Posted by on September 25, 2017 3:51 pm
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Categories: Central Mexico Corruption Councils Disaster earthquake Economy Environment Geology Insurance Companies Mechanics Mexico Mexico City earthquake Mises Institute Natural disasters New York Times Seismology Sichuan earthquake Wall Street Journal

Authored by Ryan McMaken via The Mises Institute,

During the 1987 Whittier Narrows earthquake in Los Angeles, my mother was working in downtown Los Angeles in one of the buildings then known as the Arco Towers

The building was of early 1970s vintage, but thanks to expensive technology introduced to help high-rises withstand earthquakes, the Arco Towers merely swayed from side to side, rather than collapse in response to the quake. That earthquake was a medium-sized earthquake (to use casual terminology), but the building is designed to withstand far larger tremors. Eight people died in the wake of the quake.

Two years earlier, the 1985 Mexico City earthquake struck with devastating results. While the earthquake was considerably stronger, the casualty totals were far beyond what we would expect were a similar quake to hit Los Angeles. While the number is still in dispute today, more than 30,000 people may have died in the quake, thanks largely to collapsed buildings. 

Fortunately, the death toll in Tuesday’s Mexico-City quake looks to be much, much smaller than was the case in 1985. So far, casualty counts number in the low hundreds. 

The Wall Street Journal today attributes this to improvements in building codes: 

Mexico City’s building codes improved dramatically in the years following the city’s 1985 earthquake, a magnitude 8.1 temblor that killed more than 6,000 and toppled nearly 2,300 buildings, including hospitals, schools, hotels and entire high-rise apartment blocks.

After 1985, “the building codes changed a lot,” said Ricardo Warman, an architect who both builds and renovates houses in the Condesa and Roma neighborhoods of central Mexico City, among the hardest hit on Tuesday. “That is why most of the buildings that fell are from the 1950s, ’60s and ’70s.”

But why was Mexico still building earthquake-prone construction in the 1970s? By the mid-80s, California had already been at work addressing the earthquake issue for years. 

Why didn’t Mexican cities pass better building code laws before then? 

Well, it turns out that they did have building codes before then, but merely passing laws doesn’t actually solve problems. Prior to this week’s quake — while commenting on Hurricane Harvey — Bret Stephens at the New York Times recalled: 

Why do richer countries fare so much better than poorer ones when it comes to natural disasters? It isn’t just better regulation. I grew up in Mexico City, which adopted stringent building codes following a devastating earthquake in 1957. That didn’t save the city in the 1985 earthquake, when we learned that those codes had been flouted for years by lax or corrupt building inspectors, and thousands of people were buried under the rubble of shoddy construction. Regulation is only as good, or bad, as its enforcement. 

So, for nearly 30 years leading up to the 1985 quake, new, improved building codes had been in place; but it seems that — as one Mexico City engineer described it — enforcement was “very lax.”

But why did they ignore them? Was it part of just an amorphous tolerance for doing a lousy job? As Walter Block recently noted, we can’t just blame corruption: 

They can have all the regulations and “safety standards” they want in poverty-stricken nations such as [Bangladesh]. Either these bureaucratic rules will be ignored, or, if they are rigidly upheld and enforced, then virtually no new houses will be built, and almost all extant houses will have to be torn down. Why? Since this country is so poor, it cannot possibly live “up” to these modern, western, regulations and “safety standards.”

In most cases, people don’t ignore building codes because they’re sociopaths who don’t care about the safety of their customers.

Thanks to the existence of greed, of course, there’s always the temptation to skimp on safety in order to pad profits, and just hope things work out. But in wealthy nations, there are numerous incentives beyond government regulation to not do this: (1) insurance companies may refuse to insure structures that are of questionable safety, and (2) there are well-developed legal systems that facilitate lawsuits against negligent builders. 

But perhaps most importantly: consumers of housing and office space in wealth countries can more often afford to pay for units in buildings where expensive retrofits and safety features have been added. In poor countries, by contrast, consumers are far less likely to be able to afford buildings constructed to specifications that would be considered run-of-the-mill in wealthier areas. Given that producers can only set prices at levels their customers can afford to pay, builders will build accordingly. 

The end result is that in wealthy areas, paying close attention to code regulations may shave some profitability off a building project. But in a poor country — as Block correctly suggests — rigid enforcement is more likely to totally erase profitability, and prevent new construction from being built at all. On other words, the opportunity cost of building a modern, earthquake-proof building in a poor country is much higher. 

So what’s the solution? 

As Stephens points out: “Every child knows that houses of brick are safer than houses of wood or straw — and therefore cost more to build.” Mexicans — of course — are already well aware that the ideal solution is to produce high quality housing for everyone. The problem is that sort of thing is expensive. 

Unfortunately, the answer to this conundrum is the same as with building to withstand hurricanes and other natural disasters:  bulding wealth is the only true long term solution. 

City councils can pass building code laws all day long, but as long as residents lacks the incomes necessary to afford housing, offices, and factory space that’s built to withstand earthquakes, there will always be an especially large incentive to cut corners on construction. Innocent people will suffer as a result.

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