Mayor Broadens Earthquake Regulations

LOS ANGELES—In July, Los Angeles Mayor Eric Garcetti announced plans to broaden the earthquake regulations for new construction properties. The plans will begin with three new “Preliminary Fault Rupture Study Areas” in West Los Angeles, the South Bay and Northeast Los Angeles, requiring significant seismic investigations for new developments. To find out exactly what these requirements entail, how current projects will be affect and what developers and property owners need to know, we sat down with Loryn Dunn Arkow, a partner at Stroock & Stroock & Lavan LLP. Here, she tells us everything we need to know about the seismic regulations for new construction and how they are changing.

GlobeSt.com: What are the current regulations for new construction near earthquake fault lines, and what are the mayor's proposed changes to strengthen these regulations?

Loryn Dunn Arkow: The Mayor's announcement does not alter existing regulations but instead broadens the reach of the requirements of the Alquist-Priolo Earthquake Fault Zoning Act (“Alquist-Priolo”) in the City of Los Angeles by identifying the new zones that had not officially been subject to Alquist-Priolo's requirements. Adopted by the California legislature in the aftershock of the 1971 San Fernando Earthquake, which caused extensive damage, Alquist-Priolo aims to curb future damage resulting from “surface rupture” underneath buildings constructed over “active” faults.  Under Alquist-Priolo, a fault is active if it has ruptured within the last 11,000 years. 

Location of a parcel within a zone identified pursuant to Alquist-Priolo does not in itself preclude development of the parcel, but instead requires a site-specific geological investigation and written report prepared by a licensed geologist to evidence that buildings for human habitation will not be constructed across an active fault.  Such studies may require trenching or in some cases dozens of borings deep below the surface of the property.  They can cost $30,000 to $50,000 at a minimum and sometimes millions of dollars.  If any active fault is identified on the parcel, then no building for human habitation may be constructed generally within a setback of 50 feet from the surface trace of the fault line. 

Alquist-Priolo charges the California Geological Survey (“CGS”) with the identification of Earthquake Fault Zones throughout California.  However, state budget cuts have delayed the lengthy process of identification of zones by CGS.  Mayor Garcetti's identification of additional zones in the City of Los Angeles to be covered by the requirements of Alquist-Priolo was described by his Office as a temporary measure until CGS establishes permanent Alquist-Priolo Zones.

GlobeSt.com: When will these new regulations come into effect and will properties already under construction need to apply?

Dunn Arkow: The requirements of Alquist-Priolo apply immediately to property within the Preliminary Fault Rupture Study Areas identified by the City of Los Angeles. In fact, while the official announcement of these areas is new, in reality, the City of Los Angeles had begun to extend heightened seismic investigation requirements in these areas over the last two-year period. To the extent a project was permitted prior to the implementation of these requirements, construction will not be impacted.  However, any project that has not yet received building permits from the City of Los Angeles will be required to comply with the requirements of Alquist-Priolo as implemented by the City.

GlobeSt.com: How could these tighter restrictions affect projects in the pipeline?

Dunn Arkow: In some cases where projects were halted mid-stream during the downturn and are now being resurrected, property owners may be in for a rude awakening in the face of heightened seismic investigation requirements where project approvals were either not previously obtained or have expired.  For these and all projects in the pipeline that have not yet received permits, not only will the costs of investigation be higher than previously planned, but the owner may learn, upon obtaining the results of the investigation, that no habitable building may be constructed on the site, rendering the property nearly valueless.

GlobeSt.com: What should developers know about these restrictions?

Dunn Arkow: Any property owner, or potential purchaser, who intends to develop property in Los Angeles, must confirm whether the property lies within the boundaries of the newly designated Preliminary Fault Rupture Study Areas, or within a previously existing Alquist-Priolo Earthquake Fault Zone designated by CGS.  A property owner can do so by searching the address of the property at atzimas.lacity.org.   If the property is located in a designated zone, a licensed geologist should be consulted at the outset.

Inclusion in a zone subject to Alquist-Priolo significantly increases the risk associated with any property that is otherwise a good candidate for development or redevelopment.   Before any judgment regarding the value of a potential development is possible, tens of thousands (or more) dollars must be expended to evaluate the site and whether it is, in fact, buildable.  Deals need to be structured in a fashion to allocate risk and expense between buyers and sellers of development land located in these expanded zones to account for the risk of discovering an active fault and failing to obtain approvals for development as a result.

Note that the designation of the Preliminary Fault Rupture Study Areas by the City of Los Angeles does not affect existing buildings or require studies to be performed with respect to existing structures.  However, a geologic study may be required for extensive additions to or renovations of existing structures. 

GlobeSt.com: Last thoughts?

Dunn Arkow: While public safety and mitigating risk of loss of life and property damage in a significant earthquake are certainly laudable goals, some question whether the bright lines of Alquist-Priolo are drawn in the right places.  For example, is the magic number of 11,000 years without rupture appropriate?  The risk may not be so different from a fault with 10,000 or even 8,000 years without rupture.  Further, the absolute bar on construction of any habitable structure over a fault line may be too rigid where design, technology and other modern measures may adequately address the potential for damage from earthquakes.