Auckland Council looks at rule change to avoid flood buyout costs

Source: Radio New Zealand

There are 13 Auckland homes at risk of future flooding or landslides that could cost the region’s council an extra $14 million to buyout – a cost it is seeking to avoid with a policy change.

Auckland Council wants to increase the amount it can spend on retaining walls and lifting homes to make them safe – a move it said would be more cost effective than writing them off.

The houses were eligible for a buyout because the cost of building works was over and above the scheme’s agreed funding but that would leave council with a hefty bill.

It was one example of homes still in limbo three years on from the devastating storms in 2023, while close to 1200 with intolerable risk to life had been bought out.

On Tuesday councillors would discuss a report by council’s head of strategy and integration Tanya Stocks and recovery specialist Megan Howell recommending an 11th hour policy change to the scheme.

The change related to homes in the risk category 2P, of which 75 were in the early stage of having building works costed out in order to reduce risk to a “tolerable level”.

“Thirteen of the remaining 2P properties may exceed the grant threshold of 25 percent of the capital value of the property,” the reporter writers said.

“If this occurs, the Category 2P Property Risk Mitigation Scheme terms provide for the properties to be recategorised to a Category 3 buyout – even where the exceedance is only minor.

“This would…increase total programme costs, by up to an estimated $14 million, which would be significantly above the agreed co-funded budget.”

Instead, Stocks and Howell recommend almost doubling what could be spent on building works to reduce risk to those homes – a cost that could mostly be soaked up within the scheme, leaving council with an estimated $1.2m to pay.

“Staff recommend that the Governing Body approve a policy change for the Category 2P Property Risk Mitigation Scheme to allow for grants of up to 40 percent of property capital value, at the sole discretion of the council in cases where it is assessed as the best option to achieve the 2P scheme objective and outcomes,” they said.

“This will remove the need to operate on a case-by-case ‘by exception’ approach and will remove the option for homeowners to choose to move to Category 3, even where there is a feasible mitigation for their property.”

If it was agreed to, any of the 13 homeowners who preferred a buyout would need to ask for a special circumstances review.

“Owners may be reluctant participants, with a preference to move to Category 3 buy-out due to reasons outside the scheme’s objectives (such as risks of nuisance flooding, potential lower property valuation and reduced development potential under Plan Change 120),” the report writers said.

Tasha Gray is part of the Disaster Affected Residents Network, formerly known as the Auckland Stickered Residents Group, and is concerned about the proposed change to the scheme.

“There’s a real awareness that 2P [homeowners] are becoming more reluctant to go over that 25 percent [grant limit for building works] because they’re more aware of the risks for their property after this whole process has gone through.”

She said it had already been a long wait for homeowners.

“The implications for those people could be quite serious, there’s a lot of mental stress for people who are in this process. This is nearly three years of absolute pain and trying to be logical and work through council processes,” Gray said.

“To put this late change in the mix is increadibly distressing for those homeowners.”

Nina Mardell is also a member of the network and said it appeared to be a financial exercise.

“It feels unfair that they’ve got to the end of the process three years down the track and not everybody is being treated equally. I do understand that they’re running out of money but the people at the end are disadvantaged because the pot of money has run out.”

Waitakere ward councillor Shane Henderson said he had asked for more information ahead of the council meeting.

“I’ve been told that probaby the majority of people in that situation would prefer to be bought out because you’ve got insurance issues, you’ve got the trauma layered on top of that whenever there’s a heavy rain.

“There’s people out there who just want to get out of their homes and I totally understand that.

“The proposal is brought about by the financial constraints of the scheme

“We’ll have to find some new money if we don’t make this change, it’s not apparent where that will come from yet. The flipside is people are desperate to move on so it’s a very hard decision.”

Council’s group recovery manager, Mace Ward, said the cost of work on properties to reduce such risk had varied and until now, council had used discretion case-by-case, which was provided for in the scheme.

“But over time, we’ve seen more homeowners prefer a buyout instead of wanting to complete the mitigation work at their property,” he said.

“With many of the Category 2P properties still finalising mitigation design and costs, there is risk that properties shift unnecessarily into Category 3, which increases the overall cost.”

Ward said the proposed change to the scheme provided a clearer path to resolving the remaining Category 2P cases in a reasonable and safe timeframe – council would have full discretion to approve grants of up to 40 percent of a property’s capital value.

“This will keep us focused on the best overall solution to address intolerable risk to life as soon as we can, while using public funding carefully,” Ward said.

“We will continue to work closely with Category 2P homeowners through the process.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand