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Government will buy 5,100 Christchurch homes

image Residents have nine months to consider the Government's offer.

(UPDATED) Prime Minister John Key today announced that the Government will buy 5,100 of the worst affected insured homes in Christchurch.

Treasury conservatively estimated the net cost to the Government to purchase all of the 5,000 properties currently in the Red Zone would be $485m to $635m once it had received payments from EQC and insurers.

The final costs are still to be determined. Factors that may alter the final costs include the take-up of the offer, government property valuations and proceeds from insurers. The costs are expected to be met from the Government’s $5.5bn Canterbury Earthquake Recovery Fund.

Key and Canterbury Earthquake Recovery Minister Gerry Brownlee today released a map of the areas of greater Christchurch where the land is unlikely to be able to be rebuilt on for a considerable period of time.

“Since September last year, the government has been working to provide certainty for residents, while recognising many people have their life savings tied up in their homes,” Key said.

“Today we have released the most up-to-date information we have about the state of the land in greater Christchurch.”

The fate of another 9,000 homes is at present uncertain with more work required before any definitive answer can be given regarding whether they can be rebuilt or not.

The Prime Minister said this was due to the ongoing aftershocks that Christchurch has been experiencing, specifically the June 13 aftershocks, or because further work is required on whether land repair is practical.

The price offered for houses in the Red Zone would be the rating valuation, from 2007, that applied before the September 4, 2010 quake, less any built property insurance payments already made.

Key said the government hopes to be able to come back to residents in the red zone with an offer of purchase within the next 8 weeks. Residents will then have 9 months to consider the offer.

The city has been split into four zones, Red, Orange, Green and White. People can go to www.landcheck.org.nz to see what zone their properties fall in.  

Key said that in the meantime, if residents wish to leave their badly damaged homes in the red zone they should talk to their insurers about accessing any unused portion of their temporary accommodation allowances immediately.

He said the size, scale and complexity of the issues the government has been dealing with following the earthquakes means it has taken some time to get information to residents.

“Each subsequent earthquake since 4 September has made an already large and complex challenge more difficult.

“To put this in context, Treasury has estimated the combined cost of the first two Canterbury earthquakes to be equivalent to about 8% of New Zealand’s GDP.

"Damage from the 1995 Kobe earthquake in Japan was just over 2% of Japan’s GDP, Hurricane Katrina in 2005 cost about 1% of US GDP, and the March’s Japanese earthquake and tsunami disaster was an estimated 3-5% of Japan’s GDP.

"This has been a major event and the government is committed to getting things right for the people of Canterbury. We're moving as quickly as we can to give some certainty to those affected," Key said.

 

Earthquake_Residential_Red_Zone_Map_308904900.jpg

 

View the interactive map here.

Cera Land Information Map attached below.

Red Zone:

Properties that fall within the Residential Red Zone, totalling around 5,000 properties, will not be rebuilt or repaired because the land has been so badly damaged by the earthquakes it is unlikely it can be rebuilt on for a prolonged period.

For people who owned property with insurance in the residential red zones on 3 September 2010 there will be two options:

·The Crown makes an offer of purchase for the entire property at current rating value (less any built property insurance payments already made), and assumes all the insurance claims other than contents; or

·The Crown makes an offer of purchase for the land only, and homeowners can continue to deal with their own insurer about their homes.

Orange Zone:

Properties that have been tagged Orange require further assessment, either as a result of the 13 June earthquake or because further work is required on whether the land repair is practical.

CERA will continue to work with other agencies to help ensure that properties that are zoned orange will be properly assessed. Announcements will be made when the next series of assessments have been undertaken.

Green Zone:

Land classified as green means that homes are suitable for repair and rebuild.

key points to note are:

·Homes are suitable for repair and rebuild;

·Property owners should talk directly with their insurer or EQC about repairs;

·Property owners no longer have to wait for the results of any area-wide land assessment reports by EQC or their engineering consultants Tonkin & Taylor;

·There will be some isolated exceptions where geotechnical assessments will be required due to major land damage;

·Repair and rebuilding work should take into consideration the risk of ongoing aftershocks, so some finishing tasks such as brick and driveway concrete laying should be delayed until that risk decreases.

White Zone:

The CBD and Port Hills are among the hardest parts of Christchurch to investigate and provide meaningful information about, particularly after the 13 June Earthquake. Unfortunately it is not currently possible to confirm when clear direction will be available on properties in the white zone.

key points to note are:

·These areas are still being mapped or are not residential;

·In the Port Hills, an extensive geotechnical investigation is underway;

·Land issues – rockfalls – are of a different nature than to those on the plains;

·No timeframes have been set for these areas.

 


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