By ChrisJ*
Both EQC and NZI have been terribly slow. In fact 6 months after being assessed as overcap (NZ$120,000) we still don't have payouts on 2 claims from EQC. On a further 4 we have received nothing after 3 months.
All we have so far is 2 overcap payouts for properties wrecked in Sept. We expect maybe 12 will be overcap with current damage. No repairs have been done, no schedule to repair anything even presented to us.
NZI have appointed assessors to some properties but one property had the assessor from NZI visit about 9 Sept and NOTHING further has happened. It's nearly impossible to make any progress, the insurers just make excuses which initially were that they had to wait for EQC, now it is that they have to wait for the government land reports.
NZI told us they will not do any repairs or rebuilding except in the outer NorthWest (ironically where they have no or very little damage, and most repairs are under EQC caps).
Interestingly today the assessor told us that he reckoned the vast majority of people he is dealing with can't hold on and are desperate for any settlement. Probably hundreds if not thousands of business and property owners will be forced to walk away because delays in dealing with insurers, demands from CERA to demolish and constant bills on unusable buildings (which have no income in the forseeable future).
There is an unbelievable lack of recognition of any of these issues by authorities, and worst of all they are imprisoning people in their wrecked homes because of the inaction.
There's no way land can be repaired and rebuilt on in any reasonable period of time. Yet they delay as if a solution is only moments away.
Of note in last week's Property Press (published before Monday's quakes), of the 60 ads from one agency, 13 mentioned the vendors were leaving town. One was a wrecked property being sold as is. 4 were deceased estates or moving to retirement villages. 5 were currently (or were previously) rented. 4 were new builds. 7 said the vendors were seriously motivated without giving a reason. Just 26 had no mention of vendors intentions.
So 27 out of 60 ads were for sales where the vendor wouldn't be rebuying in ChCh. How many of the 33 that didn't give the a reason were actually leaving too? I suspect that well over half of all sales will likely be "end of chain". Most ChCh people won't consider moving North either, after being dealt with like this by the Government most will bypass Auckland and head straight to Australia.
I can't see any salvation any time soon.
Red zone
Updated: Just a note on the "red residential zone": there are literally hundreds of homes in the red zone with little or no damage. As noted in this morning's press they will not get any replacement insurance payout, so will be forced to take GV which in many cases bears no relationship to market value. Even worse some will benefit because there GV's are very high where as a large number will be much worse off.
If this plan proceeds (I think there are too many problems with it) 5100 houses will be demolished, plus most of the 10,000 in the orange zone, plus there is perhaps another 15,000 in green zones that will be uneconomic to repair.
So that's perhaps 30,000 that will go eventually (many more than John Key's 12,000). Then why on earth is the Government rushing to condemn probably around a 1000 houses in the red zone that are virtually untouched?
You can feel the seething anger from people over the Governments continued ill-conceived plans.
First we had Fletcher's tie up the recovery process by locking people into doing repairs. The we had house buses and temporary homes. CBD lockdowns and forced demolitions. Now we have mass abandonment. Not one decision has moved thing forward in a positive way, there has just been a total avoidance of consultation and a complete lack of acknowledgement of the real issue which is sorting out insurance and getting insurers to pay up.
Clearly Gerry thinks that because the insurers are telling him they are doing a good job, that they are doing a good job!
* ChrisJ is a regular commenter on Interest.co.nz and a Christchurch resident who owns several properties.
115 Comments
The first part of your article makes me wonder if there is any point at all in doing the responsible thing and taking an insurance...
Regarding the govt's offer (2007 GV on red zone houses), what other more accurate value do you think they should use if not the GV? What else is available to them? As far as I understand it the GV reflects the value of a property based on the recent sales of similar houses in a specific area. Given values have gone down since 2007 it seems quite fair to me. If owners felt their GV was way too low maybe they should have got an independant valuation to have it updated (instead of maybe feeling quite happy to pay lower rates?). Asking owners how much they "think" their property was worth wouldn't be the way to go considering that most people over-estimate this market value (see asking price vs selling price). The way the classification into red/orange etc was done is another thing altogether.
Elley, people who deal in real estate knows that GV's need to be taken with a grain of salt. GVs are designed to be consistent, however huge variation over time occurs.
Remember when these GVs were initially struck (say up to 50 years ago), the value for one property new house may have been $4,000 and it's 30 year older neighbour $2,000 say. The way revaluations work these sort of variations get propagated into current GVs, but now that the 50 year old property is tired and dated and the 80 year old property has been spruced up and is fashionable the variations can make unreviewed GVs wildly inaccurrate.
It's quite common for land values in a GV to not reflect market value at all even though total Capital Values may be close to market value.
Unfortunately this is the case in places like Bexley. Whilst many of those in more affluent Avondale have GVs above market value, those in Bexley and some other areas are below market value.
Overall the Government payout would not have been significantly different, had market value been adopted, however it would have been a fairer arrangement.
Yes, GVs are not a market value - as the valuation method involves an attempt to maintain parity within a neighbourhood.
For example, we recently obtained a building permit for building renovations to a value of $60,000 on our house. The house was an untouched 1920s bungalow moved to the site some 10 years ago. Uninhabitable basically - unless you have an amazing pioneer spirit, that is! Spent $100,000 on the upgrade once the chattels were included.
QV turned up on our doorstep once the CoC was issued, as is their normal practice.
The valuer didn't want to reflect the cost of the renovations into the GV at this stage, as that would mean our all up capital value wouldn't be in keeping with values across the neighbourhood. So I suggested he up the value of the improvements (i.e. building) and take the equivalent off the land. However, that would have made the situation worse, because then they would have to lower land values across the neighbourhood - and of course, rates around here are predominantly based on land value.
I am still working with them to come to a satisfactory solution, as I want the value of the dwelling to reflect its true replacement value.
So, GVs really have many, many reasons why they do not reflect market/replacement value. I have argued for years that local government should move to a points system for rating purposes - not a dollar value system. Such points relating to user-pays type reflections of the design/nature of the property - a larger proportion of the section footprint being built (i.e. non-permeable surface) would attract a higher point score with respect to stormwater costs, for example... and so on.
Yes, I agree that the GV can be inaccurate. But what else is available to the govt? It seems hard to send a registered valuer around to assess the pre-quake value of every single house in the red zones, and how accurate would that be when many of those houses have been wrecked?
That is why I was saying that if owners felt their GV didn't reflect the value of their house maybe they should have voiced their concern when they received their rates bill, on which the GV is clearly written.
We built recently (moved in 15 months ago) and our GV is about 15% below what the cost of land + building was to us. I rang QV about it and they said that they compared recent, similar house sales in a specific area to come up with their figure. Seeing that our closest neighbour was a few kms away and that sales are far and few between, I am not sure which "sales" they compared us to, not to mention that they would be hard-pressed to find "similar houses" where we live. So, I left it at that because at the end of the day, what we paid to build may not be what people would pay to live where we live and the GV may well be correct. But if I felt strongly about it and was convinced they were wrong, I'd definitely have had an independant valuer come around (even more so after the Sept earthquake seeing that we are in the Waimak and that having an inaccurate GV could lead to the issues you describe).
Why has the government stepped in at all in making an offer regarding purchase of the improvements (i.e. built structures)? I can understand them purchasing land if they no longer intend to provide reticulated services and to maintain roadways in a specific area - but to me the better option would have been for them to secure vacant land and offer land title swaps with the guarantee that the alternate land would have roads and services installed from the government purse.
They seem to be "propping up" the insurance industry in a way - as many of these properties have "full replacement" policies - and clearly "full replacement" would cost more than the current rateable valuation of the improvements on many of these dwellings. The cost of building having increased significantly since 2007. So to me, the government is subsidising the insurance industry with this taxpayer funded offer.
Additionally, some people may prefer to retain the title to their existing land if they want - provided they also privately provide their own waste/wastewater and water - and maintain their own access/roadways (and be prepared to self-insure going forward). Some of these people might also purchase surrounding property from the government.
I really haven't thought about all the options - but the one the government just announced seems fraught with complications to me.
Well, there's always the option of declining the 2007 GV full amount, taking the 2007 GV land payout, and arm-wrestling your insurer to allow you to lift, shift and reinstate your house, for the truly undamaged ones.
But bear (gummy?) in mind:
- new Building code requirements
- new foundation designs
- getting the truck in and out without it going down a sinkhole.
Take a good lawyer, and yer gumboots.
Not too far fetched...has worked out well in a couple of cases in Kaiapoi however to do it on a grander scale and related insurance issues possibly not so easy. A few vested interest groups would lobby against it however in some cases CERA will do what it can on associated land costs however building costs also have be tackled, there is no one silver bullet.
The Government could consider this option as part of their proposal as well. Be nice byproduct for the environment as well if workable.
Waymad you are spot on the money. My builder told me 3 weeks after Feb easrthquake that i was lucky I had fixed price contract as new codes had come in, prcies went right up and it would of cost me an extra 15-20 percent.
REMEMBER full repalcement is Full repalcement of your Sq meter of your house (If you take the insurance path and not government offer). Most older houses are only 120-160 sq meters. if you are thinking of building in a subdiviison, most have rules and requirements that you build to a min Sq meters, when I was looking it was about 220- up to 260 (including the garage)- YOU will have to cover the difference in what you get paid out and what you need to build if you want a new house.
I can see CERA having to open up there own sub division- Government will have to open the cheque book again, but just not sure how deep the pockets can be.
Regardless there will be a supply-demand issue subdivisons etc.. will take time and labour- Labour resource they will need to get CBD and business parks up and running first in order to keep jobs around- No jobs then forget about the need for residential houses.
I'm not sure if people are aware that the residential red zone includes houses that were started after September 4. I also know of new townhouses in a "green zone" that sunk about 300mm on 13 June which had been started after Feb 22.
The code changes were "blindingly obvious" yet little has been done to sort these issues out.
Now they are talking about building in the Prestons area. This is land very similar to areas that have major problems but is just further from the epicentres and out of the direct path of the high energy waves from previous events. All houses should be built on driven piles to firm ground - floating foundations and rib rafts should not be an option - yet they are still being built today.
In terms of bracing for ground floors in 2 and 3 level timber buildings in particular, the standards need to be lifted hugely. We have engineers telling us that modern buildings performed better than expected and did what they were supposed to even if they were damaged - then how is it that a large number of near new timber framed 3 level buildings completely collapsed on the ground floor? These were unsurvivable collapses for anyone unlucky enough to be inside.
(Cross-posted from the Press - hope that isn't classified as Incest or summat, admin?)
As to new-section prices in Chch, ask the seller for an itemised price, specifically separating out the CCC components. You'll be somewhat amazed at the 'CCC Development Contributions' (for what? you may well ask) line item.
Then, ask the CCC to justify continuing to charge these fees at a time when, to retain some fraction of paid-out Red Zoners, section prices will need to be the absolute minimum.
You may also be surprised at just how much of the total price, those CCC levies are.
CCC, with CERA and the Government looking hard at its operations, and with various debacles (VBase, the unusable Hereford Street offices, and staff on 1-day-a-month leave on our nickel) swirling around it, may very well be quite receptive......Zero CCC levies, reduced section prices, sounds like win-win to me.
In one of the areas where low priced sections could be created (Woolston) the development contributions are $30,000 per site.
Market value is around $120,000 for a section but few are available. Cut the development contribution and a lot more would become available and the price might also fall slightly.
Ironically in Fendalton a development contribution on a $1m section would cost $20,000. (I wrote submissions to council about this for the last 3 years in the LTCCP so they all know about it and have done nothing).
How can you possibly start doing major repairs and remediation when the ground down there is still geologically unstable and is likely to remain so for another 3-6 months? To begin now would be utter foolishness, as the June 13th aftershock clearly showed. I’m sorry, Chris J, but you’re just going to have to suck it up until it’s safe to start to rebuild. You can’t play chicken with Mother Nature. You’ll lose.
All the more reason the assessed value to repair should be in his bank account earning interest not with the insurance companie and with EQC earning them interest!!!!!
All this stalling on making payments by both EQC and insurance companies is theft in my opinion.
I read that Sutton told red zone residents they'd have to wait 6 weeks just to get an official letter from the government outlining the fine print to these recent announcements.
I'd be furious.
Why can't these people get out tomorrow?
I'd liken the government response like a corrupt dictatorship. Insurance premiums have been paid - damage is done - payments should be free flowing.
Thanks Kate.
There certainly is no reason why part payments could not be paid. If repair or replacement is above indemnity value which in most cases it is, then why not payout the indemnity immediately and sort out the rest later, that would be the fairest way.
Instead many are been crucified as banks continue to accrue interest and loss of rent cover runs out.
The insurers are pretending to fumble in an excuse to delay fufilling their policy obligations, surely some regulatory action could be taken, such as forcing insurers to pay interest from the date the damage occurred?
Of course regulatory action could be taken. The government is however on the side of the corporates. I think a website where disgruntled policy holders can register that they have contracts with a particular insurer and where a class action law suit then follows might be the best way to begin fighting these injustices.
But you can't do that fully either Kate. Come on, don't be so silly. If you have already been paid out for partial damage to your home, you start repairs, and then another quake comes along and totally rights it off, then what? We're not just talking a few homes here, Kate, but thousands. Don't be so pig-headed and naive. Save your indignation for practical solutions that work, and not the way the world should be.
DavidB - the red zoned properties aren't going to be repaired - so no excuses there regarding any delay whatsoever.
Any other payments can be made under a proviso that no repairs are undertaken until the assessors revisit and approve commencement of repairs - otherwise all future payments for additional damage are voided.
Plain and simple, the money is owed. There is no getting around that. Policy holders are being ripped off.
Presumably if it was that simple they would have done it already, right? So what is that telling you? It’s too easy for people like you, Kate, unaffected by the earthquakes and the insurance issues involved, to sit on the sidelines making your royal pronouncements.
David B, there is no reason insurers should get the benefit of using excuses as you suggest. Most replacement buildings could be built with little fear of damage, provided adequate foundations (piling) are included and a reasonably high standard of bracing.
Even if construction cannot begin the insurer should pay the indemnity value at a minimum, with the balance paid as construction takes place. It's simple.
Societies running out of money ?
Why do we need houses we cannot afford, but are loaded with mortgages – depending on bangsters ? What should be build, are working/ living communities with nice, affordable 2 story apartment and row houses each with a 30m2 – 50m2 garden and short commuting distances to work/ facilities.
Agreed. That is not what is going to happen though. New suburbs similar to Northwood will pop up around the fringes of town. Christchurch will become the epitome of suburban sprawl, in the same way as Atlanta, Houston and Dallas.
Not a pretty future for Christchurch...
Thanks for your experiences and opinions Chris.
We live one house back from the Avon River smack bang in Red Zone Avondale, a suburb soon to be halved. The Government's "Assistance Packages" (I use the term somewhat loosely) can be viewed in many ways, some people I know are rapt, they will actually become wealthier if they sell land and house to the Crown.They are in a minority however.
I know some bloggers are sick of "whinging Chch property owners wanting a taxpayer bailout" and also say, your own fault for buying dodgy land. You took a gamble, you lost, suck it up.I will be honest, when we bought this place 6 1/2 years ago I was more concerned to check the LIM for any history of flooding, I noted the high liquefaction risk but earthquakes in Chch weren't on my radar.
I did however take out Comprehensive Replacement insurance cover which I thought would offer at least protection from the financial implications of any property damage caused by disaster.
I am getting independent assessments of our property damage so as to challenge our upcoming insurer's assessment which we think will be on the low side. We are also banding together with other residents to get lawyered up. This may not be over just yet.
What, you may ask, am I angry at/about?
1. The condemning of many houses, including ours. Ours could be fixed with a new foundation engineered to withstand even larger quakes. We could pay for this out of a payout for land damage by EQC (I am assuming EQC does pay out money, we haven't seen any of it though). This is in my view an overreaction that ignores other solutions to the problems.
2.Government interference in insurance matters and private property rights, with absolutely no consultation with those most affected. The intervention I would have welcomed would be to force the insurers to man up and deal with claims in a timely and fair manner.
3.Central goverment letting local government off the hook, the CCC in particular. The incompetence and waste of this body I have personally witnessed since September and has been a real eye-opener.
We will eventually shift to the west of town where we were lucky to snare a good building site handy to our jobs for a price very similar to the LV of our current abode. Most redzoners will be a lot worse off than us. Option one or option two? A partnership decision of course but personally I would LOVE to choose neither, if we get a cash offer from our insurer better than option one, take that and try to wangle land damage payout from EQC, which wouldn't be out of the LV ballpark. The beauty of it is we get to keep our land by the river, I'd take the caravan on to it for holidays!That way, the government would have to find a DIFFERENT specious reason to take it off us.
I agree entirely Crooked Thumb.
Some parts of Avondale and across the river in Stour Dr etc are not that badly damaged yet are red zoned.
If there had been consultation, CERA could have identified who wanted to stay and rebuild and who wanted to go. The decision could then have been made on which areas were economically viable to repair.
In my view only the very worst pieces of land could not be repaired, it all just comes down to a matter of cost.
As I mentioned above the sad thing is that areas people will move to may be no better in terms of liquifaction as the areas they have forced from.
People need to keep the liquifaction in context, for instance Heaton St, Papanui Road, Queens Ave, Holmwood Road and those parts of town had considerable liquifaction despite shaking intensities being much lower than Avondale/Burwood.
Yet these areas won't be abandoned. The liquifaction is a problem that could have been dealt with if the owners of the properties wanted to stay.
Out of interest Crooked Thumb, have you received an EQC payout yet? I know there are many out in Avondale who haven't received anything from EQC yet despite their houses being like ski slopes and now in the red zone.
No payout except for a few hundred dollars for contents re Sept 4 event.
More snippets I learned today:
My case manager (insurance) rang today in response to emails- they will continue and renew my house cover here (in the red zone) but not cover the house we intend to build on the other side of town (green zone), nor can i transfer the cover. Has anyone any suggestions how I borrow the money to rebuild without providing the lender evidence of insurance? I suspect a lot of red zoners will take the option one money and leave town/NZ and I don't blame them!
Rang the bank to ask for rebuild finance. All positive (Note; insurer's phone call came later), a discounted rate available for one year for red zoners. All good but here's the snag, ONLY if you take up one of the Government's two offers. This is starting to reek of a jackup: the players = Govt (land grab) CCC (don't replace munted infrastructure) insurers (S & P reckons Govt. packages fiscally positive for them) banks (they get paid first).
Rang EQC re land payout, they couldn't (or wouldn't) tell me anything other than to get in touch with the Crown about it. Looks like a dead end unless one litigates.
By the way Chris, agree totally about Stour Drive. My brother in law lives up Brooker Ave, I checked on his place after Feb 22 as they were away on holiday, about a barrowload of liquifaction. Couldn't believe they were red zoned.
The biggest irony for me is that houses built in such a way to be economic to repair after THREE major quakes, such as ours, will become, according to Big Brother Brownlie as reported in the NBR Friday, too dangerous to live in as time goes on (that's his justification for forcibly removing us). His many talents include seismic forecasting, it seems. But its ok and quite safe to stay put for the next 21+ months, apparently. Its a bit like the Mayans - perhaps 21/12/2012 is the day our house becomes no longer safe to live in. Beam me up Scotty...
You have to laugh. I've already cried today.
This is a very typical story in the US dealing with the healthcare insurance industry. Makes me wonder if the NZ insurance industry isn’t taking a play out of the US play book of “extend and pretend”. In the States the insurance company will often extend the issue and wait the clock out. They will delay delay and delay some more. They want the owners to ether walk away, claim force majeure, or wait for the government to bail them out.
The only way out is for those effected to start organizing and force the government to take action and write the checks.
What I find disturbing is that people here in NZ seem to be conflating an appropriate insurance payout with bad luck. I don’t understand this idea that if you get caught in an earthquake then it’s your fault and you should pack up and move to Ozzy. What does some ones odds of being caught in 2 major earthquakes in 6 months have to do with insurers not preforming their legal obligation of paying their customers? And paying their customers also has nothing to do with rebuilding, they are also mutually exclusive. Insurers should write the checks to their customers who paid the appropriate level of insurance to allow them to make decisions. Just because they have a check doesn’t mean they will be rebuilding right away. The government could disallow building until its safe to build, at least the victims of this fiasco will have the funds to make more appropriate financial conclusions.
BTW this is already NZ’s Katrina. It’s too late to call it anything ales then a total government breakdown in the social contract. Victims should respond accordingly and march on Wellington.
I don’t own property in ChCh but I do own a leaky building so I can fully sympathize with the entre government fiasco. However, I would think the government would try and entice people such as myself to buy into ChCh instead of letting it quickly turn into a ghost town. If they don’t act quickly to find adequate reinvestment in the area ChCh will hit a critical mass where the community becomes unsustainable. Then it will be twice or even three times more expensive to rebuild.
Wolly, EQC cover residential property, it doesn't matter who (or what) owns it. So if a business owned 50 or 100 or 1000 houses that are occupied for residential then they are covered by EQC.
Likewise a tower block of say 100 apartments, means EQC will be liable for the first $11.5m for buildings, $2.3m for chattels and all of the land value if it's damaged too.
EQC's liabilities are in fact quite ginormous.
Holly molly...CJ....the EQC bailing out landlords...and there I was thinking Landlords were running a business and a business was expected to take out its own all risks insurance....no wonder all the National Rump and most of the Labour rump too are into property investment.....what a nuthouse.
The EQC website says it covers personal residential property
"Residential property is your home, its contents and the land immediately surrounding the dwelling. ".
http://canterbury.eqc.govt.nz/faq/coverage#t2n396
It is a bit ambigous as it does not include or exclude residential investment properties .
Are residential properties under LAQC considered as personal residential property or as a business ?
Morning all, here's Labour earthquake spokesman Clayton Cosgrove's latest daily update:
Local authorities in Christchurch and Waimakariri run out of insurance in two days, with questions about what would happen if another quake caused more damage. The Government has indicated vaguely someone will pay, but this issue has been around quite a while and should have been anticipated by Gerry Brownlee.
On the issue of personal cover, some companies are playing ducks and drakes and saying that if a house in the red zone is deemed repairable --- even if the owner has to move --- they will only pay the value of repairs and not for a new home.
This gives residents no choice but to accept the Government’s offer. Problems are emerging with that offer, however. The 2007 value doesn’t include chattels --- estimated to be $20,000 to $30,000 on average --- while constituents are also reporting a gap between their 2007 land value and what they will pay for an equivalent section.
Real estate sources tell me people are unlikely to be able to buy under $150,000, even though their existing value may be about $100,000. This means some residents could be up to $80,000 out of pocket --- it will be difficult for some in their retiring years to sustain a mortgage for that amount.
Another problem is that people moving quickly to a new property are finding their insurance companies won’t cover them --- so no mortgage can be secured and they are stuck. The Government could have foreseen and addressed these issues --- instead of at the 11th hour in the case of local authorities or, for residents, after last week’s so-called generous deal was announced. The Government must provide remedies swiftly.
Gerry Brownlee can do what I did in terms of insurance company project management contracts --- get the companies in a room together and nut out solutions.
Tonight’s CERA meeting in the Pines Beach Hall at 7.30 for Kairaki Beach residents is a crucial one. These residents want to know why they are now red zoned and toast a few days after rebuilding was due to start.
I’m disappointed only one Kaiapoi resident, Residents Association deputy president Linton Gray, is apparently on the community forum. He is a superb choice, but where are the others? CANCERN’s Tom McBrearty is living in the district temporarily, and will add his voice, but as Waimakariri Mayor David Ayers says, the 2.6 per cent representation doesn’t equate to Waimakariri’s 11 per cent of the region’s population.
Thanks Bernard and Alex for giving me my own post without having to hi-jack it!
Just a note for readers; I wrote the comments above as emails, so perhaps it does not share the eloquence of other articles written on the website, but it does convey the the frustration.
Also, just to clarify, I said NZI had done nothing on one property inspected about 9 Sept. To make it clear the assessor has returned to the property since that date and NZI sent an a 23 year old engineer out (possibly to give them an out if Civil Defence demolished it - I don't think I'm being cynical), but they have done NOTHING to suggest a plan for repair or an offer of payout, so at the moment we have no idea whether they are contemplating repair or rebuild.
Of note on most of the severely damaged properties we have done a large amount of work ourselves to prevent further damage, including bracing walls, removing brickwork and chimneys that were part collapsed and repairing roofs, the insurance companies have had little interest in doing these sort of repairs.
CERA is gonna heavy the CCC on land prices: the Press article is a thinly veiled 'or we'll send da boyz around'...
And I've submitted to CCC Daft Annual Plan (spello fully intended) to suggest that they waive all Development Contributions for 5-10 years, and that this apply to all in-process subdivisions. Time to stop the crazy compounding of CCC-imposed costs, paid for by the hapless purchasers of new sections. DC's had gotten up to 10% of rates revenue levels last year, and this year these bozos think that there will Still be DC revenues to salt away!
But reality (and CERA) has struck. Couldn't happen to a nicer Clueless City Council.
Waving DCs still doesn't guarantee low land prices on new residential land.
I would think it better if central government advertised a tender to purchase unsubdivided land - and landowners put forward their best offer to government for the land. Then CERA and the CCC can join forces to subdivide the land and get the services in at cost (i.e. without a profit motive).
Sound like some landbankers I know! :-)
But isn't the ultimate competition pitting fringe landholders against one another in a closed tender by government to purchase only what is needed and thereby consolidate new residential subdivision (at a no profit margin) - as opposed to your alternative which would see local government potentially providing the necessary infrastructure everywhere?
Clearly with respect to infrastructure insurance issues which face local government going forward - planning and consolidation become more important than a scatter-gun, free-for-all de-zoning which you promote?
I appreciate your arguments may have had merit in the past when developerment was responsible for the cost of growth where infrastucture was concerned, however, Christchurch is in a very changed environment now. I am just not confident that market mechanisms will necessarily be in the best interests of the rate/taxpayer.
Hugh - you didn't 'deal with' anything yesterday.
You came out with some lightweight, sneering, putting-down from an assumed above, nonsense.
I've suggested you get educated, and pointed you at physics.
Chosen ignorance, regardless of the confidence it's backed by, is still ignorance.
Start with the IEA's unprecedented unleashing of oil reserves. Ask why. Ask what difference 17 hours supply will make, and what happens at the end of the period? That's your trucks, Hugh. Your roads. Your plastic pipes. Your delivery of everything else.
I - as Ive pointed out - can teach anyone you want, how to build cheaper, more energy-efficient houses than you've ever seen. Nobody needs to be 'taught' anything in this country - don't automatically think (?) that because folk don't go along with you, that they're useless.
Contemplate the possibility that it may be the other way around.
Being a Malthusian is seriously grim stuff , Hugh ........ PDK is forced to see a " Wigan Pier " or a " Down and out in Paris & London " Orwellian horror existence . Anything better than that would defy their creed of gloom , doom & despair .........
....... be grateful that our colleague PDK isn't a Hickeynesian ...... they are appallingly sad muppets , that lot .
So , $ 80 000 sections are available around Rolleston you say ... . Now this is a step in the right direction , towards sensibly priced housing .
Excellent . More of this , please !
But Hugh, you're the first to point out that developer's cannot afford to pay for the cost of infrastructure growth (as per the current intent of Development Contributions policies).
Why then can they not afford this cost?
I'll give you a hint - because of all the reasons PDK puts forward.
If you can provide another explanation - I'm all ears!!!!!
What you are implying (local and central government bears the full cost of all infrastructure related to new growth and development) certainly works best for development, but not so sure for existing rate/taxpayers.
I suspect under your system, what presently is reflected in the price of a section would simply be transferred and reflected in taxation.
The real problem comes back to PDKs point - growth for the sake of maintaining a "competitive" market is becoming uneconomic no matter which way you attempt to pay for it. It is a sign of the times.
All very good points - particularly agree about the life of most infrastructure being beyond 20-30 years - which also leads into the subject of the (ripoff) rate at which council's depreciate infrastructure assets (but that's another matter).
Don't know however whether the state of our capital markets would see it work here - didn't we see it reported that some LA was looking to offshore such an offering?
Hugh - I don't give a rat's arse what you 'buy into'.
And if I was not sure, the calibre of your support would certainly help me become so, rapidly.
You have so many pre-held mindsets, so little eagerness to learn, ands such an ability to denigrate via typecasting, it just amazes me.
An 'crying'?
No, I'm a bit more pragmatic than that. I enjoy my life, my friends and loved ones, and always strive to experience, grow and learn.
I think what does annoy me, though, is that the planner is indeed right. As was Jane Goodall - but I'd never expect to see someone like you at one of her lectures. Our offspring are going to have to bear the cost - the real physical cost - of the arrogance of your kind. And mine, to be homest - the difference is that I'm attempting to mitigate the damage, attempting to educate, and demonstrating how to live - comfortably - a low-impact life.
Me need to lighten up? Maybe someone needs to think.......
Notice FCM, saying they've come to the conclusion I already had somewhere hereabouts - that the existing houses would be an obvious resource in the relocation. I think I said "a stud is a stud is a stud"......
Thinking is good.... :)
I repeat my question too: how long has the 3x median multiple held the status of the nicene creed?
Heh, Hugh.
As my starting post on this here thread noted, Roger Sutton has made a statement which will have most of the CCC plannerista polishing their CV's. None of the armchair theorising round here matters: it's the landowners, the playaz like Ngai Tahu, the financiers like Foodstuffs, and CERA who will drive all this.
Y'all may have noticed that, via GETS, CERA placed a short-fuse RFI (closed June 27th) for 'interested parties' to lodge advice as to:
- what land was in the course of subdivision consent or close to that, or proposed
- areas, numbers of sections, timeframes
- what constraints lay across the path of getting these subdivs on the road (as it were)
- what, in their humble opinion, needed to be done to clear away said obstacles.
Now, if youse all don't think that's a wake-up call to the Clueless City Council, I have an only slightly tilted Ferrmead apartment block to sell you.
And RS has made it crystal clear only a day after that RFI closed, , via the media, that the BAU wishes of continuing planning revenues and relevance on the part of CCC (and any other TLA stupid enough to hold out on the matter of land prices and their culpability in keeping 'em high), will receive a taste of his 'extraordinary powers'.
Oh to be a fly on the wall of the CCC.....
I may be on the wrong track here, but isn't ChrisJ mainly a landlord in Chch?
My investments are mainly in the stock market. I am careful to spread my investments around - different kinds of businesses & in different locations. If I was too concentrate my investments too much in one area, I wouldn't expect rescue packages. Landlords are in the same boat.
I am totally sympathetic to the residents of Chch (including some relatives eg brother). But it seems to me that landlords should carry out due diligence when building their portfolios.
Cheers to all.
I do have properties in other cities as well Philly. However being based in ChCh a large portion of our property is here.
Clearly this event is on a scale not normally seen in Western countries during the past 50 years. (For it's size ChCh has much more damage than New Orleans had from Katrina, or any major city struck by earthquake (even in Alaska, Japan or Chile). Only cities struck by Tsunami's would probably have seen more damage).
I have no problem with the damage we have suffered, it's just that I would like the insurance paid out in a reasonable timeframe.
In fact we have about a dozen building sites in the city that are ok, in addition to sites on which there are buildings that are likely to be uneconomic to repair, so we will probably benefit from the decision to abandon parts of the city, however I still believe that it was a decision based on expediency rather than sound judgment.
Residential Properties are covered by the EQC whether they are rented or used as a PPOR. When someone who has a rental property insures it as part of the policy they pay EQC and Fire Levies to the appropriate level.
How can this can be construed as unethical behaviour or in any way ripping off the system?. It is the law of the land.
Who said anything about it being unethical or a rip off...nobody ...but how is property landlording as a business any different to any other business providing a service..?
Were I a business owner in CHCH looking at receiving a big finger from EQC while the bloke across the bar is happy as because his rental empire of properties are backed up by EQC..I would be pissed off. I pay insurance too. So why am I told to eff off.
But you get pissed off fairly easily, Wolly. You will find residential rentals a bit different from other business activities, can't claim GST etc. But you might be on to something where the rental house(s) were owned under a company structure. Does anybody know what the story is there?
Wolly :
The difference is one has paid a premium to the EQC and have a contract for insurance with them and the other doesn't. They paid a different insurer for appropriate cover. EQC cover isn't a free hand out it is insurance bought and paid for. The bar owner just pays a private insurer for the same type of cover. We have both rentals and business premises and they all need to be insured to cover the relevant risks. You can't contract out of the EQC payments they are mandatory for the rental.
Property investment is treated differently in a number of ways from running any other business. You can't claim depreciation for instance. Most people don't understand residential property and in a rising market spruikers sell it to them on the basis of Capital Gain. In Christchurch the market has been flat at best since 2007 so when the spruiked get their small tax refund from their normal day job based on their rental losses they don't understand that they have lost a real $1 to get the 33c refund. They are subsidising the tenant in the property out of their own pocket. Don't worry though, you'll get your wish and many evil Christchurch landlords will be cutting and running once they finally get their insurance payouts, leaving Housing NZ (tax payers) and the CCC (rate payers) to provide all the much needed housing.
Gosh thanks LAJ...like I didn't know all that....you skip over the part about property investment being treated differently so quickly...please tell us more...why should it be different?
Most landlords including mine are bloody good people. I just wanted to know why the difference had been established. What if a similar business such as a private medical centre, were to ask the EQC to provide cover...would they be refused...on what grounds?
Is there anyone who is (or knows of) a soil physicist or soil engineer who can expound on the possibilities of remediating the land (for and against) in the red-zone - is it possible to drill down to bedrock - and sink foundation piles that can be drilled down to a solid base then use slab foundations for housing on top of those - is the land in the red-zone completely useless? Gone forever? Haven't seen any discussion on this.
No Icon...it's all BS. The land structure for hundreds of metres down is a hodge podge of mud gravel water silt and Dinosaur bones. It is stuffed. There is no bloody "bedrock". Your best bet is to build something you can cart away on the back of a truck or float down the Avon.
It's been covered by the sea many times and will be again. They had a bloody good Tsunami there in the 1860s I think..swept up the port and made a real mess...I think some bloke who had lost his toolkit over the side was able to walk out and pick it up the next day!
Not sure where that Tsunami went, round the corner from Sumner north...must be some record.
That was August 1868 Wolly (you were still a youngster then weren't you?). The earthquake was a M9 in Arica Peru (now Chile). The wave in the harbour at Lyttleton was 7m high. At Little Akaloa the water went out to where it was normally 5m deep, the first wave struck in the middle of the night (but that was not the biggest one) 2 families in Little Akaloa only just got out in time when the water was knee deep in their houses. It doesn't sound like there was much damage along the New Brighton coast or Sumner possibly because these areas were largely unoccupied. Banks Peninsula was affected more by the waves being funnelled into the bays. No one was killed in NZ, 1 was killed in the Chathams though.
Interesting ChCh had a M5+ centred in the city less than a year later in June 1869. There was a small quake on Boxing Day 1868 centred in Lyttleton (possibly M4.5), and a large quake in 1870 M6 centred apparently in Lake Ellesmere (however newspaper reports of where the quake was felt make me feel that it could have been centred closer to the city possibly on one of the currently active faults?
There were quite a lot of quakes felt in ChCh from 1868 to 1872.
It's interesting that the recent series of ChCh quakes also started just months after an M8.8 in Chile and a small tsunami in Feb 2010.
Of course ChCh was also greatly affected by the 1881 Castle Hill quake and the 1888 Hanmer quake (the tip of the Cathedral Spire fell both times).
I remember it well CJ...dam horse refused to budge until the shaking stopped. Man did we grab a bundle of fresh fish that morning..big fat things they were too...but we turned our noses up at the crawling things with armour plate...the sod from the church said they was the Devil's food.
Attention Wolly .. you've got to arrange the dinosaur bones vertically.
There is a solution to liquefaction - watched this engineering documentary last night and it deals with the problems of liquefaction - have followed the CHCH problem all the way through and considering it's now almost 12 months since the first quakes, surprising there has been no mention of it .. surely something is amiss .. the video is available for 6 more days ... if it's nothing new and everyone knows about it I apologise for being redundant.
I understand the foundations of all the multistory buildings in the CBD of New Orleans are on floating piles - no bedrock there at all. Its subsoil is also the reason they bury everyone above ground there. Googling construction techniques there might get you some answers.
I'm no engineer, but my understanding isthat there have been many holes drilled into the ground in red areas to see if there is any bedrock or solid ground. Some areas go 40M + without hitting anything solid. It was one of the criteria when looking at zones. Anyone claiming they can easily rebuild in the red zone should get their own ground reports to prove this is possible.
There is no bedrock close to the surface under that part of ChCh. Bores up to 200m deep still hit layers of peat and gravel/sand intermixed. This suggests that the land has been sinking for some time given that sea levels were no more than 100m below present level in more recent ice ages. And as we know that the gravels are relatively recent deposits and the peat must have formed on land then the Canterbury plains have probably sunk something like 100m+ in the last few hundred thousand years.
Should we be concerned? Not too much, Auckland has been thoroughly covered in molten lava flows many times over the same periods!
Clever engineers can always come up with solutions - it's just some haven't proved particularly clever recently.
Obviously heavy buildings performed much worse than others. A 3 level concrete tilt slab building in Peterborough St sunk 700+mm yet the single level garages just metres away were down just a small fraction of that.
A solution could be to think about how to make sure the buildings don't sink. This could be done with say a half a metre excavated a 2m rib raft grid formed with 2m x 2m x 0.5m polystyrene blocks reducing the weight of the building - hence the building might weigh about the same as the volume of ground excavated so will float. Of course drive a few strategically positioned piles into the ground below the rib raft to stabilise the building and assume lateral spread has been dealt with in the form of retaining structures then the house should be ok.
The alternative to build very large compacted base course rafts over entire suburbs is also a solution that could be used, but these would need to be very large say 3 or 4m deep and may still sink over time.
"rafts" - that's the word. It's my understanding this approach is used in areas of The Fens, East Anglia, England, The Fens is a reclaimed seabed. No eq issue, but so called 'running silt' and peat shrinkage is a problem. It's not rocket science, it could be done in ChCh so we could continue to use at risk land many would (should?) not touch with a barge pole. (I was told of a case where a fuel station found it's new underground tank floating on top of the forecourt concrete after 24hrs due to upward pressure from running silt and poor installation.) Happy googling. Cheers, Les.
one two three four five six....quiet.... I gotta get to ten before I post a bomb....seven eight nine ten.......
"More than $2.8 million will be paid to consultants to work on the Christchurch central city plan.
The Christchurch City Council has defended the appointment process for the consultants, who have been appointed without the approval of councillors." stuff.co
Harrrrrrrrrrrrrrrhahahahahahaaaaaa...splurt yurk..
I"m here in Cairns and I can tell you the poor buggers in Tully etc are also having issues with some insurance companies dragging the chain in paying after cyclone Yasi.
As for the roads being fixed if you want to make a far northern Queenslander get fired up just ask them why the state gov has not built a road/rail link that can weather the annual floods and cyclones.
After every event places like Cairns tend to run out of necesseties due to the roads/rail being severed in low lying areas.
Same thing in Hamilton Wolly. A new $65,000,000 events centre. The catering rights were never put up for tender. Handed to Montana Catering, the same firm that the Council gave the catering to for Rugby Park, the ITM V8s and other functions. In my books it smells like something underhand is going on in Hamilton.
Its a fact Wolly. 65 Million! Another debt of $32 Million for the V8s. The council got zilch from this years running of the V8s. Wet weather put paid to any return on $32 Million! The Hamilton City Council are now close to breaching their debt ratio limits. Their debt is forecast to reach $445,000,000. (Thats Millions Wolly) by June 2012. As you well know Wolly, none of these councillors will ever be on the NBR Rich List but they love spending money like they are on the list.. Same breed as the deadbeat turkeys in the beehive.
Nah, no sweat Wolly, all is well in Hamilton. 8% rate increase thank you very much. Us councillors know what we are doing, we are all top business leaders. Pillars of the community you know. See you for canapes and drinks at the next opening of some new money wasting project. Maybe the Garden Place new upgrade for $13.2 million with its new un budgeted $60,000 sound system playing 60s music to chase the undesirables out of there. Its all true, believe it or not.
I see the insurance companies are now talking about relcoating the existing houses (it was suggested to my mother) if they can be.....so CERA will be buying land and putting in there own subdivision as I doubt any of the new subdivisions will let relocatable houses on them....interesting
Bulldoze the port hills flat and build up there. Cera Heights!...Brownlee Heights...Gerry Avenue....Key Views....
Buy the farms. Cut the top off. Use the fill to raise the land where the new "red zone" bush will be planted. Bung in the road and services...should be easy...lift the new suburb above the smog...shove in a road down to the port and a cable car of epic size down to the plains to link with a real bus depot and a new rail station...plant trees and tell the CCC to bugger off.
FCM - I'd been thinking along those lines too - can't see the developer types wanting to miss out on the on-charge of new materials.
Somewhere back a ways, I pointed out that this was a replication exercise, and that all the materials already exist, masonry being perhaps the exception.
Logistics, expended energy and time says that recycling is the way to go.
For the most part I can't see peoples resistance to the conservation of embodied energy.
Only excpetion is poor design, but that is doesn't work if you are replacing the bad design with another equally bad.
Of course we really have to look at our building techniques so the facilitate recycling. It is starting to happen though, in petrol stations of all things. Lol.
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