Demolition costs for Category 3 properties and who pays became an item of heated discussion as Hastings District councillors debated the pros and cons of the cost falling on ratepayers or homeowners.
On February 1, the argument came down to whether Category 3 property homeowners paying towards the cost of demolition and saving the council $2m was worth the crippling emotional and financial cost the homeowners had already incurred; and whether it was fair and equitable to pass the cost onto ratepayers.
At the end, the council sought more information, the report was tabled and no formal vote was taken.
Eskdale Holiday Park owner Dan Gale spoke at the council meeting on behalf of Category 3 homeowners.
“We are tired, frustrated, angry as Hastings District Council shifts the goalposts,” he said.
“We were repeatedly told the demolition costs would be covered by the council. There are no winners in this situation.
“We are hanging by a thread, suffering from depression, suicide, marriage break-ups. Is saving $2m really worth it? As another homeowner said, ‘we have paid with everything we had, some paid with their lives, how much more of a contribution do you want.”
The purpose of the report was to consider amending the Category 3 Buy-out Policy to enable the Council to recover a contribution from property owners, in certain cases, towards the cost of demolishing a dwelling (if relocation is not an option), and to enable minor changes to allow for a more efficient offer process.
The cost of demolishing dwellings and other residential improvements falls on the Council, as the Government decided not to contribute to these costs as part of the Cost Share Agreement.
In total, demolition costs are likely to exceed $6 million.
Since the Policy’s implementation, it came to light that, in some cases, the insurance proceeds a property owner received far exceeded the market valuation of the residential improvements, sometimes nearly double.
Additionally these property owners were also eligible to receive an offer from the Council for the market value for their land (for properties under 2ha), or a Relocation Grant (for properties over 2 ha) which compensates property owners for the residential use rights associated with the property.
This raised a question as to whether these property owners, having been well compensated, should make some contribution to the demolition of the dwelling(s).
Currently, where property owners are fully insured, the insurance proceeds are likely to include an allowance for demolition.
Under the current Policy, the property owner retains that allowance, yet the cost for demolition falls on the Council and ratepayers.
Mayor Sandra Hazlehurst said it had been a “hugely hard” discussion, especially this close to the one-year anniversary of the cyclone.
“It’s about fairness and equity … it is clear we need to have more information and answers to questions posed to the voluntary buyout officers. The item is tabled.”
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