But how to convince society to retrofit? Life safetyisn't really a big concern in the U.S., but
potential economic lossis. We need partnership among governmentt agencies (especially at the
state and federal levels), earthquake engineers, and financial institutions to establish and promote
incentive programs that offer economic benefits to owners. Examples:
-government offers tax credits for retrofitting
-lenders require retrofitting, because owner will walk if damage exceeds equity
-lenders require high-accuracy estimate of PML (possible maximum loss), and transfer cost
to building owner
-insurance industry stops "dangerously undercharging" for earthquake coverage, partly to
avoid industry-wide catastrophe, moreso to avoid disincentive to retrofit

Insurance rates are too low!
What is risk to insurance company?
determine value of insured property : e.g., $10 million
determine PML (possible loss): e.g., 50% = $5 million

possible loss/yr, if EQ every 200 yr= $5 million / 200 yr= $25,000/yr
possible loss/yr, if EQ every50 yr=$5 million / 50 yr = $100,000/yr

How much does insurance company take in? if $2/$1000 of coverage, insurance cost = $5M x $2 / $1000=$10,000/yr

Thus, insurance industry subsidizes risk and defeats any incentive to retrofit.

Costs of retrofits ("upgrades"), excluding costs of other required upgrades (sf - square foot):
tiltups$1/sf
steel frame$10/sf
URM$15/sf
concrete frame$25/sf
historic$100/sf

The main challenge facing exiting buildings is societal rather than technical.

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