Residential Recovery from the Northridge Earthquake: An Evaluation of Federal Assistance Programs

Anastasia Loukaitou-Sideris and Nabil M. Kamel

Policy Research Program

DETAILED RESEARCH FINDINGS

CALIFORNIA POLICY RESEARCH CENTERU N I V E R S I T Y O F C A L I F O R N I A

Copyright© 2004 by the Regents of the University of California All rights reserved California Policy Research Center 1950 Addison Street, Suite 202 Berkeley, CA 94720-7410 Phone: (510) 642-5514 Fax: (510) 642-8793 Publications ordering information: (510) 643-9328 Program and publications information: http://www.ucop.edu/cprc E-mail: cprc@ucop.edu

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About the California Policy Research Center The California Policy Research Center (CPRC) is a University of California program that ap-plies the extensive research expertise of the UC system to the analysis, development, and im-plementation of state policy as well as federal policy on issues of statewide importance. CPRC provides technical assistance to policymakers, commissions policy-related research on state-wide issues, and disseminates research findings and recommendations through publications and special briefings. This study was commissioned by CPRC’s Policy Research Program.

Authors and Acknowledgments

Anastasia Loukaitou-Sideris is professor and chair of the Department of Urban Planning, School of Public Policy and Social Research; Nabil M. Kamel is a Ph.D. candidate and re-searcher at the Lewis Center for Regional Studies, University of California, Los Angeles. This research benefited from the support of the CPRC and the Lewis Center for Regional Pol-icy Studies, University of California, Los Angeles. The authors are also grateful to Alfonso Hernandez, Candace Koo, Julia Peck, and Urban Florian for their dedicated assistance. Special thanks go to Joan Lichterman and CPRC’s editing staff for their patient editing of the manu-script. The views and recommendations in this report are those of the authors and do not necessarily represent those of the CPRC, the UCLA Lewis Center for Regional Policy Studies, or the Re-gents of the University of California.

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CONTENTS Executive Summary ........................................................................................................ vii Introduction....................................................................................................................... 1 Research Questions and Methodology ............................................................................ 1 Residential Recovery Following the Northridge Earthquake....................................... 3 Performance of Federal Residential Reconstruction and Recovery Programs .......... 9 The Structure of Federal Assistance for Residential Recovery .................................... 9 Program Implementation and Implications of Eligibility Requirements................................................................................... 11 Variables Affecting the Distribution of Federal Funds ............................................... 14 Pathways to Recovery: Case-Study Analysis of Three Areas ..................................... 15 Santa Monica ............................................................................................................. 15 Canoga Park District .................................................................................................. 18 Crenshaw and West Adams District ........................................................................... 20 Conclusions ...................................................................................................................... 21 Policy Implications and Recommendations.................................................................. 23 References ........................................................................................................................ 27 Appendix .......................................................................................................................... 29

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List of Figures and Tables Figures

1. New Monthly Construction Permits for All Housing in Los Angeles County, 1988–2003...................................................................... 4 2. Median Sale Price for All Housing Units in Los Angeles County, 1992–2001 (in 1994 Dollars) ......................................... 4 3. Recovery Outcomes for Damage Quartiles Relative to Study-Area Averages.......................................................................... 5 4. Distribution of Damage, Assistance, and Insurance Losses in Assistance-to-Damage Quartiles....................................................................... 6 5. Recovery Outcomes for Highest and Lowest Assistance-to-Damage Quartiles Relative to Study-Area Averages..................... 7 6. Housing and Demographic Characteristics of Highest and Lowest Assistance-to-Damage Quartiles in Comparison to Study-Area Averages .......... 8 A-1. Los Angeles County Population, 1986–2002 ..................................................... 29 A-2. Sources of Federal Assistance by Program in Lowest and Highest Aid-to-Damage Quartiles............................................... 29 A-3. Areas Representing the Highest and Lowest Total Federal-Assistance-to-Damage Ratios (Includes SBA Business Loans) .. 30 A-4. Distribution of Federal Assistance Funds and Appropriations in the Northridge Earthquake (Including All SBA Business Loans) .................. 31

Tables

A-1. Evaluation of Recovery and Reconstruction Quality for Red-Tagged Residential Structures in Canoga Park ..................................... 32 A-2. Evaluation of Recovery and Reconstruction Quality for Red-Tagged Residential Structures in Santa Monica.................................... 33 A-3. Evaluation of Recovery and Reconstruction Quality for Red-Tagged Residential Structures in the Crenshaw and West Adams Districts ................... 34 A-4. Eligibility and Provisions of Major Federal Residential Assistance Programs ........................................................................................... 35

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EXECUTIVE SUMMARY The Northridge earthquake hit Southern California in January 1994, prompting the distribution of more than $12 billion in public and private funds for residential recovery. A number of studies have documented such things as the epidemiological and psychological effects of the earthquake on resi-dents, the performance of structures, and the distribution of recovery funds as they related to dis-tance from the epicenter or damage characteristics. We chose to complement these efforts by study-ing federal assistance for residential recovery, examining the dynamics of postdisaster recovery to assess the long-term effects of the earthquake on residential structures and development, and make recommendations for improving recovery strategies in future emergencies. Successful long-term recovery from a disaster implies more than just returning to predisaster condi-tions, but recapturing the developmental trajectory that was intercepted by the disaster. The extent of recovery can be measured by a wide range of indicators, such as changes in population and resi-dential units, vacancy rates, affordability of housing, retention of local residents, structural im-provements, extent of retrofitting, quality of life in areas with extensive damage, and so on. Addi-tional indicators may include the time taken for reconstruction, the quality of reconstruction, and residents’ satisfaction with recovery outcomes. To examine the long-term recovery from the Northridge earthquake we investigated how recovery policies, implementation strategies, and existing institutional arrangements affected postdisaster recovery outcomes. Findings from this study have implications for improving the resilience of the Los Angeles region, and more generally California, in the event of another major disaster. Research Approach We examined and assessed the effectiveness of the six major federal residential recovery programs: Small Business Administration (SBA) loans for homeowners, property loss, and business loans; Department of Housing and Urban Development (HUD) grants and loans; Federal Emergency Management Agency (FEMA) minimum home-repair grants, and FEMA individual and family grants for property losses. To assess their effectiveness, we studied archival records (e.g., public hearings and assistance re-cords), government publications (e.g., those pertaining to eligibility requirements for federal assis-tance, allocation of federal funds, and evaluative reports), and interviewed relief-program adminis-trators, public officials, residents, and community leaders. We also used spatial and statistical analyses to test the relationship between the distribution of fed-eral relief funds and a number of variables, such as earthquake damage and sociodemographic and housing characteristics for all of Los Angeles County. This analysis was complemented by an in-depth examination of the recovery process and its outcomes in three distinct areas of Los Angeles County: the City of Santa Monica, the Canoga Park district of Los Angeles, and the Crenshaw and West Adams district of Los Angeles.

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Recovery Outcomes On the whole, Los Angeles County did not suffer long-lasting losses of population or housing stock. In fact, between 1990 and 2000, the total population of the study area increased by over 600,000 people (6.3%), and more than 80,000 housing units were added (2.3%). Vacancy rates dropped, and the number of vacant units decreased by 43,000. These figures indicate that, overall, the Los Angeles region has recovered from the Northridge earthquake and has regained its appeal to people and investors. Nonetheless, residential recovery was not uniform. Areas that received less assistance relative to reported damage experienced a net loss of population, a reduction in the number of housing units, and a lower occupancy rate. These areas tended to have higher-than-average numbers of Hispanic, renter, low-income, and non-English-speaking households. A closer look at the extent and quality of reconstruction in Santa Monica, Canoga Park, and Cren-shaw and West Adams showed that although 90% of the red-tagged properties (those rendered uninhabitable by earthquake damage) have been rebuilt, their reconstruction time was longer than expected: about two years on average. Recovery outcomes also varied significantly from place to place and tended to be of varying qual-ity, with the recovery period extending for a longer time in lower-income neighborhoods—especially where the damage was extensive and concentrated. However, adverse conditions often were reversed and overall improvements in housing and neighborhood quality occurred in areas where local organizations were active, and where strong ties to local officials and elected represen-tatives existed. Nonprofit housing corporations played an important role in maintaining the supply of affordable housing. Effectiveness and Equity of Federal Relief Programs The distribution of federal funds closely matched the distribution of damage, as intended. In gen-eral, areas that reported more damage also received more assistance. Similarly, the public programs successfully complemented each other and private insurance coverage, and each program reached its target population. Areas with high concentrations of renters received a higher share of HUD grants, rental assistance, and SBA business loans (which were the primary source of assistance for multifamily buildings), whereas areas with higher concentrations of owner-occupied homes received higher shares of FEMA minimum home-repair grants and SBA homeowner loans. We found that federal programs worked as intended, mainly putting back or replacing what was in place before the earthquake. Because federal assistance programs were designed to compensate for homeowners’ disaster losses (as opposed to emergency needs), damage in more-affluent neighborhoods was likely to be more costly and such areas received more federal assistance after the disaster than poorer neighborhoods. Thus, more programs and resources were available for wealthier homeowners and in neighbor-hoods with a larger stock of single-family housing than in poor neighborhoods with higher concen-trations of rentals and multifamily apartment buildings.

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This disparity occurred because the main sources of assistance for multifamily apartment buildings were SBA and HUD loans, for which eligibility was determined by income levels and credit his-tory. Applicants who had limited financial resources and could not demonstrate their ability to re-pay the loans were considered ineligible. Owners of multifamily buildings applying for business loans to rehabilitate their properties had to demonstrate the profitability of such investments as business ventures and the ability to generate sufficient cash flow from the units’ rents to repay the loans. These eligibility requirements were hard to meet in low-income and low-rent neighborhoods, where property values were low and investments were considered high-risk. Similarly, owners of single-family homes who could not demonstrate an ability to repay loans were considered ineligible for SBA home-repair loans. Another important factor limiting the desirability of reconstruction loans in low-income neighbor-hoods and those with low home values was the discrepancy between the mortgage left on a prop-erty and the actual market value of the property at the time of the earthquake. A large number of both single-family and multifamily property owners found themselves in the unenviable position of having negative equity on their demolished property. As a result, wealthy and poor neighborhoods that sustained similar levels of damage did not receive similar shares of assistance and ultimately experienced different recovery outcomes. Recovery Challenges and Opportunities Federal, state, and local agencies showed a great deal of flexibility and innovation in their attempts to overcome the constraints posed by the design of residential relief programs and respond to the needs of renters. Cooperation among the various agencies and local institutions, both governmental and nongovernmental, played an important role in overcoming structural barriers to recovery in hard-hit and marginalized communities. Federal funds were reallocated across agencies, and sup-plementary appropriations were made available to provide additional resources for reconstructing multifamily residences. In general, housing developers were in a better position than individual property owners to take ad-vantage of reconstruction packages for multifamily properties because of the complex procedures and changes in eligibility requirements and incentives that these programs entailed. As such, con-solidated investments in real estate along with improvements and upgrades made to older buildings resulted in higher housing costs and a certain level of gentrification in some areas with concen-trated damage. Active, experienced, and energetic nonprofit housing corporations were also able to tap into such resources and in many cases address housing needs in their communities. Reconstruction programs were sometimes affected by the nature of the relationships among local public officials, program administrators, developers, and housing corporations. Where relationships were strong and knowledge of local institutional capacities was adequate, neighborhoods that had suffered significant damage were well positioned to take advantage of existing recovery programs. Policy Implications and Recommendations In many respects, Southern California has emerged from the Northridge earthquake stronger than before. Local and state agencies acquired new experience in dealing with large disasters. Newer

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homes replaced demolished ones, and many older structures were retrofitted. Population and hous-ing growth recovered, and growth rates now exceed predisaster levels. However, a severe housing shortage, low vacancy rates, and the surge in housing prices in recent years could undermine recov-ery efforts in the event of a new disaster of similar magnitude. Although these issues point to a broader housing problem in the region, they also have relevance for earthquake disaster policy. Housing is an essential element in the economic and social welfare of cities. Very low vacancy rates signal that the housing supply is operating at dangerously low levels, especially in areas susceptible to sudden and massive hazards. With this in mind, we offer the following recommendations.

► State and federal agencies should reexamine the basic assumptions behind postdisaster residential assistance to facilitate the flow of resources to where they are most needed.

The current approach is based primarily on losses rather than needs. State and federal agencies pro-viding residential assistance should take into account the combination of residential damage and applicants’ available resources, and ensure that priority in distributing assistance is given to areas where needs exceed local and individual resources.

► FEMA and the U.S. Department of Housing and Urban Development should develop a more integrated approach to federal assistance for multifamily structures.

The Northridge earthquake highlighted the challenges a disaster presents to a major metropolitan area in which a significant portion of the residents live in apartment buildings. In fact, the strong need for rapid rehabilitation of multifamily housing, coupled with political will, led FEMA to real-locate emergency appropriations to the U.S. Department of Housing and Urban Development. HUD funds were administered by local housing departments and were used to provide grants and additional loans for the reconstruction and acquisition of damaged multifamily properties. HUD programs were the most successful in targeting disadvantaged, low-income, and renter communi-ties and providing substantial reconstruction funding. Federal agencies such as FEMA and state agencies such as the Governor’s Office of Emergency Services (OES) should ensure that useful protocols applied during Northridge earthquake recovery, such as those between FEMA and HUD, are formalized into policies and approved procedures so they can be implemented in the event of a future disaster.

► The state should make a more concerted effort to support housing production and en-sure an adequate supply of affordable housing during normal times.

Market mechanisms alone are not guaranteed to replenish the multifamily housing stock in a timely fashion, especially during a slow or declining economy. Among the most needed mitigation strate-gies are more-aggressive housing-production strategies that would encourage developers to invest in the needed segments of the housing market. If a Northridge-like disaster were to hit Southern California today, the very low vacancy rates could have strong repercussions on the region’s eco-nomic and social stability.

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► State, county, and city agencies handling postdisaster emergency and recovery opera-

tions should forge and maintain strong ties with community-based organizations and nonprofit housing corporations.

This will facilitate the flow of information and resources during crises. City housing departments should play a pivotal role in connecting local needs to existing state and municipal housing pro-grams.

► The OES and the Department of Housing and Community Development and relevant city departments should establish memoranda of understanding (MOUs) for postdisas-ter housing reconstruction.

MOUs will facilitate rapid disbursement of funds and an understanding of reimbursement proc-esses. City housing departments should generate and maintain up-to-date databases of housing cor-porations willing to participate in postdisaster acquisition and reconstruction of damaged properties as well as of property owners willing to accept rental vouchers—akin to existing databases for de-bris removal and construction contractors. Similar MOUs should be established between city de-partments and participating housing corporations. This will not only improve communication and recovery in the aftermath of a disaster, but also strengthen the institutional infrastructure necessary for providing affordable housing in disadvantaged communities under normal conditions.

► The OES should take the initiative for maintaining a comprehensive database of disas-ter-related information.

Such a database would support more-detailed analyses of recovery outcomes, taking into account such factors as reconstruction time, demographics, and local economic activities. State agencies and local housing departments should develop standardized procedures for damage assessment that ensure uniformity and consistency. We recommend training of building inspectors and coordination across municipalities.

► Develop pilot projects, with academic assistance, to test postdisaster recovery ap-proaches.

State disaster-relief and housing agencies, institutions of higher education, and local government agencies should cooperate with local housing corporations and community-based organizations to create pilot projects in hazard-prone areas that suffer from housing shortages. Staff of these projects could provide technical assistance in assessing capacity, needs, and risks, in addition to developing postdisaster recovery plans to help communities access recovery and revitalization funds and strengthening interinstitutional linkages. In conclusion, disaster-relief policy should be integrated into a larger framework of housing policy. The extent of external assistance made available and the degree to which it fits local needs remain critical factors in defining postdisaster residential recovery outcomes. Accordingly, the level of co-operation among local, state, and federal agencies and organizations plays an important role in as-

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sessing and articulating of local needs and in improving access to and managing external resources, and thus in shaping recovery outcomes.

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INTRODUCTION Although the 6.7-magnitude Northridge earthquake of January 17, 1994, was not the “Big One” that many believe awaits California, it nevertheless caused widespread damage to the built envi-ronment. For several days after the earthquake, 9,000 homes and businesses were still without electricity, 20,000 were without gas, and more than 48,500 had little or no water. More than 20,000 structures were vacated and about 12,500 structures damaged, leaving tens of thousands of people temporarily homeless. Of the 66,546 buildings inspected, 6% were severely damaged (red-tagged) and 17% were moderately damaged (yellow-tagged). Ten years have passed since the earthquake hit Los Angeles. Twenty-five billion dollars was poured into rebuilding its damaged structures, and the city seems to have recovered. Yet no sys-tematic assessment of the recovery, or of the effectiveness of federal assistance programs imple-mented in the aftermath of the earthquake, has been attempted. This research addresses these is-sues, focusing in particular on the long-term recovery of residential structures. More specifically, we are interested in identifying and explaining variations in recovery patterns and in assessing the impact of federal assistance programs.

RESEARCH QUESTIONS AND METHODOLOGY Our research was guided primarily by the following questions:

► How do the housing and demographics of the Los Angeles region today compare to those preceding the Northridge earthquake? What is the current condition of properties dam-aged by the disaster?

► Did hard-hit areas suffer long-lasting housing or demographic effects from the earth-

quake?

► Were there variations in postdisaster recovery outcomes in different areas of the Los Angeles region and, if so, what was their cause?

► What role did federal assistance play in shaping postdisaster recovery outcomes? How

well did the various federal assistance programs meet residents’ postdisaster housing needs?

► Were demographic characteristics and/or indicators of social integration or isolation as-

sociated to a significant extent with the distribution of federal assistance? To address these questions, we relied on the following interrelated and complementary analyses:

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► A comparison of pre- and postdisaster conditions in Los Angeles County as a whole, as well as within individual zip codes affected by the earthquake.

This comparison drew data from the 1990 and 2000 censuses to identify changes in housing and demographic characteristics within zip codes as well as in the county overall. The study-area zip codes were classified in four quartiles (i.e., equal number of zip codes) based on the extent of damage reported. The two end quartiles, with the highest and lowest levels of damage, were compared to the overall study-area averages in terms of postdisaster recovery as measured by percentage changes in total population, housing units, number of occupied housing units (occupancy), and renter-occupied housing units. Similarly, the study-area zip codes were classified in four quartiles based on the ratio of federal assistance received to reported damage in each zip code. The two end quartiles were compared to the overall study-area averages in terms of preexisting conditions and postdisaster recovery out-comes.

► A review of six federal assistance programs implemented in the aftermath of the North-ridge earthquake to address residential reconstruction, including analysis of their objec-tives, eligibility requirements, and the funds made available under each program.

► A statistical analysis to test the effect of a number of social variables on the distribution

of assistance by zip code. The selected independent variables included the concentration of (1) minority populations, (2) linguistically isolated households,1 (3) low-income households (those with an average annual income of less than $25,000), and (4) noncitizen populations.

► Case studies of three areas that were hit hard by the earthquake: the city of Santa Monica, the Canoga Park district of Los Angeles, and the Crenshaw and West Adams district of Los Angeles.

In the case studies, we examined the forces shaping recovery outcomes, the actual effectiveness of the various reconstruction programs, and the extent of recovery in the three areas. A wind-shield survey (a visual assessment of surveyed properties) of all red-tagged properties was used to asses the extent and quality of residential recovery in these neighborhoods. The case studies also relied on in-depth semistructured interviews with community leaders, elected officials, and residents.

1 According to the 1990 census, a linguistically isolated household is one in which no person age 14 or over speaks only English, and no person age 14 or over who speaks a language other than English speaks English “very well.”

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RESIDENTIAL RECOVERY FOLLOWING THE NORTHRIDGE EARTHQUAKE The period that follows a disaster is classified into various phases according to the activities that take place at different times and the changing conditions of affected areas. From a residential perspective, the emergency phase is complete when no evacuations occur, immediate housing needs are met, shelter occupancies stabilize and start dropping, damage assessment is complete, and debris removal begins. The reconstruction phase is complete when damaged properties are rebuilt and recovery begins. The recovery phase is complete with the achievement of development and growth goals that have been missed because of the disaster. The achievement of these goals is measured by a wide range of indicators, such as occupancy, affordability, retention of local residents, number of residential units, structural improvements, extent of retrofitting, quality of life in areas with high damage, and so on. Therefore, a successful long-term recovery is not just a return to predisaster condi-tions, but has to recapture the developmental trajectory that was intercepted by the disaster. In the case of the Northridge earthquake, and in terms of population and housing units, long-term recovery means more than a return to the levels of January 1994. A successful recovery has to account for the projected growth in population and number of housing units that would have oc-curred had the earthquake not taken place. However, development projections are uncertain in many respects because external factors unre-lated to the disaster may intervene to shape the long-term development of a region. We will, of course, never know how the Los Angeles region would have developed had the Northridge earthquake not occurred. However, we can examine whether the region has experienced growth or decline in population, whether it has recaptured its housing stock, whether this stock has ex-panded beyond predisaster levels, whether different areas within the region have experienced different recovery outcomes, and how these outcomes relate to the design and implementation of residential assistance programs and to preexisting demographic or housing conditions. To assess overall recovery outcomes, we examined changes in population, number of housing units, and housing vacancies related to earthquake-inflicted damage and amount of assistance received. Between 1990 and 2000, the total population in the study area increased by over 600,000 people (6.3%), and over 80,000 housing units were added to the housing stock (Figures 1 and A-1). Vacancy rates dropped, and the number of vacant units decreased by 43,000 units. These figures indicate that at an aggregate level, the Los Angeles region has recovered from the Northridge earthquake and has regained its appeal to people looking for a residence as well as to investors. Two important factors have contributed to the residential recovery from the Northridge earth-quake. The massive and expedited flow of federal funds for reconstruction sustained the eco-nomic and social stability of the region by rapidly injecting capital into local businesses and fi-nancing housing reconstruction. Additionally, the spectacular economic rebound of the region that took place in the late 1990s fueled demand for and investment in real estate. In 1997, hous-

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ing construction and home sale prices started to recover from the bust that followed the real es-tate boom of the 1980s (Figures 1 and 2).

Figure 1 New Monthly Construction Permits for All Housing in Los Angeles County, 1988–2003

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Figure 2 Median Sale Price for All Housing Units in Los Angeles County, 1992–2001 (in 1994 Dollars)

$125,000

$150,000

$175,000

$200,000

$225,000

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Source: RAND California 2003.

Source: RAND California 2003.

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Without the recovery of the Southern California economy, the effects of the Northridge earth-quake would have been significantly more pronounced and longer lasting, and the duration of recovery more prolonged. Despite this economic growth, the average length of time for the com-pletion of repairs for red-tagged homes was 23 months. Similarly, the average permanent relocation time for renters whose residences were damaged was five months.2 These are much longer periods than might have been anticipated considering the amount of federal assistance that poured into the region. Aggregate assessment of recovery can mask variations in recovery outcomes in different areas of the region. In comparing average recovery outcomes for the study area as a whole with recovery outcomes for areas that sustained the most and the least damage, we found no indication of long-term housing and population effects directly associated with the extent of damage alone. Figure 3 shows that, when compared to the study area, areas that were hardest hit experienced similar or above-average growth in population, housing units, and occupancy—even more so than areas that experienced the least damage.

Figure 3 Recovery Outcomes for Damage Quartiles Relative to Study-Area Averages

3.9%

2.3%

2.0%

3.1%

1.1%

2.8%

1.8%1.9%

-0.1%

0.0% 0.1%

-0.5%

-1.0%

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1.0%

2.0%

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No Damage Lowest Damage Quartile Highest Damage Quartile

Population Change 2000-1990Housing Units Change 2000-1990Occupied Units Change 2000-1990Renter Occupied Change 2000-1990

Study Area Averages

2 According to our survey of 200 owners of red-tagged properties. We mailed 2,000 questionnaires and received 200 completed responses.

Sources: U.S. Bureau of the Census 1990, 2000: Summary Tape Files 3 (STF-3); and OES/EQE International 1995.

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Recovery, however, is a function of more than just the severity of damage. Access to federal as-sistance is another essential determinant of how well and how quickly an area may recover. Therefore, using an assistance-to-damage ratio, we examined the relationship among damage, assistance, and recovery outcomes. Many of the areas with proportionately low assistance-to-damage ratios were near the epicenter, such as parts of the San Fernando Valley, including Ca-noga Park, Northridge, and Reseda. Other hard-hit areas in Santa Monica and in the Crenshaw and West Adams district along Interstate 10 were also in the lowest quartile. On the other hand, areas with higher assistance-to-damage ratios were mostly on the urban periphery, such as sec-tions of Malibu, Calabasas, and Santa Clarita (Figure A-3). Areas defined by zip codes falling in the lowest assistance-to-damage quartile sustained about 70% of the damage and received 41% of the total assistance and a similar portion of insurance settlements; those defined by zip codes in the highest quartile sustained only 0.2% of the damage and received 5% and 3% of the total assistance and insurance settlements, respectively (Figures 4 and A-2).

Figure 4 Distribution of Damage, Assistance, and Insurance Losses in Assistance-to-Damage Quartiles

70%

0.2%

41%

5%

40%

3%

0%

20%

40%

60%

80%

Lowest Assistance-Damage Quartile Highest Assistance-Damage Quartile

% of Total Residential Damage % of Total Aid % of Total Insurance Losses of All Types

(not to scale)

The comparison of the two quartiles showed that recovery outcomes varied significantly depend-ing on the amount of assistance received relative to the damage reported. Between 1990 and 2000, areas belonging to the lowest assistance-to-damage quartile (i.e., receiving the least assis-tance relative to damage) experienced net losses in total population, total housing units, and total occupied units. The contrast was even more marked when these areas were compared to the areas that received the largest amounts of assistance relative to damage (i.e., belonging to the highest assistance-to-damage quartileFigure 5).

Sources: OES database 1997; OES/EQE International 1995; Comerio et al. 1996.

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Figure 5 Recovery Outcomes for Highest and Lowest Assistance-to-Damage Quartiles

Relative to Study-Area Averages

-7.6%

2.2%

-5.3%

0.8%

-5.6%

0.8%

-2.7%

0.7%

-10.0%

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2.5%

Lowest Quartile Highest Quartile

Population Change 2000-1990 Housing Units Change 2000-1990

Occupancy Change 2000-1990 Renter Occupied Change 2000-1990

Study Area Averages

The two highest and lowest assistance-to-damage quartiles also varied considerably in terms of their preexisting demographic and housing characteristics. Compared to zip codes for the highest quartile, zip codes for the lowest quartile had higher percentages of individuals of Hispanic ori-gin, noncitizens, low-income households, and linguistically isolated Spanish-speaking house-holds. These zip codes also had higher-than-average percentages of multifamily units and renter-occupied units (Figure 6). This comparison suggests that areas with higher concentrations of such housing and demographic characteristics had more-limited access to federal assistance than other areas, and that recovery outcomes in such areas were less favorable than those in the rest of the study area. We also examined more closely the extent and quality of reconstruction in three hard-hit areas: the city of Santa Monica, the Canoga Park district of Los Angeles, and the Crenshaw and West Adams district of Los Angeles. Our survey of 270 red-tagged residential properties in these three areas showed that 10% of the sites have not been rebuilt and remain vacant lots. In 6% of the surveyed properties, repairs were incomplete (Tables A-1 to A-3). These outcomes were not uni-formly distributed across the three areas or within each area, thus indicating different recovery patterns. These findings are consistent with previous research on disasters. Many studies suggest that, in the aftermath of a disaster, socially marginalized groups (such as low-income populations, mi-norities, women, and the elderly) tend to incur higher losses, experience less-favorable recovery

Sources: U.S. Bureau of the Census 1990, 2000: Summary Tape Files 3 (STF-3); and OES/EQE International 1995.

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outcomes than the rest of society, and end up worse off than they were prior to the disaster.3 Studies that examine the problem of uneven recovery outcomes in the United States have ex-plained such disparities as the result of the higher vulnerability of particular social groups, rea-soning that their preexisting conditions increase their exposure to risk. This condition of vulner-ability is defined in terms of what these social groups lack, such as sufficient education, personal financial assets, adequate land-use choices, proper housing construction, political influence, and so on. These groups are then more likely to incur higher losses, have limited access to financial institutions and decision-makers, and face higher obstacles to recovery.

Figure 6 Housing and Demographic Characteristics of Highest and Lowest Assistance-to-Damage

Quartiles in Comparison to Study-Area Averages

3%

4%

-3%

2%

-3%

3%

-2%

2%

-1%

2%

1%

-5%-5.0%

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5.0%

Lowest Assistance-Damage Quartile Highest Assistance-Damage QuartileMultifamily Units Renter OccupiedPersons of Hispanic Origin Persons Not CitizenHouseholds Ling. Isol. (Spanish) Households Income < 25K

Study-Area Averages

Another explanation offered for uneven recovery outcomes is biased or discriminatory practices in the allocation of assistance, especially in the case of minority populations. Our study however, found no evidence of discriminatory practices in disaster assistance centers or in implementing any recovery efforts. Damage alone did not explain variations in recovery outcomes. This being

3 For some of these findings regarding postdisaster recovery in the United States, see Hurricane Andrew: Ethnicity, Gender, and the Sociology of Disasters, edited by Peacock, Morrow, and Galdwin (1997). For an in-depth analysis of the recovery of four communities on the periphery of the Los Angeles region (Fillmore, Piru, Simi Valley, and Santa Clarita) following the Northridge earthquake, see The Northridge Earthquake: Vulnerability and Disaster by Bolin and Stanford (1998). These other researchers agree that lower-income and minority groups face higher con-straints in their struggle for recovery. For a more general conceptualization of social marginalization during disas-ters, see Hewitt, “Excluded Perspectives in the Social Construction of Disasters,” in What Is a Disaster? Perspec-tives on the Question, edited by E. L. Quarantelli (1998).

Sources: U.S. Bureau of the Census 1990; OES database 1997; OES/EQE International 1995; and Comerio et al. 1996.

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the case, how did particular social groups become vulnerable? Did federal assistance programs, and the way they were designed, play a role in sustaining or exacerbating such disparities? In the case of the Northridge earthquake, two critical factors influenced local recovery patterns. First, access to federal assistance for residential recovery played an important role in shaping postdisaster recovery outcomes. Second, the type and extent of local governmental and nongov-ernmental organizations available to assist residents, provide for unmet needs, and recapture lost housing units, especially for low-income families, affected the way that recovery unfolded in dif-ferent places. In the following sections, we discuss the effectiveness and equity of postdisaster federal programs as applied in Los Angeles County, and explore the role of local initiatives in facilitating long-term recovery.

PERFORMANCE OF FEDERAL RESIDENTIAL RECONSTRUCTION AND RECOVERY PROGRAMS

This section provides an overview and analysis of the various federal assistance programs for residential reconstruction that were available to Los Angeles residents after the Northridge earth-quake.4 The objective was to determine whether the structure of existing federal programs hin-dered assistance to areas with high concentrations of renters, minorities, and low-income popula-tions. We provide an overview of the major federal programs for residential assistance in place at the time of the Northridge earthquake, and discuss the implementation of residential programs and the implications for postdisaster housing needs. The Structure of Federal Assistance for Residential Recovery In 1994, about 60% of residential units in the affected areas lacked adequate earthquake insur-ance coverage.5 Therefore, federal assistance played a major role in residential recovery. Six fed-eral programs provided the bulk of the assistance: Small Business Administration (SBA) home-owner, personal property, and business loans; Federal Emergency Management Agency (FEMA) individual and family grants (IFGs) and minimum home repair (MHR) grants; and HUD pro-grams, which included grants, loans, and Section 8 vouchers. The major source of federal funds for residential reconstruction was the SBA. It provided three types of assistance loans that, combined, represented about 64% of total federal assistance (Fig-ure A-4). These loans were designed primarily to cover uninsured losses for businesses, home-owners, and personal property up to $1.5 million, $200,000, and $40,000, respectively. Multi-family housing properties were considered businesses, and their owners were eligible for SBA business loans. Of the 260,000 SBA loan applications, 121,000 were approved; of the $3.3 bil-lion in approved SBA loans, 66.6% were issued to cover homeowners, 4.4% to cover personal property, and 29% to cover business losses.6

4 Also see Table A-4 for a description of each major residential assistance program. 5 State of California Department of Insurance, 1996; Comerio et al., 1996. 6 Comerio et al., 1996; Bolin and Stanford, 1998; OES database, 1997.

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Another important source of federal residential and individual assistance was FEMA. The agency offered two programs designed to provide smaller grants for immediate rehabilitation and assistance relatively quickly and with limited eligibility and inspection requirements. Minimum home repair (MHR) grants offered up to $10,000 for the repair of damaged owner-occupied properties. The average amount disbursed was $2,900. FEMA used a fast-track assistance system to send checks of $2,350 with minimal or no inspections to applicants in areas with high ground acceleration and near the epicenter. FEMA also offered the individual and family grant (IFG) program, which provided up to $12,200 for the replacement and repair of real estate and personal property, though in the case of the Northridge earthquake the average grant was less than $1,000. Over 280,000 people applied to FEMA for MHR grants and 660,000 people for IFGs, and the total amounts for these two grants distributed in the study area were $787 and $256 million, re-spectively.7 In our interviews, FEMA officials and program managers stressed that FEMA was committed to reaching as diverse a population as possible. Publications were translated into several languages, and though the application process was mostly in English, FEMA made a serious effort to have translators and multilingual assistants at the application centers. HUD grants and loans were important complements to existing assistance programs, especially for homeowners and renters of damaged properties with unmet needs who were ineligible for SBA loans. HUD initially provided $200 million in emergency Section 8 vouchers for low-income renters of damaged properties.8 An additional $200 million was made available for HUD’s Home Investment Partnership Program (HOME) and Community Development Block Grant (CDBG) programs. These loans were given through municipalities’ housing departments to rehabilitate affected areas, especially damaged affordable multifamily units. In April 1994, Congress approved another $100 million for HOME and CDBG assistance. Though less in total amounts than FEMA or SBA assistance, HUD vouchers, grants, and loans provided much-needed assistance to owners of multifamily buildings and to low-income renters. In the city of Los Angeles, as of the third quarter of 1995, HUD assistance averaged over $51,000 per grant or loan, for a total of over $180 million.9 In addition to the funds from these six programs, federal funds were made available to address housing needs of tenants of damaged units. The Temporary Housing Assistance Program pro-vided tenants of uninhabitable residential units with assistance to cover two months of rent and provided owners with assistance to cover three months of rent. The amounts approved under this provision exceeded $380 million for almost 120,000 applicants. Though this program repre-sented an important source of funding, it could not be used for repairs, improvements, or re-placement of damaged belongings and therefore was excluded from our analysis of residential reconstruction. Although checks for temporary housing provided needed relief, it appeared from our interviews that the large majority of lower-income renters opted for the HUD vouchers be-cause these vouchers provided longer relief and could result in permanent leases below market rates.

7 OES database, 1997. 8 Emergency Section 8 vouchers provided subsidized rental assistance for low-income tenants who had been dis-placed as a result of the earthquake. Comerio et al., 1996; interview with HUD representative. 9 State of California Senate Select Committee on the Northridge Earthquake, 1996.

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Program Implementation and Implications of Eligibility Requirements Federal programs implemented in the aftermath of the Northridge earthquake covered a wide ar-ray of housing needs. As discussed earlier, a number of conditions determined applicants’ eligi-bility for the various types of assistance. Three main conditions directly affected access to fed-eral assistance: tenure, income, and immigration status. Of the six programs analyzed, SBA homeowner loans and FEMA MHR grants were designed exclusively for owner-occupied homes and represented, respectively, 43% and 16% of reported federal assistance. FEMA IFGs and SBA personal property loans were made available to both owners and renters and represented 4% and 3% of the assistance. SBA business loans constituted 18% of federal assistance and were available to owners of all commercial enterprises, including owners of multifamily homes. HUD grants, loans, and Section 8 vouchers were geared exclu-sively toward owners of multifamily properties and renters and represented 12% and 4% of the total federal residential assistance. It is clear from the allocation of federal funds that the largest portion of assistance was directed to owners of single-family homes (59%), and a much smaller portion (16%) was earmarked for owners and renters of multifamily housing. This was partly because damage to multifamily struc-tures was underreported due to inadequate inspection, and because more-limited assistance op-tions were available for the rehabilitation of multifamily properties.10 One of the reasons often cited for the inadequate inspection of these properties was that out-of-state inspectors brought in to assist in the assessment process had limited experience with seismic damage, especially to multistory structures. More important, however, a number of apartment buildings had absentee landlords or were managed by agencies with limited staff. This and the more complex bureau-cratic procedures associated with multifamily assistance resulted in delays in assistance applica-tion and processing. These factors, along with the absence of an expedited venue for multifamily reconstruction assistance, left owners of many multifamily structures with limited or no recon-struction assistance. Income levels and credit history determined eligibility for SBA loans, which were the major source of federal residential assistance. Multifamily owners applying for business loans to reha-bilitate their properties had to demonstrate the profitability of such investments as business ven-tures and the ability to generate sufficient cash flow from their units’ rents to repay the loans. These eligibility requirements were hard to meet in low-income and low-rent neighborhoods, where property values were low and investments were considered high-risk. Similarly, owners of single-family homes who had limited financial resources and could not demonstrate their ability to repay the loans were considered ineligible for SBA home repair loans. Another important factor limiting the desirability of reconstruction loans in low-income neighborhoods and neighborhoods with low home values was the discrepancy between the mort-gage left on a property and the actual market value of the property at the time of the earthquake. In fact, a large number of both single-family and multifamily property owners had bought their properties during the real estate boom of the 1980s. At the time of the Northridge earthquake, the real estate market had dropped significantly, and owners found themselves in the unenviable po-sition of having negative equity on a demolished structure. As one resident explained in a per- 10 Comerio, 1998; Bolin and Stanford, 1998.

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sonal interview: “It made no sense to borrow more money to fix a property that is now upside-down [in equity]. . . . It was easier to walk away and find a new home somewhere else.” Federal assistance of all types was not accessible to undocumented immigrants. In February 1994, within weeks of the earthquake, Congress passed an emergency financial aid package that had been modified to bar aid to anyone if it was “known to the federal entity or official to which funds are made available that the individual is not lawfully within the United States.”11 While our interviews with managers and staff of federal relief programs indicated that few additional controls related to immigration status were implemented as the result of the bill amendment, many immigrants, whether documented or not, did not feel at ease applying for assistance. Personal interviews with residents and community organizers indicated that even before the con-troversy surrounding immigrant eligibility for disaster assistance, rumors had circulated in immi-grant communities that the Immigration and Naturalization Service would track down immi-grants applying for assistance. The bill, coupled with statements by elected city council members in support of excluding undocumented immigrants from disaster assistance, further reduced im-migrants’ expectations and increased their reluctance to apply for assistance. However, evidence from personal interviews and review of evaluative reports indicates that pub-lic agencies involved in response and recovery efforts showed significant flexibility in the ad-ministration and implementation of their programs, adopted the least-stringent eligibility criteria when possible, significantly reduced bureaucratic procedures, and attempted to reach a diverse population.12 In personal interviews, FEMA officials and program managers stressed FEMA’s commitment to reaching as diverse a population as possible under existing guidelines. Publica-tions were translated into several languages, and though the application process was mostly in English, a serious effort was made to have translators and multilingual assistants at application centers. These assistants were hired by FEMA/OES or were volunteers operating in cooperation with local community organizations. Our interviews with local community organizations and residents confirmed the high levels of cooperation that existed in the field among all parties in-volved. Despite this show of solidarity and flexibility, the structure of federal assistance for residential reconstruction and recovery established clear and strict priorities regarding which residential losses deserved compensation and which housing needs justified federal spending. The analysis of the structure of federal assistance shows that, in the case of the Northridge earthquake, the de-sign of federal programs for residential recovery ranked the needs of upper-middle-class single-family homeowners over the housing needs of renter, low-income, and immigrant populations. The housing needs of the latter were relegated to market forces that would be responsible for re-plenishing the housing stock. These needs were considered a lower priority in the overall recov-ery scheme than other needs and, in the case of undocumented immigrants, a nuisance and a bur-

11 Los Angeles Times, February 2, 1994. 12 The Los Angeles Times, July 1995, published a poll of residential satisfaction with assistance. FEMA also in-cluded a survey along with its application form. Both polls suggest an overall high level of satisfaction. However, the results of these polls are summarized at an aggregate level and provide little insight into whether satisfaction levels varied in different places.

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den on the larger society. Thus, social groups that were politically, economically, and socially marginalized prior to the disaster found themselves further marginalized in its aftermath. Overall, postdisaster recovery policies and programs were not designed as means of rehabilita-tion, but rather as enabling instruments providing a temporary foundation for the full recovery of residential properties. Market forces, channeled through insurance, real estate investments, and risk assessment, were (and continue to be) California’s preferred modes of regulation for manag-ing housing needs in hazard-prone areas. In fact, the current approach to the allocation of post-disaster residential assistance is based on losses and not on need. Therefore, a home built with more expensive materials is likely to incur higher losses and receive more federal assistance in loans and grants than a more modest home, irrespective of the actual need of each owner or ten-ant. Relief programs were not designed as welfare strategies (i.e., with priorities set by absolute need) or as a means of social redistribution (i.e., with resources allocated to mitigate preexisting mate-rial and social inequalities). Interviews with program managers and public officials also revealed that a more welfare-based approach to disaster recovery policy, with broader state intervention and more centralized planning, was deemed too costly over the long term, was politically un-popular, and might have resulted in less flexibility and more delays than the approach used. It is worth noting that, in the case of the Northridge earthquake, restrictions on allocating funds for underserved communities were sometimes relaxed. For example, HUD worked closely with mu-nicipal agencies to design flexible programs for the rehabilitation and restocking of affordable housing in affected communities and the funding of community redevelopment programs. These efforts, however, were more the result of political pressure, exercised by local politicians and by politicians in Washington, than the result of preestablished postdisaster procedures for address-ing residential needs. Indeed, the actual implementation of programs, the appropriation of supplemental funds, and the prioritization of fund allocation were sometimes embedded in processes of political maneuver-ing. Furthermore, at the local level, no clear guidelines existed for organizing federal and local operations on an extended basis; for determining assistance to local housing departments; for prioritizing allocation of funds to the various disaster recovery programs; or for designating areas eligible for rehabilitation and community fundsthereby creating the ghost towns [so-called be-cause of their blight].13 These were, by and large, ad hoc decision-making processes, and their outcomes were contingent upon how well the various city officials were able to plead their indi-vidual cases, the relative political importance of one area versus another, and preexisting inter-agency relations.14 13 There is not a clear definition of what constitutes a “ghost town.” The label was used to describe a concentration of red- and yellow-tagged multifamily structures within one or more adjacent city blocks. A Ghost Town Task Force was established in the weeks following the Northridge earthquake and channeled funds and streamlined building permits in 17 designated ghost towns in Los Angeles. 14 These findings are corroborated by various interviews with community representatives and public officials as well as by the Los Angeles Times, July 17, 1994, and August 19, 1994. See also the Urban Institute report prepared by Galster and others on housing disaster assistance and the effectiveness and implementation of postdisaster plans (1995).

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VARIABLES AFFECTING THE DISTRIBUTION OF FEDERAL FUNDS We analyzed the distribution of federal assistance funds using six sets of regression models to determine the variables that were significant determinants of the distribution. As predicted, dam-age was consistently a significant determinant of the allocation of assistance as well as of settled insurance claims. Zip-code areas with higher shares of total damage received higher shares of total funds. However, certain sociodemographic characteristics of zip codes were also significant determinants of the distribution of assistance. Controlling for damage, the most notable variable was the percentage of the population that was Hispanic. The regression models showed that the higher the concentration of Hispanics, the less the share of total assistance, the less the share of total settled insurance claims, and the less the share of total SBA homeowner loans. This was not the case for other races or ethnicities. In fact, higher concentrations of African Americans were significantly and positively associated with higher shares of FEMA grants and SBA personal property loans and with lower shares of insurance set-tlements. The concentration of Asians was negatively and significantly associated only with the share of FEMA MHR grants. Ethnicity was not a significant variable for SBA business loans or for HUD grants and loans. Linguistic isolation was also a key variable associated with assistance. The higher the concentra-tion of linguistically isolated Spanish-speaking households, the lower the share of total assis-tance, the lower the share of total insurance settlements, and the lower the share of total SBA homeowner loans. On the other hand, the concentration of linguistically isolated Spanish-speaking households was significantly and positively associated with the share of both FEMA IFGs and HUD grants and loans. Finally, concentrations of low-income households and nonciti-zens were negatively and significantly associated with total assistance and FEMA MHR grants. These variables, however, were positively and significantly associated with FEMA IFGs and HUD grants and loans. The statistical analyses showed that the various recovery programs, whether exclusively for homeowner repairs or for individual assistance, successfully reached their targeted public with a good degree of complementarity. HUD grants and loans, SBA business loans, and FEMA IFG monies were available in places where SBA homeowner loans or FEMA MHR grants were less available. Our research also showed that federal agencies made serious efforts to reach out to minorities and disadvantaged groups. In fact, despite the negative association between total assis-tance funds and social isolation indicators, targeted grantssuch as FEMA IFG and, especially, HUD programsshowed a positive relationship with some indicators of social isolation. These programs consistently targeted areas with high concentrations of marginalized and lower-income groups. Nonetheless, the structure of assistance programs was such that major sources of funding (private insurance, SBA homeowner loans, and FEMA MHR grants) did not reach zip codes with advan-taged and disadvantaged populations equally. Controlling for damage, the share of total federal assistance to a zip code was inversely related to the percentage of marginalized populations. While it is obvious that more marginalized areas have lower homeownership rates and fewer

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households eligible for loans, the overall uneven distribution of assistance is indicative of a deeper structural problem with existing approaches to postdisaster residential recovery in highly urbanized areas with diverse populations. In the following sections we examine the extent to which access to federal assistance shaped recovery outcomes and the effectiveness of strategies implemented locally.

PATHWAYS TO RECOVERY: CASE-STUDY ANALYSIS OF THREE AREAS

The case-study analysis is intended to (1) trace the paths that different communities followed to recover from the Northridge earthquake; (2) assess the actual level and quality of recovery; (3) examine the effectiveness of the various reconstruction programs; and (4) gain insight into the relationship among the characteristics of communities, local institutional responses, and re-covery outcomes. To do that, we selected three areas in different parts of the Los Angeles region that sustained similarly high levels of damage: the City of Santa Monica, the Canoga Park dis-trict of Los Angeles, and the Crenshaw and West Adams district of Los Angeles. We chose these three areas with the goal of examining affected communities with different sociodemographic characteristics. Santa Monica The Northridge earthquake caused extensive damage in Santa Monica. OES reported damage to over 1,600 housing units, with an estimated cost of almost $70 million. The emergency shelter set up at Santa Monica College immediately after the earthquake temporarily housed 766 peo-ple.15 As news of the extent of the damage started to come in, city officials became aware that local resources could not meet inspection needs, and additional inspectors were brought in from neighboring cities and counties to assist with damage estimates.16 To respond to the damage, the city and its residents relied on a number of sources. FEMA issued grants for over $17 million, and SBA provided over $42 million in subsidized loans. The exten-sive damage to multifamily units raised concerns among city officials regarding the loss of af-fordable housing. Therefore, the city sought additional funding under the Emergency Supple-mental Appropriations Act of 1994 to complement recovery resources. Under this new program, HUD granted a number of statutory and regulatory waivers to expedite earthquake repairs. The city of Santa Monica secured $33 million in federal housing aid to assist in the restoration of earthquake-damaged residential units, $8.3 million in HOME funds, and $25 million in CDBG Emergency Supplement Funds. These funds were pooled to create the Multifamily Earthquake Repair Loan Program (MERL) to help with the recovery of the multifamily housing stock.17 However, these amounts were greatly below the cost of damage to multifamily residential build-ings. Furthermore, SBA loans appeared inadequate for multifamily rehabilitation, as not every

15 City of Santa Monica Earthquake Recovery Project, 1994. 16 Interview with City of Santa Monica Planning and Community Development official. 17 City of Santa Monica, 1999a. City of Santa Monica, 1996.

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owner could qualify. Due to statutory limitations, SBA loans could not exceed $1.5 million, thereby posing a serious obstacle to the reconstruction of damaged apartment buildings.18 The city then created the Earthquake Recovery Redevelopment District to assist in funding public improvements and to provide financial assistance to property owners for residential rehabilita-tion. The project area included approximately 90% of all red-tagged and 80% of all yellow-tagged buildings in the city. The Earthquake Recovery Redevelopment Project Agency (ERRPA) reported an estimated 1,914 damaged buildings and property damage of approximately $188 mil-lion.19 ERRPA intended to leverage its tax increment revenue by issuing a series of tax-allocation bonds up to the maximum capacity that the Earthquake Recovery Redevelopment Plan allowed. How-ever, the redevelopment project did not generate tax-increment revenues (i.e., increases in tax revenues) for its first two years.20 Limited resources and tax revenues that fell short of expecta-tions in the first years made this project a long-term strategy for addressing housing issues in Santa Monica rather than an effective tool for dealing with more immediate needs arising from the earthquake. Nevertheless, many city officials today believe that the creation of the Earth-quake Redevelopment Area was ultimately advantageous for Santa Monica and its residents. Immediately after the earthquake, assessed property values were depreciated because of the con-centration of damaged buildings and the overall slow economy of the region. Eventually, and as conditions returned to normal, the increase in property taxes was used to help recoup affordable-housing losses. The city was also able to use the Earthquake Redevelopment Project to secure funding for capital improvement projects and for other damaged civic buildings. To address unmet needs of multifamily owners and protect the affordability of rental units, Santa Monica sought HUD funds to complement existing CDBG and HOME resources. The result was MERL, which targeted multifamily rental and condominium properties with proof of earthquake damage exceeding $5,000 and located within the city of Santa Monica. As of November 2001, MERL had lent $29.5 million in CDBG and HOME funds for the construction or rehabilitation of 42 projects (590 units). Under MERL, 192 units have become affordable to households with incomes at or below 60% of the median. However, MERL was the lender of last resort for own-ers not eligible for other recovery assistance programs such as SBA loans. Because of the rela-tively more complex administrative process and the low-income provisions attached to MERL loans, the main beneficiaries of the funds were nonprofit organizations such as community de-velopment corporations.21 Because MERL loans had strings attached in the form of required numbers of low-income rental units, and because they had to be paid back, many property owners preferred to seek other ven-ues. In response to owners’ needs, the Rent Control Board of Santa Monica established the Q-Petition. The major purpose of this regulation was to encourage owners to repair their properties quickly and minimize the loss of rental housing units and displacement of tenants. Q-petitions

18 City of Santa Monica (1994) and interviews with a nonprofit housing corporation and developers in Santa Monica. 19 City of Santa Monica, 1994. 20 City of Santa Monica, 1999b, p. 5. 21 Interview with a nonprofit housing corporation in Santa Monica.

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allowed owners to pass on the cost of repairing earthquake-related damage to tenants as rent in-creases. Owners could apply for rent increases for completed repairs and for advance authoriza-tion for proposed repairs. Once the repairs were actually completed, owners could file a request for addendum to implement the proposed increases.22 By the filing deadline of June 30, 1995, 1,042 petitions had been filed. Through June 30, 1997, 1,017 decisions were issued for both completed and proposed repairs. The total cost of approved repairs through that date was $30.6 million and involved 9,738 units.23 Thus, the Northridge earthquake severely affected Santa Monica renters, especially renters of affordable housing units. At the time of the earthquake, 11,220 out of 28,657 rent-controlled units (39%) were affordable to very low-income households (less than 50% of the median in-come). By June 30, 1997, this number had declined to 8,820 (30.8%). The Threshold Rent Pro-gram, inaugurated in 1992, had allowed rent increases on voluntarily vacated low-rent units. The impact of the program was magnified because many of the vacancies that enabled owners to ap-ply for threshold increases were triggered by the earthquake, a factor that did not exist in the first two years of the threshold program. More than 500 threshold rent increases were granted after the earthquake. In some cases, a property was red- or yellow-tagged, and tenants had to move out until the building was safe. By the time the building was repaired, many tenants had moved to different residences and did not wish to return. Some tenants were forced to move out of their residences because the cost of repairs had a significant impact on their rent increases.24 Even though the city of Santa Monica added some affordable units to its housing stock, the rate at which units were undergoing decontrol was significantly faster, and a net loss has been re-ported every year since the Northridge earthquake (last year with available data is 2002). Al-though not all losses have been directly related to the earthquake, in 1994–1995, 75% of all de-controlled units were the result of earthquake removals (i.e., 75% of decontrols were due to earthquake-related damage and/or evictions). Today, imprints of the disaster still remain on the city’s landscape. Of the 62 red-tagged sites surveyed, eight were still vacant, and 11 had fenced-in areas or debris. Seven properties were partially demolished or were boarded, and 17 properties had visible cracks or incomplete repairs. The assessment of the quality of reconstruction showed that 23 properties (37%) were better than surrounding properties on the same street, and that only 5 (8%) were worse (Table A-2). Consistent with findings from our previous statistical analyses, variations in access to federal as-sistance were also noticed among Santa Monica census tracts. For example, zip code 90403, al-though sustaining the greatest damage, was second in federal assistance received, behind the more-affluent North of Montana neighborhood. One of the poorest neighborhoods—denoted by zip code 90404—had the lowest score in terms of actual recovery. In fact, half of the sites that remained vacant were in this zip code, which also showed the lowest level of recovery quality. The uneven effects of the Northridge earthquake were not a function just of tenure and home-ownership. Variations in recovery outcomes coincided with demographic differences in Santa Monica. Zip code 90404, which had a higher percentage of low-income, minority, and linguisti-

22 City of Santa Monica, 1995. 23 City of Santa Monica, 1997. 24 Ibid.

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cally isolated households, was next to last in terms of federal assistance, after the downtown area (which sustained virtually no residential damage), and had the least satisfactory rate of recovery among all Santa Monica zip codes (Table A-2). In conclusion, the city of Santa Monica showed a great deal of innovation in complementing fed-eral funds with local programs to respond to the challenges of earthquake recovery. As discussed earlier, some of the policies instrumental in repairing the damaged building stock also had unin-tended consequences (e.g., decreased number of affordable housing units) and put disproportion-ate numbers of some vulnerable groups at a disadvantage. At the same time, this analysis showed the importance of preexisting formal and informal institutional linkages, such as those among city agencies, developers, and nonprofit organizations, in creating and taking advantage of op-portunities to complement and counterbalance external (legislative and market) changes and pressures. Canoga Park District Because of its proximity to the earthquake epicenter, Canoga Park was hit hard by the earth-quake. Residential damage in the three zip codes that compose Canoga Park totaled $71 million and affected 3,807 units. The areas with the highest damage were those with high concentrations of multifamily structures housing low-income, renter, and predominantly Hispanic communities. In May 1994, the mayor of Los Angeles designated six blocks in Canoga Park as the Alabama-Saticoy Ghost Town. Damaged and vacated properties were fenced, and the Los Angeles Police Department and private security personnel patrolled the area to prevent unauthorized use of properties. In June 1994, the Los Angeles City Council adopted a resolution that expedited the establishment of redevelopment projects in such particularly blighted areas. The Community Redevelopment Agency (CRA) was authorized to increase the limit of its loans from $250,000 to $525,000 for earthquake recovery programs and to expedite approval of recov-ery loans. The Reseda–Canoga Park CRA Earthquake Recovery Project, consisting of 2,500 acres with high damage, was created in December 1994.25 The project, however, was plagued by conflicts between the white middle-class business owners and the low-income, mostly minority residents.26 For business owners, the CRA project meant an opportunity for a facelift of the commercial area. Residents wanted the project to facilitate rehabilitation of residential properties and provide opportunities for nonprofit local organizations and community development corpo-rations to intervene and address local housing needs.27 With few exceptions, however, local or-ganizations lacked the institutional and technical capabilities needed to take advantage of the CRA program and provide housing. In November 1994, a report prepared for the City of Los Angeles CRA showed that Council District 3 had the second-largest unfunded gap for resi-dential reconstruction, ranging between $37 and $118 million, depending on the calculation method.28 Citywide, reconstruction of damaged homes was complete for almost 25% of the 25 The Reseda-Canoga Park CRA included three ghost towns: Alabama-Saticoy, Victory-Tampa, and South Reseda. 26 Interviews with CRA representative, local developers, community organizers, and residents in Canoga Park. 27 Community Development Corporations (CDCs) are typically locally-based nonprofit organizations. The majority of these organizations deal with affordable housing needs, social and health services, and local economic develop-ment issues. 28 The lower estimate for the unfunded gap is based on $20,000 per damaged and unfunded residential unit. The higher estimate is based on unfunded SBA loans minus 15% of noncredit-related rejections. Council District 12,

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earthquake-related building permits issued, but in Canoga Park the estimated percentage was around 15 to 18%.29 The slow pace of recovery led the Los Angeles Housing Department to make a second type of very low-interest (0 to 3%) HUD loan available to those who wanted to acquire damaged proper-ties (red- or yellow-tagged).30 These loans encouraged a number of investors and developers in Canoga Park to acquire damaged properties and rehabilitate them. Not until the late 1990s, how-ever, with the start of an economic upswing and a booming real estate market in Southern Cali-fornia, did the reconstruction and recovery pick up pace in Canoga Park. Today, the imprint of the earthquake in the area is not immediately apparent, thanks in part to the federal funds that have poured in. FEMA issued checks for $42 million in grants, HUD for $12 million in grants and loans, and SBA for $102 million, for a total of $156 million in residential and individual as-sistance. Our windshield survey of 51 red-tagged properties in Canoga Park showed that all but three were rebuilt. Four sites had fenced-in debris and construction materials, and 10 sites had visible cracks or needed repairs. Only one single-family structure had boarded windows. Properties were also scored based on an evaluation of the site, extent of reconstruction, and comparisons to surround-ing properties. Most surveyed properties (76%) were of similar quality to the surrounding build-ings, with six of lower and six of higher quality. In the assessment of the reconstruction of red-tagged properties in the three zip codes, zip code 91303 scored the highest, with its reconstructed buildings displaying overall better quality than the surrounding properties. Zip code 91306 scored last among the three zip codes, and zip code 91304 scored first in terms of site maintenance (Table A-1). This scoring is particularly interest-ing, since zip code 91303 had the lowest median income (25% below the rest of Canoga Park) and twice the percentage of Hispanics and linguistically isolated Spanish-speaking households. This zip code also received the lowest share of federal assistance and had the lowest number of settled insurance claims, thus confirming the findings from the statistical analyses. By every in-dicator, zip code 91303 faced the highest obstacles for a successful recovery.31 At an institutional level, Canoga Park emerged with a much tighter local organizational network than it had before the earthquake. In 1994, Canoga Park had a number of community and faith-based local institutions, but interorganizational exchange of information and resources was lim-ited due to the relative youth of some of these organizations. The Northridge earthquake demon-strated the need for deeper linkages, and these were formed both among local institutions (in-cluding the city council office) and with external institutions such as several city and county de-partments. which includes Northridge, is first, with $64 million and $200 million for each estimate (Keyser Marston Associates 1994). 29 Interviews with local developers and community leaders in Canoga Park. 30 Interview with HUD representative. 31 While these findings do not address the question of whether the turnover rate in property ownership or displace-ment of tenants has been higher than average, there are no indications that this is the case. In fact, the 2000 census showed that zip code 91303 sustained increases in total number of housing units and rental units and had the highest population increase and the largest drop in vacancy rates in Canoga Park.

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This need also prompted local organizations to participate in the Project Rebound initiative that was led by Cal State Northridge, El Centro de Amistad, West Valley Mental Health Center, and other local organizations. The main goal of this project was to identify local institutional capaci-ties for addressing a wide range of postdisaster needs, build horizontal linkages and channels of communication, and document valuable institutional resources for use in both disaster and non-disaster circumstances. Other local organizations, such as the West Valley Community Devel-opment Corporation and New Economics for Women, were able to galvanize support and tap into recovery funds to address some local needs, including housing, construction of a community center, and improved facilities for social, legal, and mental services. The relative success of recovery in zip code 91303, despite the lower level of federal assistance, can be partly attributed to these active formal and informal organizational ties, which helped maintain the integrity of the community, supported affordable housing, and provided the needed network of social support. Thus, a place that faced significant obstacles of relatively low income levels, high vacancy rates, low property values, and high levels of linguistically isolated house-holds emerged from the Northridge earthquake relatively better than other parts of Canoga Park that had a weaker and more fragmented institutional network. Crenshaw and West Adams District Located southeast of downtown Los Angeles, the Crenshaw and West Adams districts also wit-nessed significant damage to their building stock as a result of the Northridge earthquake, with 3,929 residential units damaged at an estimated cost of $46.2 million. Single-family homes con-stituted 63% of the total number of damaged units and 56% of the estimated dollar amount. Most of the damage was concentrated in zip code 90016. Over 35,000 applications for FEMA grants were filed from the three zip codes that contain the Crenshaw and West Adams neighborhoods. As in other parts of Los Angeles with a high concentration of red-tagged buildings and a slow pace of reconstruction, many residentsand especially rentersabandoned their properties and moved to other neighborhoods. The result was a downward spiral that led to the appearance of ghost towns similar to those observed in Canoga Park. The prospect of more ghost towns close to the heart of the city and in an area that had witnessed significant damage during rioting two years earlier drew the attention of civic leaders and elected officials. Initially, the city designated two blocks on Adams Boulevard as a ghost town. As with other ghost towns, this only officially iden-tified the blocks as a “problem area.” It soon became apparent, however, that a more concerted effort was required to restore the Crenshaw and West Adams districts. The City of Los Angeles took a series of steps to encourage recovery in neighborhoods that had suffered the double hit of social unrest and earthquake damage. In these areas—Council Districts 8, 9, and 10—the city designated target areas where the CRA would develop recovery programs specifically tailored to neighborhood needs. These programs combined redevelopment disaster assistance with community-based revitalization, housing finance, and technical assistance. Start-ing in December 1994, the CRA initiated a number of redevelopment projects with the objective of providing loans and grants to businesses for public improvements, street landscaping, and fa-çade refurbishment.32 By the end of 1995, the West Adams and Crenshaw neighborhoods in- 32 Interview with Earthquake Recovery Ad Hoc Committee member.

21

cluded two such target areas that covered the commercial zone of both districts but not the resi-dential areas affected by the earthquake. For this reason, these projects were not effective in pro-viding a much-needed stimulus for residential rehabilitation. In addition to the CRA recovery efforts, a loose coalition of several community institutions emerged and lobbied elected officials in Council Districts 8 and 10.33 The Crenshaw and West Adams districts are rich in community- and faith-based institutions and nonprofit organizations, such as the Los Angeles Sentinel, the Urban League, and the West Angeles Church. Further-more, a network of informal and loosely knit institutions existed in the Crenshaw, West Adams, Limier Park, and Baldwin Hills neighborhoods, with ties to schools, museums, bookstores, art and dance schools, and art galleries. The role played by these smaller groups consisted primarily of providing meals and shelter for residents of damaged homes, assisting non-English-speaking families with applications, and other smaller tasks. Today, and despite federal assistance totaling $108 million from SBA, FEMA, and HUD in the three zip codes, recovery is not complete in the Crenshaw and West Adams neighborhoods. Of the 157 red-tagged properties we surveyed in the three zip codes, 16 (10%) were vacant. Seven-teen structures (11%) were abandoned, partially rebuilt, or had demolished portions. Five build-ings had boarded windows or doors, and 63 properties (40%) showed visible signs of needed re-pairs. In 32% of the surveyed sites, reconstruction quality was better than surrounding properties, and in 16% it was worse (Table A-3). The three zip codes in the Crenshaw and West Adams district share relatively similar socioeco-nomic characteristics. They have higher percentages of African-American populations than Los Angeles County as a whole and a median income considerably below the county’s median ($34,965). The poorest part of the Crenshaw and West Adams district is in zip code 90018, which also has the highest percentage of Hispanics. Reconstruction in this zip code tended to be of poorer quality. Zip code 90008, which sustained the least damage, had the highest reconstruc-tion quality. It is worth noting, however, that a comparison of recovery patterns across zip codes in the district is difficult because of the great unevenness of the damage that the three zip codes experienced (82% of red-tagged properties were concentrated in one zip code: 90016).

CONCLUSIONS

The Northridge earthquake hit a region that was among the best prepared in the nation for such a disaster. As this report demonstrated, the federal government and its agencies responded imme-diatelyand, by many indications, successfullyto the challenge. Today, the scars that the dis-aster left on the built environment have faded. Our study showed that the majority of damaged buildings have been repaired. A desired recovery has been reached for most Los Angeles house-holds, although its pace was often slower than expected.

33 Interview with faith-based community organizer in Crenshaw.

22

A major contributing factor in the recovery and reconstruction of the built environment was the distribution of significant amounts of federal funds as grants and loans. As noted, agencies made serious efforts to ensure that program funds reached their target populations indiscriminately. However, this study found that despite these efforts, the recovery mechanisms initiated by the federal government left areas with high percentages of marginalized populations with relatively less assistance than other areas. While the distribution of the damage from the Northridge earth-quake was not significantly associated with any particular sociodemographic characteristic, the distributions of federal assistanceand, consequently, the potential for recoverywere. At greater disadvantage were areas with high concentrations of Hispanics, low-income populations, renters, and noncitizen immigrants. Having limited internal resources, they were further hindered by limited external assistance and were underfunded by federal programs relative to other places that sustained similar or less damage. Our study showed that this discrepancy was the result of structural constraints embedded in the design of federal assistance programs that favored single-family, owner-occupied, and finan-cially secure households. Marginalized and socially isolated households lived mostly in multi-family rental units. Such households had limited access to assistance and did not meet credit standards for subsidized loans. Furthermore, most programs lacked clear guidelines for identify-ing areas of greatest need and prioritizing aid accordingly. The designation of such areas was frequently the result of political maneuvering by local officials. As often happens, marginalized populations lacked the power to influence political decision-making. For multifamily rental buildings, the primary source of reconstruction assistance was SBA busi-ness loans, which required the applicant to have a good credit history and a demonstrated ability to repay the loan. If denied SBA loans, owners of multifamily properties could turn to the city and apply for a subsidized HUD loan. The rules governing these loans, such as provisions for low-income units, union wages, and interest rates, varied from city to city and over time. Confu-sion over loan application procedures and requirements coupled with a hesitant real estate market significantly slowed the recovery of multifamily structures during the first year after the earth-quake. Finally, areas with a high concentration of multifamily and business property damage were designated as Disaster Redevelopment Areas and overseen by Community Redevelopment Agencies. The results of these redevelopment projects were mixed. The process required complex bureau-cratic procedures and was prone to political considerations, and therefore generally favored large investors (over single property owners), who in turn sought less-risky investments in more-affluent areas. These structural conditions are likely to hinder recovery in places where poverty, multifamily rental units, absentee landlords, and recent immigrants are concentrated. Similarly, these places are more likely to suffer reduced property values, temporary or permanent loss of population and business, increases in abandoned properties, and rise in crime—factors that gen-erate a spiraling negative feedback of urban decay. Access to external resources represents only one, albeit significant, determinant of postdisaster recovery. Another important factor that shapes recovery processes is the mobilization of local organizations to articulate needs, build consensus, and facilitate recovery plans. Such mobiliza-tion takes place through various local networks and institutions. As we saw in the case of parts of

23

Canoga Park, such local actors were crucial in expediting recovery even under adverse condi-tions. The constraints embedded in the design of federal programs present some serious limitations to achieving a just and even allocation of resources, and under different political and economic conditions they may have an adverse effect on residential recovery. Among the most notable limitations is the allocation of assistance based on absolute losses rather than emergency needs. The original intent of postdisaster federal assistance was to supplement existing resources, whether state, local, or individual. It is striking, therefore, that eligibility requirements did not take into consideration whether an applicant’s resources would suffice or had to be supple-mented. In fact, requirements for federally subsidized SBA loans (the major source of federal assistance) were structured so that those individuals who were most in need of supplemental as-sistance (such as low-income renters or owners of properties in low-income areas) were the least likely to receive it. Despite the damage it caused, the Northridge earthquake was not the worst-case scenario. The earthquake hit in the early hours of a national holiday, thus greatly reducing the potential for traf-fic injuries and fatalities and allowing the rapid and unimpeded movement of emergency vehi-cles. Damage was spread out and concentrated in pockets, which meant that no single area was devastated by the earthquake. This helped maintain the urban fabric of places and facilitated re-construction. At the same time, vacancy rates were higher than they are today, which meant that a sufficient number of homes were immediately available for temporary or permanent relocation. Although the earthquake had a significant impact on affordable housing, home prices and rents were at a relatively low point. This is not the case today; instead, Los Angeles is facing a severe housing shortage, especially for households in the middle- and low-income ranges. The lessons learned from the Northridge earthquake point to the resilience of Southern California in the face of adversities. They also point to its precarious fate as its resilience is repeatedly tested.

POLICY IMPLICATIONS AND RECOMMENDATIONS

In terms of housing, the most important challenge legislators and public officials in California will face with the next disaster will be how to allocate assistance in ways that ensure a timely and satisfactory recovery. With this in mind, we present the following policy implications and rec-ommendations:

► State and federal agencies should reexamine the basic assumptions behind postdis-aster residential assistance to facilitate the flow of resources to where they are most needed.

The cost of federal and state subsidies for loans and grants used for cosmetic and nonemergency repairs is a luxury that cannot be sustained or justified. Similarly, denying or limiting assistance

24

to families because they lack sufficient income jeopardizes regional economic and social stabil-ity. Therefore, instead of the current approach, which is based on losses, federal programs for residential assistance should take into account the combination of residential damage and avail-able resources of applicants to facilitate the flow of resources to where they are most needed. For example, a portion of federal and state subsidies for SBA home repair and personal property loans can be reallocated to create SBA loans with reduced eligibility requirements specifically targeted at low-income borrowers in areas with extensive disaster damage. Similarly, in the case of FEMA grants, more assurances are needed to ensure that grants are used exclusively for re-pairing emergency disaster damage and restoring losses and not for home improvements.

► FEMA and the U.S. Department of Housing and Urban Development should de-velop a more integrated approach to federal assistance for multifamily structures.

The rehabilitation of multifamily properties should not be left to market forces alone. According to the 2000 U.S. census, over 90% of California’s population lives in urban areas, and over 43% of housing units are in multifamily buildings. In Los Angeles, more than 60% of the housing units are in multifamily buildings; in San Francisco, over 80%. While private investment will always play a critical role in rebuilding damaged properties, the private sector is more likely to operate where risks are lower and returns are higher. In the case of widespread damage, under current federal programs, neighborhoods deemed less desirable from an investment perspective would be left with practically no recourse for the rehabilitation of multifamily housing. In the Northridge earthquake, HUD played a pivotal role in providing federal assistance to low-income and disadvantaged communities. This was the result of a concerted effort by HUD, FEMA, the White House, and local housing departments. However, no established rules or guidelines are in place that guarantee the implementation of a similar approach in future disas-ters. Furthermore, a more concerted effort should be made to ensure the adequate flow of funds to support housing production during normal times. Housing is essential for the economic and social welfare of citizens. Very low vacancy rates signal that the housing supply is operating at dangerously low levels, especially in areas prone to sudden and massive hazards.

► The state should make a more concerted effort to support housing production and ensure an adequate supply of affordable housing during normal times.

Nonprofit housing corporations are a valuable asset for complementing private for-profit invest-ments and providing affordable housing. The Northridge earthquake demonstrated that where nonprofit housing corporations had sufficient institutional capacity and know-how, adequate in-formation, and support from city officials, local developers, and contractors, they were able to play an active role and fill in the investment gap. State and local housing departments should fa-cilitate the formation and active participation of nonprofit housing corporations, especially in underserved communities, before a disaster.

25

► State, county, and city agencies handling postdisaster emergency and recovery op-erations should forge and maintain strong ties with community-based organizations and nonprofit housing corporations.

A more concerted effort by state and municipal agencies must be made to strengthen local or-ganizations in marginalized communities through outreach programs, education, employment opportunities, and the like before a crisis occurs. The objective is not simply to facilitate the flow of resources to marginalized areas in the aftermath of a disaster, but to improve planning proc-esses and program design through a better-informed public and a more democratic process. Community-based organizations have the potential to be important actors in the recovery process if they can build interinstitutional coalitions, accurately assess their available resources (material and human), and provide leadership.

► The OES and the Department of Housing and Community Development and rele-vant city departments should establish memoranda of understanding for postdisas-ter housing reconstruction.

Memoranda of understanding establishing rules and expectations for the reconstruction of af-fordable units should be in place and ready for activation in the immediate aftermath of an earth-quake. City housing departments should generate and maintain up-to-date databases of housing corporations willing to participate in postdisaster acquisition and reconstruction of damaged properties and of property owners willing to accept rental vouchers—akin to existing databases for debris removal contractors and construction contractors. Similar MOUs should be established between city departments and participating housing corporations. These preparations will not only improve communication and recovery in the aftermath of a disaster, but also strengthen the institutional infrastructure necessary for providing affordable housing in disadvantaged commu-nities under normal conditions.

► The Office of Emergency Services should take the initiative for maintaining a com-prehensive database of disaster-related information.

Assessment of damage and need should follow unequivocal and standardized procedures that ensure uniformity and consistency. In the Northridge earthquake, damage estimates came from a compilation of assessments by inspectors drawn from different cities and sometimes from other states. The reporting of damage was not standardized and was consistently lower than the actual damage. Streamlining, across municipalities, the guidelines and procedures for gaining access to federal assistance can help reduce delays, transaction costs, and political interventions.

► Develop pilot projects, with academic assistance, to test postdisaster recovery ap-proaches.

Finally, federal agencies involved in the recovery process should generate, maintain, and update data regarding where, when, and how much assistance is delivered. State emergency agencies can recruit the assistance of academic institutions to research and analyze the distribution of as-sistance and its actual long-term effects. Similarly, state agencies, such OES and the Department of Housing and Community Development; academic institutions, such as the University of Cali-

26

fornia; and local government agencies should cooperate with local housing corporations and community-based organizations to create pilot projects in hazard-prone areas that suffer from housing shortages. The staff of these projects can provide technical assistance in assessing capac-ity, needs, and risks. They can develop postdisaster recovery plans for accessing recovery and revitalization funds and strengthening interinstitutional linkages. It is certainly our wish that the Big One never hits California. If it does, however, it is our hope that federal and local agencies, the private sector, and community institutions will join forces and implement recovery processes that are well planned, efficient, and just for all citizens.

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REFERENCES

Bolin, Robert C., and Lois Stanford. 1998. The Northridge Earthquake: Vulnerability and Disas-ter. New York: Routledge. City of Santa Monica. 1994. Earthquake Recovery Project. Santa Monica, Calif., June. ——— 1995. Santa Monica Rent Control Board Annual Report 1994–1995. Santa Monica, Calif. ——— 1996. Multifamily Earthquake Repair Loan Program: Guidelines and Procedures. Santa Monica, Calif., November 26. ——— 1997. Santa Monica Rent Control Board Annual Report 1996–1997. Santa Monica, Calif. ——— 1999a. “Status Report: Santa Monica Five Years after the January 17, 1994, Northridge Earthquake.” Internal memorandum. Santa Monica, Calif.: City Management Services and Gov-ernmental Affairs, January. ——— 1999b. Five Year Implementation Plan FY 99/00 through FY 2003/04. Santa Monica, Calif.: City of Santa Monica Redevelopment Agency, November. Comerio, Mary C. 1998. Disaster Hits Home: New Policy for Urban Housing Recovery. Berke-ley, Calif.: University of California Press. Comerio, Mary C. et al. 1996. Residential Earthquake Recovery: Improving California’s Post-Disaster Rebuilding Policies and Programs. Berkeley, Calif.: California Policy Seminar, Univer-sity of California. EQE International and the Geographic Information Systems Group of the Governor’s Office of Emergency Services (OES). 1995. The Northridge Earthquake of January 17, 1994: Report of Data Collection and Analysis. Sacramento, Calif.: Governor’s Office of Emergency Services. ——— 1995. The Northridge Earthquake One Year Later: January 17, 1995. Federal Emergency Management Agency Report. Galster, George et al. 1995. Documentation of L.A. Earthquake Disaster Housing Assistance Policies and Procedures. Washington, D.C.: The Urban Institute. Hewitt, Kenneth. 1998. “Excluded Perspectives in the Social Construction of Disasters.” In E. L. Quarantelli (ed.), What Is a Disaster? Perspectives on the Question. New York: Routledge. Keyser Marston Associates. 1994. Earthquake Recovery Study: Estimated Unfunded Gap. Pre-pared for the Community Redevelopment Agency of the City of Los Angeles, November 8.

28

La Opinión. 1994. “El Terremoto Golpeo de Desigual Manera a la Sociedad Angelina,” January 25. Los Angeles Times. 1994. “House Unit Acts to Bar Quake Aid for Illegal Immigrants,” February 2. ——— 1994. “Quake Leaves a Legacy of Violence, Loss and Courage Recovery: Six Months Later, the Government, Businesses and Residents Continue the Struggle to Rebuild,” July 17. ——— 1994. “Valley Council Members to Seek More Quake Funds Politics: Housing Plan Was Approved When Three Area Representatives Were Absent. It Appropriates $14.7 Million,” Au-gust 19. ——— 1995. “The Times Poll: For Most Quake Victims, Life Is Back to Normal,” July 16. Peacock, Walter Gillis, Betty Hearn Morrow, and Hugh Galdwin (eds.). 1997. Hurricane An-drew: Ethnicity, Gender, and the Sociology of Disasters. New York: Routledge. RAND California. 2003a. Housing Prices and Transaction Statistics. http://ca.rand.org/stats/economics/houseprice.html 2003b. New County Construction. http://ca.rand.org/stats/economics/construct.html State of California Department of Insurance. 1996. Northridge Earthquake Insurance Loss Re-port: A Project of the Statistical Analysis Bureau. Sacramento, Calif.: California. Department of Insurance, Statistical Analysis Bureau. State of California Office of Emergency Services (OES). 1997. Residential Damage and Individ-ual Assistance Database: 1997 Update. Sacramento, Calif.. State of California Senate Select Committee on the Northridge Earthquake. 1996. Northridge Earthquake Recovery Money. Sacramento, Calif.: Senate Publications. United States Bureau of the Census. Decennial Census: 2000 and 1990 Summary Tape Files (STF-3) 1A and 3A. Washington, D.C.: U.S. Bureau of the Census. 1970-2000. Time Series of California Intercensal Population Estimates by County.

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APPENDIX

Figure A-1

Los Angeles County Population, 1986–2002

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

10,500

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

LA C

ount

y P

opul

atio

n (x

1,0

00)

Pre-disaster Population Trend

Figure A-2 Sources of Federal Assistance by Program in Lowest and Highest Aid-to-Damage Quartiles

SBA Business

29%

SBA PP3%

SBA Home46%

FEMA MHR11%

FEMA IFG6%

HUD5%

Lowest Quartile

HUD2%

FEMA IFG11%

FEMA MHR36%

SBA Home33%

SBA PP3%

SBA Business

15%Highest Quartile

Sources: OES database 1997; OES/EQE International 1995; and Comerio et al. 1996.

Source: U.S. Bureau of the Census: Time Series of California Intercensal Population Estimates by County (1970-2000).

Northridge Earthquake, January 17, 1994

5

405

1 0 605

210

110

710

210

10

405

Study Area

T o t a l Federal Assistance to Damage QuartilesL owest QuartileHighest Quartile

F reeway

4 0 0 40 8 0 Miles

N

EW

S

Figure A-3 Areas Representing the Highest and Lowest Total Federal

Assistance-to-Damage Ratios (Includes SBA Business Loans)

Sources: OES database 1997; OES/EQE International 1995; and Comerio et al. 1996.

EPICENTER

Santa Monica

Canoga Park

Crenshaw – West Adams

30

31

Figure A-4 Distribtuion of Federal Assistance Funds and Appropriations in the Northridge Earthquake (Including All SBA Business Loans)

SBA Homeowner Loans43%

FEMA IFG4%

FEMA MHR16%

HUD Housing Reconstruction

Grants and Loans (CDBG and HOME)

12%

SBA Business Loans18%

SBA Personal Property Loans

3%

HUD Section 84%

Sources: See, for example, OES database 1997; OES/EQE International 1995; and Comerio et al. 1996.

31

32

Table A-1 Evaluation of Recovery and Reconstruction Quality for Red-Tagged Residential Structures in Canoga Park

Site Evaluation Extent of Reconstruction Comparison with Surround-ing Properties

Empty Lot Fenced-in

Areas or De-bris

Poorly Main-tained Site or Landscape

Damaged or Boarded Structure

Visible Cracks or Needs Re-

pairs

Better than Surrounding

Worse than Surrounding

Zip Code

Number of Sur-veyed

Red Tags

N % N % n % N % n % n % n %

91303 26 1 4% 1 4% 2 8% 0 0% 1 4% 3 12% 2 8%

91304 12 1 8% 0 0% 0 0% 0 0% 2 17% 1 8% 2 17%

91306 13 1 8% 3 23% 4 31% 2 15% 7 54% 2 15% 3 23%

Total 51 3 6% 4 8% 6 12% 2 4% 10 20% 6 12% 6 12%

Source: Windshield survey 2001.

32

33

Table A-2 Evaluation of Recovery and Reconstruction Quality for Red-Tagged Residential Structures in Santa Monica

Site Evaluation Extent of Reconstruction Comparison with Surround-ing Properties

Empty Lot Fenced-in

Areas or De-bris

Poorly Main-tained Site or Landscape

Damaged or Boarded Structure

Visible Cracks or Needs Re-

pairs

Better than Surrounding

Worse than Surrounding

Zip Code

Number of Sur-veyed

Red Tags

% N % n % N % n % n % n %

90401 2 1 50% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%

90402 18 1 6% 2 11% 1 6% 0 0% 6 33% 10 56% 1 6%

90403 25 2 8% 4 16% 3 12% 2 8% 4 16% 11 44% 0 0%

90404 16 4 25% 5 31% 4 25% 5 31% 7 44% 2 13% 4 25%

90405 1 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%

Total 62 8 13% 11 18% 8 13% 7 11% 17 27% 23 37% 5 8%

Source: Windshield survey 2001.

33

34

Table A-3 Evaluation of Recovery and Reconstruction Quality for Red-Tagged Residential Structures in Crenshaw–West Adams

Site Evaluation Extent of Reconstruction Comparison with Surround-ing Properties

Empty Lot Fenced-in

Areas or De-bris

Poorly Main-tained Site or Landscape

Damaged or Boarded Structure

Visible Cracks or Needs Re-

pairs

Better than Surrounding

Worse than Surrounding Zip

Code

Number of Sur-veyed Red Tags N % N % n % N % n % n % n %

90008 4 0 0% 0 0% 1 25% 0 0% 1 25% 2 50% 1 25% 90016 129 16 12% 17 13% 20 16% 4 3% 49 38% 44 34% 17 13% 90018 24 0 0% 0 0% 0 0% 1 4% 13 54% 5 21% 7 29% Total 157 16 10% 17 11% 21 13% 5 3% 63 40% 51 32% 25 16%

Source: Windshield survey 2001.

34

35

Table A-4 Eligibility and Provisions of Major Federal Residential Assistance Programs

Program Objective Tenure Eli-gibility

Other Eligibility Criteria and Complementarity with Other Programs

FEMA MHR Immediate grants to rehabili-tate homes, up to $10,000.

Owner oc-cupied

Up to $5,000 for immedi-ate minimum repairs and up to $10,000 for needs unmet by SBA loans.

FEMA IFG Grants to replace and repair real and personal property and home contents, up to $12,200; additional $10,000 supplement available from the State of California for those with significant unmet needs.

No statute Needs unmet by insur-ance or SBA loans.

FEMA Temporary Housing

Two to three months rental assistance for renters and homeowners, up to $1,150 per month.

No statute

SBA Homeowner Loans

Low-interest (4–8%) loans to repair homes, up to $200,000.

Owner oc-cupied

Uninsured losses; can be used for deductibles.

SBA Personal Prop-erty (Content Loss) Loans

Low-interest (4–8%) loans to replace home contents, up to $40,000.

No statute Uninsured losses; can be used for deductibles.

SBA Business Loans Low-interest (4–8%) loans for commercial structures dam-aged by disaster, up to $1.5 million for large employers.

Multifamily owners may apply

Uninsured losses.

HUD Grants and Loans

Funds for multifamily housing projects, up to $100 million. Funds could be used both to rehabilitate the multifamily units and to assist tenants. The City of Los Angeles was the lender of last resort for those with unmet needs and provided HUD loans at 0% interest amortized over 25 years with 3 to 5 years of de-ferred payment.

No statute Low-income, Davis Ba-con federal union wage law, and affordability pro-visions. Implementation varied by city, and HUD waived several statutory requirements.

HUD Section 8 Vouchers

Rental assistance of up to 18 months for low-income rent-ers

No statute Low-income renters are eligible for extended re-newals beyond 18 months.

Source: FEMA 1994; Comerio et al. 1996.