The Bottom Line vs. the Fault Line

Well-Connected Landlords Want the City to Pay for Mandatory Seismic Retrofits


People really like classic vintage apartments, but they're old and in decay. It can create a real money pit for the owners, so these buildings are becoming less and less investable. New construction is a safer bet, but then again we all love classic old stuff.
Good article here, lots of interesting things going on with this issue.
"A lot of these people owe 75 percent of the value of their buildings to the bank."


"A lot of apartment owners have no business being landlords."

If you weren't so deeply leveraged, this wouldn't be an issue. It's not Portland's fault you are in over your head.
New construction is a safer bet, but then again we all love classic old stuff.
Another way to look at this is: If you live in an old brick building you should be thinking about moving.
If you live anywhere *near* an old brick building, you should be actively packing.

Not all investments are sound ones, and no investor is entitled to make a profit on their investment, and yes - I guess that does need to be said somewhere, since it's not spelled out in the article and the classist captains of real estate seem to think otherwise.

The owners of these buildings invested poorly, whether they own one building or thirty. It is interesting (not interesting at all, really) that the same moneyed interests who argue that the market controls rents, for instance, and that is why they can't afford safety are the same folks who are resisting the argument the city is making: which is that they invested in buildings that need a lot of work to be safe, and it really isn't anyone's job (certainly not the city's job) to protect them from poor investments. This is the market, this is what the market does. If you can't afford the upgrades, then either tear down the unsafe building you own and build another one, or sell it to someone who *can* afford to either pay for the upgrades or build something safer there.

I have no sympathy for folks who bought whatever they bought as an 'investment' and then expect public safety as a result of their poor choices to be someone else's responsibility. If your investment was purchased for your benefit, then care of that investment -including making it safe for the public who lives within the seismic influence zone of your investment- is your responsibility, period.

If the city offered the choice between seismic upgrades or hazard insurance in an amount adequate to cover their liability in the event of the building falling down in an earthquake (anyone tried to get earthquake insurance lately?), I'm pretty sure those 'investors' would quickly realize the true cost of their investment, and some of them might even act accordingly. Dare to dream.
His name is "Walter McMonies". You couldn't make this up.
"Waaaah, my McMonies!"

While they're whining about cash flow problems there are people that will die ugly and messily in those old brick buildings if the Cascadia Subduction Zone fault so much as burps.
You and I subsidizing landlords is a bad idea. Landlords already have huge tax advantages because they can write off depreciation while their buildings are actually appreciating.

The biggest issue is that seismic retrofits of brick buildings may save the residents, but the structures will have to be torn down after the big earthquake. There is no seismic retrofit for a brick building that can prevent the bricks from falling into the street. The retrofit simply holds up the structure.
It's unfortunate, but it seems we're irrationally attached to our old buildings in this city. Sure, I think they tend to look better than the chichi Andy Warhol stacks of boxes coming up in their places, that are priced for California and East Coast money, but they're both death traps and money pits. They need to go; so much of Portland sits on soft clay or fill that even with seismic upgrades a lot of buildings will suffer severe damage or come tumbling all the way down in a 7.5-magnitude or higher quake.
Get off your soap boxes. Demand creates supply. If people refused to live in these buildings because of the safety hazard, the landlords would be forced to retrofit or go broke. Think of it this way: Why do people still drink and smoke? For their health? No, because it feels good and looks cool. People live in these buildings to be live downtown.

Quit blaming the system and wise up. Change never occurred from a complaint (or a comment on a message board).
I've got a better idea: Condemnation on the basis of public safety. Fix it or face razing by the city at your expense.
The City is taking the responsible path by wanting to prepare for an earthquake that we know is coming. Should the city have to pay for this needed, but costly, regulation? No. The building owners make money from their investments, let them pay for it.

After giving this a few minutes of thought, here is a possible solution: Grandfather in the existing brick buildings to the CURRENT code, but require them to disclose to their residents that they are not built to the recommended seismic code, especially in residential buildings. Additionally, give the building owners a reasonable amount of time to develop a plan to retrofit their buildings. At the same time, charge them a fee to keep their buildings on the current standard. Take the collected fees, and use it to provide low interest loans to help pay part of the cost of upgrading. Loans, not subsidies.

For those buildings where it is more cost efficient to retrofit their buildings than it is to pay the fee, they will follow that route. For those where the fee is cheaper, let them pay that. Landlords will eventually recover their money through the higher rents we know they will charge.

But this is only a suggestion.
The point of seismic protection in any building, old or new, is not to save the structure, but rather to protect the occupants. Even in new construction it is prohibitively expensive to build to a standard that would see continued use of the building after a major seismic event.