[As published in July/August BayBuzz magazine.]
“Hurry up and wait”, was how one person described the Government’s announcement about the voluntary buyback scheme for those with properties designated as Category 2 and 3 – a little bit of assurance, but not nearly enough for those most impacted by the February floods.
While we now know that these properties will be bought out if owners choose to go that route, that’s all we know. At the time of writing, we don’t know how properties will be valued for any buyout, where the owners will go, or even if their properties will stay in their initial Category. Only properties in Category 1 are definitive, while Categories 2 and 3 are provisional decisions.
By mid-June, these properties will have either been moved into a lesser category or made definite, depending on the results of two peer-reviews being undertaken by engineering firms on behalf of the region’s councils. The categories were decided by a group comprised of insurance companies, regional council flood mitigation and protection experts, and inspectors who initially stickered the properties. This means that some property owners sitting in Category 2 could be moved into Category 1, and that properties in Category 3 could move into Category 2.
At the same time, councils are now ready to begin negotiations with the Crown for the region-wide recovery, which will include what councils can contribute to the buy-back scheme, which is a funding arrangement with Wellington.
Hastings District Council Mayor Sandra Hazlehurst says the district faces enormous financial constraints.
“We have just spent nearly $100 million on safe drinking water and we don’t have the balance sheet to contribute a great deal. So this is what the conversation needs to be about, a holistic view about what our recovery looks like and how we afford it.”
She points out that out of the total amount the public pay for taxes and rates, the lion’s share is tax at 98%, while just 2% are rates.
“We have got our negotiators ready to go,” she says.
Hazlehurst says the chief executives of HBRC, NCC and HDC are about to commence a round of 23 meetings with local communities for people in the various categories so they can be brought up to speed on all the information, starting with Esk Valley and Pakowhai. One-on-one meetings with Category 3 property owners are also being scheduled.
“The community feedback is that they are pleased that they have more certainty for their futures, and a sense that despite what the outcome is that they are ready to move on with their lives. And because this is very much a preliminary category there is an opportunity to get in front of our community and see whether they are in the right category or not,” Hazlehurst says.
Not everyone affected feels the same either. Some people will settle and move on happily after what was an extremely traumatic event, while others with intergenerational connection to properties may feel more conflicted. “Some will want to stay put,” she says.
Napier City Council Mayor Kirsten Wise says money spent on repairing stop banks had run into the hundreds of millions, but since they form part of the mitigation plans for Category 2 properties, this will probably allow 173 of Napier’s 179 Category 2 properties to move into Category 1. Certainty will only arrive between late June and mid- July when geotech evaluations of stop bank repairs are due back, she says.
Esk Valley nuances
An Esk Valley resident whose home was not flooded while parts of their land were, says being put into Category 3 has been stressful. She has no intention of moving on from the area, and there are well over 10 properties in the same situation.
Speaking anonymously due to concerns about the impact on her business – she doesn’t want anyone to think they aren’t trading – she says the whole of Esk Valley was put in the red zone, regardless of whether their homes were flooded.
“We are upset because there were lots of people in the valley where it was black and white. We are putting our properties back to normal and don’t have to rebuild because our homes weren’t touched, but we might be told to go anyway.
“Our next concern is that [after Categories have been confirmed], are they just going to leave this valley to be one of the last ones they address because there aren’t going to be many of us left?”
While the buybacks are voluntary and people can’t be forced off their land, the Insurance Council has made it clear that it’s very unlikely they would be able to be insured. This is because Category 3 designations are in places deemed to carry an intolerable risk to life and safety.
But the Esk Valley resident has already spent a lot of money getting the property back into shape.
“We are so passionate, we are going to get it back to a beautiful valley,” she says.
The sentiment is widely shared by neighbours in the same position, none of whom would leave without a fight, she says. “It would definitely go to court. People whose houses were not anywhere near the flood but their land was. Anyone I’ve talked to would fight.”
Mayor Hazelhurst says being in Category 3 and choosing to stay carries risk beyond insurance, however. The likelihood of building consents and bank loans to rebuild being granted would need to be considered too. Risky business.
Glenn Bond and his family, who own a lifestyle block in the Esk Valley, don’t want to leave either. They were provisionally zoned Category 3, but their property is over several topographic levels – lower parts are in the orange zone and the house itself was out of the flood waters in Gabrielle.“
The question is whether or not you can have a dual-zone property. What we think would be a reasonable position on the part of the council, is to say that if your property is over more than one geographic level, that it is reasonable to have a part of your property on which you agree not to build any residential dwellings. But if you have a house up in the green zone, then you can live there. That’s what we are pursuing.”
However, he says it’s not clear from the communication whether that is the way decisions are being made.
“We are putting all our eggs in that basket that we will be able to stay, because we have an old villa that has survived the quake, survived the 1938 floods and survived Gabrielle intact and in good shape. It’s preposterous to us that we would not be able to live here, given that we were safe right through Gabrielle in our house even though the lower parts of our property were anything but safe,” Bond says.
The first community meeting in Esk Valley with the region’s chief executives that took place on June 6 appeared to suggest that the intention was to be sensitive to those nuances, and that planning permits and zoning arrangements might allow them to keep living there, he says.
“We took some confidence from that, in our particular situation. Obviously, that doesn’t help people who were completely in the flood zone.
More recently Bond, tells BayBuzz that HDC staff have visited his property and at least now have a more informed firsthand view of his situation. Council officials have always said that such individual reviews would be taken of Category 3 properties.
“It’s been a strange feature of this experience for people in our position. We don’t know whether to feel really lucky or really unlucky. We have experienced our own loss and anguish, but we don’t want to ask for help at the expense of those who have lost more or been through greater trauma than ourselves.”
Good policy?
Auckland University of Technology associate head of the School of Future Environments, Professor John Tookey, says there are always grey areas in situations like this, and appeals are inevitable.
Was the buyback scheme a good policy?
“Absolutely. It’s rare for me to say a government policy makes a lot of sense but in this instance it does. The second question is does it go far enough? There are going to be further conversations about the borderline cases and what constitutes each one. It becomes extremely nuanced.
“I think it’s likely to be expanded in the future, the scope of it. Because of the grey area aspect of what we are talking about here, parties will have taken an initial estimate of what the cost of dealing with it is going to be and will have expected a level of inflation to be added to that value. And that is presupposing that there are no subsequent events over winter, considering the saturated ground. Any severe weather could be consequential.”
After that, it will be time for “big bad decisions” to be made about what kind of development takes place, what they constitute and where they go, Tookey says.
Engineering and design features will need to be considered. For example, requirements could include redevelopments to build two-storey high homes on piles with blow out walls designed to cope with future weather events, or the installation of grey water run-off tanks to attenuate storm water pulses.
But there had been no decisions yet about where people will go, Mayor Hazlehurst says. There are about 2,000 sections across the region at various stages of availability and readiness, she says.
“Housing has been a big focus through our place-based housing plan, and we will have our first inner city living apartments starting construction soon. And so there will be various options for our community. Not everybody is going to be ready at the same time. Some people are still renting or staying with friends and family. Some have already bought a new house while they are waiting. No two people’s situations are the same.”
Tookey says historically, an agreed market valuation is made based on mean house valuations, rates and QV values.
“They’ll take a swatch of those. In those areas what is the actual valuation? In some cases, zero. So, it’s an historical exercise to come up with a solution. Some people will be happy and say thank you very much and others will be hacked off. Inevitably with the level of debate and discussion that will take place, there will be a significant number of claims.”
I asked him how the funding arrangement between Central Government and councils was likely to fall for the buyback scheme. While there would be a lot of pencil sharpening going on, he suspected the bigger percentage would be taken by Wellington. Councils did not have sufficiently deep pockets to cope with the numbers and furthermore, the ratepayer base had already been heavily depleted and their ability to generate revenues for the future was diminished. “It doesn’t pass the smell test,” he says.
“On one hand, government has to show that local groups are taking initiative, providing some level of contribution. But at the same time, I can absolutely imagine them realising that this is a non-starter and giving them a quid pro quo – additional funding for various projects. The government has many different pots of money. And then you’ve got the wider agencies like Waka Kotahi [that can contribute]. So are we going to see a significant expansion of funding around roading solutions in the region – an invisible subsidy?
“There’s political positioning and showmanship and a whole bunch of things [that will go on]. My suspicion is that the decision has been taken with relative haste and in this particular set of circumstances – and I usually have very cynical positions in regard to the motivations of our representatives – this seems to have been done rapidly and for the right reasons, a bit of a shock to the system.”
Glenn Bond reached out to BayBuzz again just before the magazine was due to go to print with some good news. After his one-on-one meeting with the council, the family home had been downgraded to Category 1.
“We are obviously really pleased with the re-categorisation. After the uncertainty of the last few months, and the more intense fear we have lived with since our provisional red-zoning, it’s a great relief to be able to once again plan a future in our home. I can feel my back straightening.”
Bond said in the last few weeks all three councils had stepped up and done what they said they would: work promptly on pragmatic solutions so that landowners could remain where they were, where safety could be demonstrated.
“Casting our eyes ahead, we are trying to imagine a time where the community has recovered.
“At present it is still pretty bleak. Upturned cars and broken buildings still litter the valley floor. We are consciously trying to look past that to see the valley how it once was and how it will hopefully be again.
“Right now, though, our thoughts are with all the families and businesses that cannot safely remain in the flood zone. We recognise the clean-up needs to wait until those people have been supported to move on with their lives.”