Mayors of several prominent California cities are urging the passage of a bill in the state Assembly that would give tax credits as an incentive to upgrade and modify seismically “at-risk” buildings.
On June 2, the mayors of Los Angeles, Santa Monica, San Francisco, Oakland and Berkeley sent a letter to Mark Leno, chair of the state Senate Standing Committee on Budget and Fiscal Review, showing support for Assembly Bill 428, which would create a tax credit for building owners to retrofit buildings considered “at risk” of collapsing in the event of a major earthquake. The tax credit would cover 30 percent of the costs of any improvements done after the beginning of 2016 until 2021.
“One of the big problems with seismic retrofitting is how you finance it and pay for the upgrades,” said Berkeley Mayor Tom Bates. “This would be an opportunity for people to get a tax credit and help them with that burden.”
Examples of “at-risk” buildings included in the bill are soft-story buildings — those with an open first floor and housing above the floor — and older concrete or brick buildings that have not been reinforced to fit modern standards. These particular examples have not previously been incentivized with a tax credit.
According to the bill, the partial tax credit would cover construction projects such as anchoring building structures to their foundations, installing automatic gas shutoff valves and bracing cripple walls — short, above-ground foundations that are often weak in older homes and susceptible to collapse during an earthquake.
In order to receive the tax credit, building owners must obtain certification from the city that their building is considered “at risk” based on the city’s building codes and that the planned construction projects on the building are appropriate seismic retrofits.
If passed, however, the tax credit would not apply to the Berkeley campus, according to Bates. By definition, a tax credit cannot be applied toward a nontaxpayer, and the campus has a tax-exempt status as a state educational institution.
According to Christine Shaff, spokesperson for the campus real estate division, buildings in need of work have either completed improvements or are currently in the process of retrofitting or replacement. Funding from the state for construction, however, has decreased over the past few years as state funding in general has declined, slowing the pace of building upgrades.
“The university used to get a large part of its budget from the state,” Shaff said. “That has reduced over the years, and that included a lot of money for construction.”
While the bill does not apply to the campus, Bates was optimistic about the bill’s effect on the greater Berkeley community, saying the bill would help people make needed upgrades to their buildings. There was not any bill like this during his 1976-96 tenure in the state Legislature, Bates said.
“We live in earthquake country,” Bates said. “Any help we can get to make it economically feasible is great.”