Although on the face of it the idea seems a bit odd, if built right there is probably no reason why it should not be fine. There are things used in building that are far more combustible than wood. There is not enough detail in here to make a call really.
There is little doubt it will be structurally sound and being in an earthquake area it is a good choice.
Looking around the architect forums it seems the questions are more about is the answer to City living in tower blocks rather than any structural or fire risk.