Case 02-1: Potential Apartment Renovation

Review The Situation:

Ms. Jones owns several apartment buildings in Urbanville, a moderate-sized city in a region of high seismic hazard. One of the apartment buildings is a wood-framed structure designed in the early 1960s. The building has 5 stories with a fairly open, ground-level parking area.

The local government has recently enacted some tax and other incentives for property owners to retrofit certain classes of buildings that are considered seismically hazardous, including apartments with this type of "tuck-under parking" configuration. (There are, however, no mandatory upgrade requirements in Urbanville.) Ms. Jones contracts with a local structural engineering firm to provide a seismic evaluation and conceptual retrofit design for the apartment building.

The evaluation concludes that the building has a soft lower story and suffers from a lack of adequate shear wall and diaphragm capacity throughout the height of the building. The result is that mitigation of the hazards to a basic "life safety" performance level for the design level earthquake (10% chance of exceedance in 50 years) will require that the building be vacated for a substantial period of time for the construction.

The residents of the building, who are primarily low-income families, on month-to-month leases, with very few options for alternate housing, find out about this seismic study and, as a unanimous group, appeal to the building owner not to go ahead with the work out of fear of being displaced. Ms. Jones relays the tenants' concerns to her structural engineer, who suggests an alternative upgrade approach using exterior elements. This option would allow the tenants to continuously occupy the building, although there will be some minor interior impacts. Assume that the expected level of seismic performance is essentially the same for both options.

Cost estimates for the total project (hard and soft costs) were prepared for both options. Assume that the exterior option is approximately 25% greater than the interior option. Assume also that the tax benefits throughout the useful life of the building do not offset the cost of the seismic renovation. In addition the exterior option has significant aesthetic impacts on the building, of which Ms. Jones and her architectural consultant are not too fond.

Which option should Ms. Jones pursue?

Possible Actions:

The following is list of possible actions that Ms. Jones could take. Note that these actions are not always mutually exclusive. Rate these choices on the following scale based on what you think would be the best action considering the interests of all stakeholders. Please consider all of the listed actions before rating each one. The list does not contain all possible actions (or reasons for actions), and additional actions not included in the list may be suggested at the end of this section.

5 — Strongly Agree 4 — Agree 3 — Neutral 2 — Disagree 1 — Strongly Disagree

Rating (Select Choice) 5 Strongly Agree 4 Agree 3 Neutral 2 Disagree 1 Strongly Disagree : a) Do nothing, since both upgrade scenarios are unfavorable. There is no statutory requirement for seismic upgrade, and there is no direct net long-term financial benefit from the tax break.

Rating (Select Choice) 5 Strongly Agree 4 Agree 3 Neutral 2 Disagree 1 Strongly Disagree : b) Ignore the pleas of the residents and pursue the interior renovation option. Since the leases are month-to-month, Ms. Jones has no legal requirements, and Ms. Jones does not bear any ethical responsibility for the housing of her tenants.

Rating (Select Choice) 5 Strongly Agree 4 Agree 3 Neutral 2 Disagree 1 Strongly Disagree : c) Pursue the exterior option. Ms. Jones has some sort of moral obligation to consider the displacement of her tenants.