On January 7, Adam Rose offered a presentation titled, “Mitigation and Resilience Save" at the Annual Symposium of the Multi-Hazard Mitigation Council. The MMC is an arm of the National Institute of Building Sciences (NIBS), an influential organization of architects and engineers that engages in a broad base of research, outreach, and implementation issues, including the MMC’s charge of addressing the safety of the built environment under extreme stress.
The MMC played a major role in guiding the development of FEMA’s HAZUS loss estimation software. It also managed the report to Congress titled Natural Hazard Mitigation Saves: An Independent Study to Assess the Future Savings from Mitigation Activities. Rose served as the research team leader on the benefit-cost analysis aspect of this 2005 study, which found that 10 years of FEMA hazard mitigation grants between 1993 and 2003 yielded benefits four times their costs. The study is widely known as the “4 to 1 mitigation study" and has been widely cited in the academic literature and congressional hearings. It has led to hundreds of millions of dollars of additional funding for FEMA mitigation efforts. Rose is a member of a team putting together a white paper for Congress to fund an update and extension of that study.
Rose’s talk summarized the 2005 study, which also found that the FEMA grants essentially had a yield equivalent to a 14% return on a 50-year annuity. Another perspective was that each dollar expended on the mitigation grants resulted in the reduction of $3.5 of federal government relief. However, he pointed out that 95% of the grants were public sector and that similar opportunities exist in the private sector, which owns 90% of the non-residential buildings in the US.
He also pointed out that the 2005 study did not delve into post-disaster resilience that could reduce business interruption (BI). BI just begins at the point of a disaster but continues until recovery. Recently, BI has even exceeded property damage in the case of Hurricane Katrina and in his own study of the economic consequences of the World Trade Center attacks. Rose explained the many low-cost options can be applied in this case, including contracting for back-up locations in advance of disasters, maintaining the vacant building stock in good order, cutting red-tape in insurance and government relief payments, and repairing and reconstructing buildings more quickly. He noted the need to more closely examine the balance between pre-disaster mitigation and post-disaster resilience.