Do you pay your rent on time?

Experian says it will include rent payments in its credit reports.  Is it good news?  You be the judge.  For the first-time home-buyers who have paid their rents on time, this is supposed to be good news.  For those who are forgetful, it may not be such good news.  Of course, there is the issue of how much information we want some data collectors to collect about us…And, I hope the “credit bureaus” do a better job of rating people’s creditworthiness than the bond-rating agencies did with the mortgage-backed-securities.  Read it here for yourself:

http://chicagobreakingbusiness.com/2011/02/experian-adds-rent-payments-to-credit-reports.html

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Pictures from New Zealand Earthquake

Here is a link for those who have never seen a post-earthquake disaster area.  Note that most collapsed buildings are “Unreinforced Masonry” (stone or brick) and “Nonductile Concrete Buildings” (the buildings that tend to “pancake” in earthquakes). In California we have somewhat improved the safety of unreinforced masonry buildings.  We have nonductile concrete buildings by the thousands, but we are not doing anything about them.  It appears that the Christchurch earthquake did not spare wood-framed houses either.  http://www.boston.com/bigpicture/2011/02/christchurch_earthquake.html

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Value of an Energy-Efficient House

It is obvious that an energy-efficient house is worth more than another one that is not energy-efficient.  But, how much is the energy-efficiency worth?

Let’s say we expect to pay $300 a month more on average to heat and/or cool a particular house in comparison to another one.  That extra $300monthly cost is the same as adding $300 to your monthly mortgage payments.  At 5% interest rate, this extra monthly payment corresponds to a principal of $55,885.  In other words, as far as you are concerned this energy- inefficient house should be worth about $56,000 less than the other one that requires $300 per month less to heat and/or cool.

Useful lives of houses are a lot longer than 30 years, and when you sell your house someone else will keep paying the extra energy costs.  So, it might make more sense to consider the $300 a month as payment of a perpetuity, where the payments would continue indefinitely.  At 5% interest rate, the present value of this perpetuity would be $72,000.

In reality, the true value of the energy efficiency would be somewhere between these two numbers, and it might also vary depending on the prevalent interest rates and future increases in energy costs.   As a rule of thumb, though, it would be reasonable to assume that each $100 per month savings in the cost of heating and/or cooling a house would add about $20,000 to its fair value.

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Myths of Loma Prieta Earthquake

The Loma Prieta earthquake occurred on October 17, 1989.  It measured Magnitude 6.9 on Richter scale, and its epicenter was located about 9 miles North-East of Santa Cruz.  A section of the Bay Bridge, numerous buildings in San Francisco’s Marina District, and the Cypress Street Viaduct on Highway 880 in Oakland collapsed.  Building failures in the Marina District initiated a firestorm that further devastated the area.  Pacific Mall area of Santa Cruz was practically destroyed.  There were a total of 63 fatalities, most of which resulted from the collapse of the Cypress Street Viaduct.

Following the earthquake, TV cameras were focused on the spectacular failures of the Bay Bridge and Cypress Street Viaduct, and on the Marina District fires.  What the TV cameras did not show was that most structures in the Bay Area had very little or no damage at all from the earthquake.

The lack of damage in most buildings in the Bay Area gave a false sense of security to building owners.  They thought that if their buildings did not have any damage while the Marina District burned, the Bay Bridge failed, and the Cypress Street Viaduct collapsed, they must be very “strong” or very “earthquake-resistant.”  In many occasions, our structural designs were questioned by building owners and building contractors, who claimed that our projects were “overdesigned” (meaning wasteful) and that we were being too “conservative.”  “Why would we want to have so many walls in our houses or use so many steel straps” they said, “while our neighbors’ houses that had none of that did very well in the Loma Prieta earthquake.”  In defense of our engineering and our designs, we had to “educate” our clients and contractors with a script that went as follows:

The magnitude of an earthquake is a measure of the total energy released in that earthquake.  A magnitude of 6.9 qualifies Loma Prieta earthquake as a large earthquake, but not quite the largest one that can affect the Bay Area.  However, the magnitude does not by itself determine what happens to a particular building during an earthquake.   How the building responds to an earthquake and how much damage it incurs is a function of the nature of the ground shaking at the specific building location and the structural characteristics of the building.  A large earthquake generates very strong ground shaking near its epicenter, but the strength of the shaking diminishes with distance.  Scientists and engineers use maximum acceleration of the ground at a given site (expressed as a fraction of the gravitational acceleration “g”) as one measure of the strength of shaking at that site.  1.0 g is what holds us to the ground.  If we rotated a building 90 degrees so that it is parallel to the ground, it would experience 1.0 g acceleration parallel to its floors; that is, it would have to carry its own weight as a cantilever structure.  1.0 g is about the maximum acceleration that would occur near the epicenter of a large earthquake.  The maximum ground acceleration measured in the Loma Prieta earthquake was about 0.65g around Santa Cruz, and about 0.10 g on rock or firm ground 60 miles away in San Francisco, and in the Peninsula.  One way to look at these numbers is that the buildings on rock or firm ground in the Bay Area experienced about one-sixth of the ground shaking experienced in Santa Cruz.  Those buildings that did not suffer any damage did not do so because they were strong or very earthquake-resistant, but because the ground shaking under them was not strong enough to damage them.

So, what about those spectacular failures in the Bay Area?  Well, the strength of ground shaking under a building also depends on what kind of soil the building is sitting on.  Earthquake waves tend to travel through rock layers under the ground.  If there are soft soils over the rock, the earthquake waves travel upward through the soft soils and become amplified.  As a result, the buildings sitting on top of soft soils are subjected to stronger ground shaking than the buildings sitting on rock or firm soils.  It is no wonder, then, the spectacular failures in the Bay Area occurred at locations with natural or artificial fill soils.

In a nut-shell, the Loma Prieta earthquake was a large earthquake for the Santa Cruz-Monterey area.  For the Bay Area, however, it was a large earthquake that occurred a long distance away.  If the epicenter of the earthquake was located within the Bay Area, its consequences would have been truly disastrous.

 U.S. Geological Survey (USGS) assigns a probability of about 63% to a large earthquake impacting the Bay Area during a 30-year period.  According to USGS, the next “big one” can originate from the Hayward-Rodgers Creek fault system in the East Bay, or from the San Andreas Fault in the West.  Hayward-Rodgers Creek fault system is the more likely source of the next big earthquake than the San Andreas Fault.

Given that we live in a very active earthquake region, it would be a big mistake to let our guard down because our buildings did not suffer any damage in the Loma Prieta earthquake.  Structural engineers are doing their best to protect their clients’ lives and property when they design new buildings or strengthen existing ones.  Those who trusted and listened to them will be glad they did when the next big one strikes.

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What Is Below the Lake?

The header on this page is a view of the Crystal Springs Reservoir, which extends along Highway 280, south of San Francisco.  Beyond the lake, you see the fog draping over the Santa Cruz Mountains.  I love this view, and every time I drive on Highway 280 I think of how lucky we are to live in such a beautiful place.

What lies underneath this beautiful, peaceful lake is our very own San Andreas Fault, which is one of the main fault lines that make our neighborhood an “Earthquake Country.”  For all I know, you may be looking at the location of the next fault rupture that will create our next big earthquake.

The picture at the header is a constant reminder that we indeed live in a beautiful place, but we also live in an active earthquake region.  As residents of the Earthquake Country we need to recognize the risks we are facing and prepare for the next “Big One.”  Making sure that our homes are “safe & sound” is a very important part of our earthquake preparedness.

Here is an article for those who would like to read a bit more about this topic.

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Hello World!

Here I am, entering the World of Blogging.  I am excited, and I am looking forward to exchanging ideas, learning and teaching, and having lots of fun in the process.

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