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Owners fear losing homes because of cost of quake strengthening

Radio New Zealand logo Radio New Zealand 6/06/2019
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Owners of earthquake-prone apartments in Wellington fear they'll end up destitute or homeless with the cost of strengthening their units now at 10 times more than government estimates.

Furious inner city residents are demanding a law change.

"We've had various assessments of the costs of strengthening our building, ranging from about a million dollars and now we're up to about four million dollars, and it is just an ongoing nightmare," apartment owner Carol Brown said.

Her share of the bill could be as much as $120,000 and Ms Brown, who is retired, said she had no idea how she would afford it.

"Today, I still own that home, I'm still debt free - but I don't know for how much longer. I've got modest savings and when they're gone, I don't know: I could be homeless. And so could other people," she said.

The 1920s Blythswood building Ms Brown lives in is on a priority route, where there are lots of pedestrians and traffic.

A 2016 law change means owners of earthquake prone buildings in high risk areas like Wellington have 15 years to fix them.

But owners such as Ms Brown, whose buildings are on priority routes, have only 7.5 years to complete the work.

"The government needs to understand the singularity of what they are asking, the enormity of what they are asking. And because it is largely for a public benefit - I allow there is some private benefit in there too - the public purse should be opened for a public benefit," she said.

One resident said he had a bill between $500,000 and $600,000. A recent survey found costs ranged from $93,000 to $805,000.

It is a scary reality for hundreds of inner-city residents, one which Hazel Kirkham, a member of lobby group Inner City Wellington, said was not foreseen by government officials.

"Nobody ever checked with the funders of this programme - a multi-billion dollar programme - whether the funders were ready or able to pay for it. And now we find we can't," Ms Kirkham said.

Ms Kirkham said she spent nearly 18 months digging through government documents to try to find a reason for apartment owners to be included in the legislation, but found none.

And now, she say, they're being forced to spend hundreds of thousands of dollars they'll never recoup.

"It's iniquitous... the definition of that is unfair and morally wrong," she said.

Officials advising on the law change estimated it would cost $25,800 to strengthen the average unit, she said.

Inner City Wellington surveyed owners of 16 buildings and found the average cost to be $241,571 excluding GST.

The group thinks that could balloon to $436,868 once expenses like lawyers fees, interest rates, GST and resource consents are included.

The average rateable value of those apartments was $483,542.

Geraldine Murphy, the association's seismic spokesperson, said it was clear the government needed to take another look at the law.

"This is way, way bigger than the government knows, than the council knows. They're making these policy decisions based on really poor data, or no data at all," she said.

The government has set aside $23 million for a suspensory loan scheme to help apartment owners or investors struggling to pay for the strengthening work.

Ms Murphy said that was not enough.

"Some of them will be spending way more than they'll ever get back," she said.

"If [the government's] imposing this burden, and they're not stopping it, we'll be pushing for compensation," Ms Murphy said.

"For donations to charitable organisations you get 33 percent of your donation back, just like that, no questions asked. This is a public benefit, that sounds a good starting figure," she said.

Owners who could not afford to strengthen their apartments could be stung with a $200,000 fine and still have to pay for the building to be demolished.

But the group would not giving up without a fight and would be going to Parliament to demand a law change.


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