Table 42: Allocation of costs and benefits among stakeholder groups

4.9 Allocation of costs and benefits by stakeholder group

Examining how costs and benefits accrue to different stakeholders in greater detail is worthwhile. Doing so will help proponents of the National WUI Guide understand the interests of decision-makers who follow or decline to follow the National WUI Guide. Table 42 lists stakeholder groups and quantifies how those costs and benefits are distributed. See Multi-Hazard Mitigation Council (2020) for background on this allocation and for ideas on how to align the interests of different stakeholder groups.

Table 42. Allocation of costs and benefits among stakeholder groups

Stakeholder Costs

Developer CC1 and CC1(FR) costs. Not quantified here: cost to understand and adapt to National WUI Guide recommendations; possibly costs to educate suppliers and contractors. First owner Construction costs transferred from developer; vegetation maintenance costs.

Later owners Vegetation maintenance costs; possibly higher purchase price (not quantified here).

First and later renters and owneroccupants

Insurer Data collection, management, and actuarial analysis associated with policy underwriting that recognizes satisfying National WUI Guide (not quantified here).

Lender Data collection, management, and actuarial analysis associated with mortgage underwriting that recognizes satisfying National WUI Guide (not quantified here). Municipality Policy analysis and development plans; paving; added access routes; firefighting response planning, evacuation planning, and resources; planning for buses, watercraft, and emergency communication; public education development and implementation.

Electric and water utilities Construction of water distribution system; vegetation management around above-ground lines; undergrounding or pole replacement (if used).

Taxing authorities

Benefits

Lower fire insurance overhead and profit costs during holding period, perhaps 2% of the total of these benefit categories.

Lower insurance overhead and profit cost. Assuming a 10-year ownership period, perhaps 15% of the total of these categories. Possibly higher resale value (not quantified here). Like first owner.

Lower risk of death, non-fatal injury, and PTSD. Lower content loss. Lower insurance overhead and profit costs for people with renter’s insurance. Lower displacement costs, especially uninsured renters. Benefits in these categories in proportion to tenancy period as a fraction of the 75-year life of the property. Non-monetary losses not quantified here: mementos, peace of mind, and pets. Lower building and content claims, lower additional living expense claims, lower claims management costs. Benefits in these categories in proportion to policy life as a fraction of 75-year life of the property. Lower mortgage default risk (not quantified here).

Reduced firefighting and other first responder monetary costs and health impacts; lower debris removal costs and environmental impacts; retention of community character; reduced risk of permanent relocation of residents. Reduced property loss; lower debris removal costs and environmental impacts; greater stability of demand, service, and revenues; reduced risk of permanent relocation of employees. Provinces enjoy a varying fraction of indirect business interruption benefits (generally 10%) through HST stability. Federal government enjoys 5% of indirect business interruption benefits through GST stability.

4.10 Non-residential buildings

This impact analysis focuses on residential construction, but the National WUI Guide considers all building types. Most buildings in the wildland-urban interface are residential, just as most buildings are residential regardless of proximity to the wildland-urban interface. Commercial districts of larger communities tend to be more removed from the wildland, but many are not. A larger fraction of non-residential buildings than residential buildings are built of non-combustible material such as unreinforced or reinforced masonry, but many are built of wood, including commercial buildings in the wildland-urban interface.

5.1 Summary of conclusions

5.1.1 Sampling Produced Realistic Archetype Houses

The project team examined 102 houses in nine communities nationwide, including three communities each in low-, moderate-, and high-hazard areas. Sample communities include small, medium, and large population centres spanning the country from British Columbia to New Brunswick.

Archetype existing houses were selected to approximate median characteristics of the sampled buildings in terms of square footage, storeys, cladding, and roofing. Archetype houses were selected to represent new construction from a subset of sampled houses built since 2000.

The archetypes are real houses drawn from Zillow.com. Selecting archetype houses in this way reduces the chance for the project team to skew results to accidentally favour either more or less costly mitigations to satisfy the National WUI Guide. The archetypes seem more plausible because they are real houses.

5.1.2 New Construction Costs $6.00 More Per Square Foot

It costs about $6.00 more per square foot, or about $12,000 total for a new 2,000-square foot house, for new construction to satisfy the National WUI Guide by structural means, i.e., using construction class CC1 or CC1(FR). The cost is about a third of that if one can control vegetation in the 10 to 30 metres nearest the house (priority zones 1 and 2). This finding contrasts with that of Headwaters Economics (2018), which estimates that it is less expensive to build a fire-resistant house than a typical one. However, Headwaters uses a typical house under as-is conditions with relatively expensive cedar plank siding. By contrast, most of the 102 houses sampled here appear to have vinyl siding. Our sample agrees with at least four Canadian vendors and trade magazines, who assert that vinyl is the most common siding for Canadian construction by far, and at least one asserted that wood siding is a rare, high-end choice. The difference accounts for $10.00 per square foot of construction cost. The difference highlights the importance of using a careful sample of real houses to characterize the attributes of the building stock. A made-up example cannot be used without running the risk of biasing the results.

5.1.3 Retrofit Costs $16.00 Per Square Foot

We found that it costs about $16.00 per square foot to retrofit an existing archetype house to satisfy the National WUI Guide by structural means, i.e., using construction class CC1 or CC1(FR). The cost comes mostly from replacing vinyl cladding with non-combustible cladding and replacing windows that have non-tempered outer panes with windows that have tempered outer panes. Thus, to retrofit a 2,000-square foot house immediately costs about $32,000. Retrofit cost is much lower, about $7.00 per square foot of living space, if one can control vegetation within 10 to 30 metres of the house instead of structurally retrofitting the cladding and glazing.

5.1.4 National WUI Guide Saves Up to $34 Per Added $1 of Cost

The benefit of satisfying the National WUI Guide is mostly driven by the frequency with which houses experience wildfires. In high-hazard areas, the benefit-cost ratios are estimated to be 34:1 for new construction and 14:1 for retrofit. Mitigation via vegetation management in priority zones 1 and 2 is even more cost-effective by a factor of two to three, although more problematic to ensure for the long term.