Mitigation Saves:
Mitigation Saves up to $13 per $1 Invested
EVERY AMERICAN FACES NATURAL HAZARDS, AND THE
RISK IS GROWINGU.S. disaster losses from wind, floods, earthquakes, and fires
now average $100 billion per year, and in 2017 exceeded$300 billion—25% of the $1.3 trillion building value put inplace that year. Fortunately, there are affordable and highly
cost-effective strategies that policymakers, building owners,
and the building industry can deploy to reduce these impacts.
These strategies include adopting and strengthening building
codes, upgrading existing buildings, and improving utilities
and transportation systems. The benefits and costs associatedwith these mitigation measures have been identified throughthe most exhaustive benefit-cost analysis of natural hazard
mitigation to date and documented in Natural Hazard Mitigation
Saves. The study was funded by three federal agencies and four
private-sector sponsors and produced by the National Instituteof Building Sciences – the nation’s Congressionally charteredconvener of experts from the building professions, industry,labor, consumer interests, and government. For the report andaccompanying fact sheets, see www.nibs.org/mitigationsaves.
This fact sheet summarizes the study findings and significant
savings associated with various mitigation measures.

• Adopting the latest building code requirements is affordable
and saves $11 per $1 invested. Building codes have greatly
improved society’s disaster resilience, while adding only
about 1% to construction costs relative to 1990 standards.
The greatest benefits accrue to communities using the mostrecent code editions.
• Above-code design could save $4 per $1 cost. Building
codes set minimum requirements to protect life safety. Stricter
requirements can cost-effectively boost life safety and speedfunctional recovery.
• Private-sector building retrofits could save $4 per $1 cost.
The country could efficiently invest over $500 billion toupgrade residences with 15 measures considered here, saving
more than $2 trillion.
• Lifeline retrofit saves $4 per $1 cost. Society relies on telecommunications, roads, power, water, and other lifelines. Casestudies show that upgrading lifelines to better resist disasters
helps our economy and society.
• Federal grants save $6 per $1 cost. Public-sector investment
in mitigation since 1995 by FEMA, EDA, and HUD cost thecountry $27 billion but will ultimately save $160 billion, meaning$6 saved per $1 invested.
ADOPT
CODE

ABOVE
CODE

BUILDINGRETROFIT

LIFELINE
RETROFITFEDERAL
GRANTS

4:1
0.6
$
2.5

6:1
27$
160

11:1
1/year$13/year

4:1
4:1$
4/year 520$
16/year $2200

6:1

5:1

6:1

8:1

7:1

Hurricane Surgenotapplicable

7:1

not
applicable

notapplicable

notapplicable

Wind

10:1

5:1

6:1

7:1

5:1

Earthquake

12:1

4:1

13:1

3:13:1

Wildland-Urban Interface Fire

notapplicable

4:1

2:1

notapplicable

3:1

Overall Benefit-Cost Ratio
Cost ($ billion)
Benefit ($ billion)

Riverine Flood$$$$Copyright © 2019 The National Institute of Building Sciences

TABLE 1. Nationwide average benefit-cost ratio by hazard and mitigation measure. BCRs can vary geographically and can be much higher
in some places. Find more details in the report.

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Mitigation Saves:
Mitigation is Affordable and Saves up to $13 per $1 Invested

THERE ARE MANY WAYS TO BETTER PROTECT SOCIETY
FROM NATURAL DISASTERSNIBS has updated and expanded its groundbreaking 2005
study for the U.S. Congress on the cost-effectiveness ofnatural-hazard mitigation. The new study examines more
approaches to mitigation, beyond the federally funded retrofit measures considered in the first study. Other fact sheetssummarize these big takeaways:

be cost effective to build the first floor up to 10 feet above
base flood elevation, in some places saving more than $12
per $1 of added cost.
• Building along the Gulf and Atlantic coasts to comply withIBHS FORTIFIED Home requirements would cost $720 million, but save $3.8 billion per year, with some benefit-cost
ratios over 16:1.

Adopting and enforcing current building codes is among themost efficient ways to build a resilient society.

• New buildings in earthquake country could be made 3 times
stronger and stiffer than code and cost less in the long run:$4.3 billion saved for $1.2 billion cost. Some places save morethan $8 per $1 invested.

• The home of Pamela and Warren Adams in Gilchrist, Texas,
survived Hurricane Ike in 2008 because it complied with code
requirements for elevation. Neighbors with noncompliant
homes lost everything.

• In 10,000 census blocks across the country, adopting theInternational Wildland-Urban Interface Code would cost $800
million per year and save $3 billion, with some places saving
over $6 per $1 invested.

• Building 1 foot above the 100-year flood elevation is costeffective, adding only $90 million of construction cost peryear for new construction, while saving $550 million, a 6-to-1
benefit-cost ratio.

The nation could invest over $500 billion to retrofit existingbuildings but save over $2.2 trillion.

• Building-code hurricane requirements save an average of$10 per $1 of added cost ($5.6 billion saved for an annual
investment of $540 million), with benefit-cost ratios that reachas high as 30 to 1.
• Enhanced earthquake design requirement over the last 30years save $7 billion per year of new construction while only
adding $600 million per year in construction cost, with benefit-cost ratios that in some places reach as high as 32 to 1.

• Anheuser-Busch spent $11 million to retrofit its Van Nuys,
California brewery just before the 1994 Northridge earthquakeand saved $2 billion, while protecting its market share andemployees.
• More than 1 million older houses stand in the 100-year floodplain. Buyouts, elevation projects, and other retrofits could
save society $1.3 trillion at a cost of $230 billion—$6 saved
per $1 invested.

Model codes make buildings safe, but above-code design
can reduce both damage and long-term costs.

• Private-sector retrofits for hurricane could save society $140
billion at a cost of $24 billion—a 6:1 benefit-cost ratio fromretrofitting 3 million single-family dwellings and 130,000 manufactured homes.

• Paul Jackson of Mexico Beach, Florida, built his home tocomply with the higher requirements of IBHS FORTIFIED
Home. His home survived Hurricane Michael. Those of hisneighbors didn’t.

• Seismic retrofits could save $330 billion at a cost of $25
billion by fixing soft-story dwellings, adding engineered tiedown systems to manufactured homes, and several low-cost
nonstructural measures.

• Buildings in riverine floodplains could cost-effectively be builtwith up to 5 feet of freeboard rather than 1 foot, saving $4.2
billion in avoided future losses at a cost of $900 million, asavings of 5 to 1.

• It would save $430 billion to make 2.5 million homes in the
wildland-urban interface comply with the 2018 International
Wildland-Urban Interface Code. It would cost between $53
billion and $240 billion to do so, so the nationwide benefit-cost
ratio could be as high as 8:1 or conservatively 2:1• In most coastal locations subject to hurricane surge, it cannibs.org/mitigationsaves©2020 The National Institute of Building Sciences | All Rights Reserved.

2Mitigation Saves:
Mitigation is Affordable and Saves up to $13 per $1 Invested

Retrofitting lifelines protects the whole economy, saving up
to $31 per $1 invested.
• A grant to Greenville Utilities of North Carolina was used
to raise a berm and floodwall around its water treatment
plant, protecting it from more than 3 feet of flooding during
Hurricane Matthew in 2016.
• Activities that enhance resilience of water and wastewater
facilities, electric utility substations, roads and railways, andcommunications equipment yielded benefit-cost ratios ashigh as 31 to 1.

FIGURE 2. Should we ignore, fix, or demolish thousands of vulnerable
concrete and steel-frame buildings in earthquake country?

Federal grants saved $160 billion and cost $27 billion, a 6:1
ratio, with savings in each state.
• Buyouts after the 1993 Midwest floods brought people peaceof mind and protection.
• A variety of federal mitigation grants to make public buildings
better resist floods, earthquakes, and hurricanes save thefederal treasury almost $1 billion annually.

MUCH REMAINS UNKNOWN ABOUT POTENTIALLYVALUABLE MITIGATION MEASURESFIGURE 3. Should utilities and transportation infrastructure be
designed to remain functional rather than merely not kill people?

No study provides all the answers. Figures 1-5 illustrate open
questions about high-risk commercial buildings, business
continuity plans, stricter lifeline design, warning systems, andprotecting vulnerable populations.
Many more questions beg for answers that could save thenation billions of dollars and thousands of lives:• What shall we do about tens of thousands of elevators thatlack emergency power, and could trap occupants for days
after a big earthquake?

FIGURE 4. Government warning systems can provide hours or days ofadvanced warning. Does it make sense to cut their budget?

FIGURE 1. Continuity plans can make the difference between businesssurvival and bankruptcy. What is their benefit-cost ratio?

FIGURE 5. Disasters hit disadvantaged populations harder. How canbenefit-cost analyses better account for that?

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Mitigation Saves:
Mitigation is Affordable and Saves up to $13 per $1 Invested• Would it make sense to repair damaged buildings and infrastructure to current or above-code levels?
• How broadly does design or upgrade to meet or exceed
code levels improve resale value?
• What are the most affordable, cost-effective measures for
improving schools and other critical facilities?
• Does the Federal Office of Management and Budget (OMB)
statutory discount rate of 7% make economic and ethicalsense?
• Does OMB’s valuation of mitigation measures accurately
capture their benefit to the U.S. government?
• How can the economic analysis tools used by the Congressional
Budget Office (CBO) Joint Committee on Taxation (JCT) be
improved to adequately estimate future benefits of mitigation?

• How can the people who benefit from mitigation without
paying for it fairly incentivize owners to improve new andexisting buildings?
• How can we best teach ordinary people about mitigation
and resilience?

NIBS hopes to answer these questions and more, in furtherance of its mission to resolve present and future problems andto promote the construction of safe, affordable structures forhousing, commerce, and industry throughout the United States.
To help NIBS do that, please contact Jiqiu (JQ) Yuan, jyuan@nibs.org, Executive Director of the Multihazard Mitigation
Council and Building Seismic Safety Council, National Instituteof Building Sciences. Visit nibs.org to learn more about how
NIBS helps to advance building sciences and technology forthe benefit of the nation.

• How cost effective is incremental rehabilitation: strengthening
buildings during normal maintenance?
• How can code developers estimate the benefits of new
requirements when they consider adopting them?

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