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New Funding Will Soon be Available to Eligible California Apartment Owners to Comply with Mandatory Soft Story Retrofits

$250M of financial assistance for retrofit mandates

(Disclaimer: Partner will update information periodically. The public agencies are working on program implementation.)

On June 30th, 2022, Governor Gavin Newsom signed a $308 Billion state budget including Senate Bill 189 (SB 189), which appropriates $250M of financial assistance for high-risk, soft-story multifamily buildings that are subject to city or county retrofit mandates.

An estimated one million Californians, many low-income, elderly, and/or disabled, are currently housed in buildings categorized as soft story. Soft story buildings are vulnerable to seismic damage and may present a life safety hazard during or after a seismic event. Many cities have followed San Francisco and Los Angeles to draft mandatory or voluntary seismic retrofit programs and ordinances.

In the last couple of years, State-assisted funding for these ordinances ran out, which drove certain California apartment building owners to sell their buildings or violate the ordinances and get fined.

While SB 189 offers new funding opportunities for eligible building owners, the caveat is that the processes for application, approval, and distribution of funds will be implemented city by city. It could take a while before the programs and funding are easily accessible to the needed building owners.

Financial assistance options for eligible property owners are listed on California State Treasurer’s website under the section Local Government Seismic Assistance Programs. It appears that there will be updates on cities’ websites as the funding is trickling down the pipeline. Each city has slightly different soft story retrofit application requirements and deadlines, along with various provisions to reduce the financial impact on property owners: City of Los Angeles allows for a combination of rent increase and cost recovery; City of Beverly Hills allows for refund of soft story seismic retrofit building permit fee; and City of Berkeley will refund Transfer Tax dollar-for-dollar.

Securing funding is only the first step of the earthquake retrofit process. The next steps include a site assessment, structural design, municipality approval, bid review, construction, and structural observations performed by a team of qualified experts. State funding is limited and on a first-come, first-served basis, so now is a good time for California apartment owners to explore retrofit solutions.

Additional Resources

  1. SB 189- Senate Bill, Section 11
  2. Governor’s Office of Emergency Services (Cal OES)
  3. California Earthquake Authority (CEA) 877-232-4300