Stud walls flex and stay standing, keeping heavy pieces of the house (the roof) standing, maybe with some superfluous cracks in the reinforced stucco or slab foundation. Masonry cracks at the mortar and separates into a heap of bricks.
Building codes exist to protect us from armchair intuition.
And to make money for inspectors. 
So that’s what this stuff is called!
Hey, why didn’t they smooth it out? I hate these bumpy, rocky walls!
People have already talked about earthquake resistance. if it cracks, just patch with bits of mortar. (OK, it’ll look like shit, especially if you can’t colour-match and match the texturing, but it fixes it.)
Plus, as mentioned - no need to paint unless you really like weird coloured houses (California, right?). Plus, fireproofing - ever seen a plastic siding house after a nearby fire? That stuff melts and curls like crazy.
I aslo assumed there was a shortage of nearby clay for brick in the good old days, and plenty of BIIIG tall trees for wood construction.
Which codes determine if a structure that goes through an earthquake is habitable?
Most of the Building Codes in California have sections covering earthquake damage and habitability.
In the US, the earthquake codes mostly grew out of California (no real surprise there, that’s where most of the earthquakes occur). Some of the codes were arrived at through engineering, others through trial and error. They get frequent enough earthquakes out there that they have a lot of examples where all they have to do is look at what is still standing to see what works and what doesn’t.
FEMA has a list of building codes created by the International Code Council. More info here:
Some areas adopt those codes exactly. Other areas (like Los Angeles) have even more strict requirements on top of the ICC seismic codes.
Thank you.
Then between takes, he’d go buy stocks on margin. Not really on topic for the thread, just a little ironic.