention on the importance of loss-reduction programs and business resumption planning.

The 1907 Hearst Mining Building, a Beaux Arts masterpiece on the UC Berkeley Campus, is just 800 ft from the Hayward fault. -- Bruce Cook Photography

This study of earthquake hazards and the economic consequences of potential losses at the University of California, Berkeley, grows out of a long-term commitment to understanding and addressing seismic safety issues on the part of the campus and the systemwide administration. The campus conducted its first seismic review of campus buildings in 1978. Based on that survey, a number of buildings were strengthened, including South Hall, University Hall, Doe Library, and the Valley Life Sciences Building. In the late 1990s, the campus renewed its commitment to improving structural conditions in campus buildings with the launching of the SAFER Program. This bold seismic safety initiative established a twenty-year time line and a $1 billion dollar budget to improve the seismic resistance of campus buildings, making them safer for students, faculty, and staff.

This research advances our understanding of potential earthquake losses by assembling data on soil conditions, infrastructure, nonstructural building conditions, contents, numbers of occupants, and the location of critical functions. Taken together, the data are used to assess the potential financial loss and the universityís capacity to recover after a damaging earthquake. The findings of this study, in combination with the ongoing SAFER program, serve as the basis for an effective seismic risk-management program.

Although no other campus in the United States has done more than the University of California, Berkeley, in addressing its natural hazards risks, the university needs to minimize the impact of potential losses through wide-ranging hazard mitigation programs and postdisaster business resumption planning.

The Loss Model

Estimating the toll is the first step toward reducing losses. To assess the hazards and estimate the potential losses resulting from an earthquake, the project team relied on multiple engineering evaluations of various conditions. To develop a loss-estimating model appropriate to a campus setting, we prepared a microzonation soil map of the campus, estimates of ground shaking, and maps of the location and condition of campus infrastructure. We studied the structural and nonstructural conditions of campus buildings, and described each building in terms of how it is used (e.g., classrooms, labs, offices, libraries, event spaces) and in terms of the annual average number (as well as peak hour number) of occupants. The campus data were then used to estimate the cost of repairs and downtime in three earthquake scenarios, defined as Occasional, Rare, and Very Rare.

Base isolators being installed January 2000. --Photo by Peg Skorpinski

Conservative cost estimates for replacements and repairs suggest that damage could reach $600 million to $2.6 billion, assuming that buildings with 60 percent or more structural damage would be replaced. If 50 percent of structural damage were to be used as a measure of replacement, the upper limit of replacement and repair costs would rise to $3.5 billion. Equally significant, in a Rare earthquake (M 7.0), approximately 40 to 60 percent of all campus space could need more than twenty months for repairs. This does not actually mean that 40 to 60 percent of campus buildings would be closed for up to two years, but gives a good indication that significant amounts of space will not be useable for long periods of time. In an earthquake, building damage and the time needed for repair will vary, depending on the location of the epicenter, the duration and directivity of the ground motions, and the availability of money and materials for repair.

Under the circumstances of the Rare earthquake scenario, the research team believes that present building conditions could force the campus into a short-term closure. Although a limited schedule of classes could be resumed using temporary trailers, we estimate that it could take up to two years before a normal schedule could be offered. In a Very Rare earthquake (M 7.25), 50 to 75 percent of all campus space could need more than twenty months for repair, which could close the campus for up to one year. It is likely that it could take four years for a return to pre-earthquake standards of operation.

These estimates are based on conditions current in 1999. Obviously, as buildings are renovated, their conditions are improved and downtimes are reduced. By 2006, ten major central campus buildings will have completed seismic retrofits. Another fifteen buildings are slated for seismic repairs by 2011, reducing the potential for long-term building closure substantially.

Economic Impact

The evaluation of the economic impact that a severely damaged university would have on the surrounding community takes into consideration the estimates of potential loss and the capital flow of the university (operating expenditures, salaries, income). In the event of a Very Rare earthquakeóthe only economic scenario in which a year-long campus closure was considered possibleóthe first-year losses in three counties include approximately 8,900 jobs, $680 million in personal income, and $861 million in sales. While these losses would be offset in the larger economy by the increase in construction jobs generated, it is important to note that the losses and gains are in very different sectors of the economy.

The research team conducted two additional economic studies to evaluate the impact of the various earthquake scenarios on research at the University of California, Berkeley, and on human capital in the region. In a survey of organized research units, we found that 72 percent of all research income went to twenty-five research units, primarily in science and engineering. Moreover, 50 percent of the research dollars that come to the campus are concentrated in just seven buildings, or 12 percent of campus space. Seventy-five percent of research funds are expended in a total of seventeen buildings, one third of campus space. The seismic ratings of eleven of these buildings are such that in a Rare earthquake scenario, they would be closed for repairs for an extensive period. Although four of the eleven buildings are scheduled for seismic repairs by 2006, the potential for loss in the research sector suggests that the viability of the ongoing research endeavor at UC Berkeley would be threatened.

Close-up of installation of base isolators. --Photo by Peg Skorpinski

Using data for recent graduates of the University of California, Berkeleyís College of Engineering and Haas School of Business, we estimated the number of out-of-state students who continue to reside in California after graduation. The university exercises considerable influence in attracting and retaining postgraduate workers. Each additional graduate that remains in California results in almost a million dollars in increased state output (gross domestic product), and $100,000 in state tax revenue, over a lifetime, in present value terms.

This economic analysis suggests that when a university is located in a large metropolitan area with a complex and dynamic economy, the impact from an institutional closure is not entirely represented by the immediate loss of jobs and local sales. Much more important is the universityís contribution of highly trained professional workers to the regional economy. If the supply of professionals from the University of California, Berkeley, were ever seriously interrupted, the impact on the region would be dramatic.

Findings

The University of California, Berkeley, remains vulnerable to earthquake losses despite the extraordinary commitment to improve the life safety of hazardous buildings. This vulnerability can be attributed to three key factors. First, even buildings considered ìfairî in the 1997 structural evaluation may be subject to considerable nonstructural (contents) damage. Under current conditions, structural and nonstructural damage could close 50 to 75 percent of campus space for up to one year after a magnitude 7.01 or larger earthquake on the Hayward fault. Second, among the seventeen buildings in which 75 percent of the research is concentrated, the same proportion of spaceóthat is, 50 to 75 percentóis likely to be significantly damaged and closed after a major seismic event. 2 This will seriously disrupt existing research and limit the capacity to take on new research for a long period. Finally, one third of the replacement value of the campus is in its contentsóbooks, technical instruments and research equipment, art, specimensóall highly susceptible to damage and essential to the teaching and research mission of the university.

Although the loss to buildings and contents represents 30 to 40 percent of the replacement value of the campus, the greatest potential losses, in academic and economic terms, would result from a substantial earthquake that forces even a partial campus closure. This study adds a business-oriented perspective to the traditional development of natural disaster loss-reduction measures for universities. It suggests a comprehensive approach that includes educating the campus community about the many aspects of, and possibilities for, loss reduction.

Specific to the University of California, Berkeley, the SAFER Programís goal to improve life safety in campus buildings should expand to seek above-code performance for some new buildings and to include policies and assistance for campuswide business resumption and disaster recovery planning, comprehensive nonstructural hazard mitigation, and campus community education and trainingóall of which are necessary to maintain its tradition of academic and research excellence. The ongoing success of the SAFER Program can be enhanced by implementing the following recommendations:

1. A policy to look beyond the life-safety criteria for seismic retrofits to the concomitant importance of limited damage in teaching, research, and library space, and limited damage to critical infrastructure in order to insure continued operations after a large earthquake. Such an approach would include a priority system for all campus construction (retrofits, demolitions, and new construction) that considers life-safety and loss reduction, as well as ongoing operational needs.

2. A campuswide nonstructural mitigation program aimed at loss reduction in laboratories, libraries, classrooms and offices.

3. A strategic campus plan, encompassing academic and physical planning, as well as business resumption planning, that uses the seismic retrofit program to improve the quality of teaching and research activities for the future. The current master planning effort, the New Century Plan, must maintain its focus on seismic safety as the driver for many of the changes on campus in the foreseeable future.

In order to have a campus that remains one of the nationís most prestigious academic institutions, the University of California, Berkeley, should continue the program of structural retrofits for existing buildings, and consider for each retrofit or new project constructing above-code to ensure postearthquake functionality in the structure. In addition, the seismic improvements to structures should be one part of a comprehensive risk-management program. For any major teaching and research institution where operations are threatened by natural disasters, hazards mitigation and postdisaster recovery strategies must be a regular part of the ongoing planning in every academic department and management unit.

Professor Mary C. Comerio
Institute of Urban and Regional Development
University of California, Berkeley

1 Based on ground shaking estimates used in the Rare scenario earthquake, that is, with a 10 percent probability of exceedance in a fifty-year period, also known as an earthquake with a 475-year return period. 2 As buildings are repaired, the percentage of vulnerable space will be reduced over time. However, structural improvements reduce, but do not eliminate, earthquake damage.