The leaky homes rescue package announced by Building and Construction Minister Maurice Williamson today is expected to cost the government $1 billion over the next five years but will fix only some of the damaged homes.
The package will see local authorities and government each contribute 25% of the repair cost and a government guarantee will back loans from major banks for half the remaining cost of repairs.
But it's first dependent on a group of negotiating mayors agreeing with the offer. They declined the last offer at 10%. The mayors are seeking the government's assistance because of the impact the leaky building repair costs have had on their insurance bills. They have also argued that had a former government not relaxed the Building Code, that the problem would never have arisen.
And homeowners who take up the offer will have to relinquish their rights to take legal action against local authorities and the government, which may leave a large number of people still fighting through the courts.
An even if the mayors agree, the scheme won't be launched until next year.
The minister likened the impact of leaky homes to that of a natural disaster of huge proportions.
“It is having a considerable impact on the wealth and health of many thousands of New Zealanders and their families,” Mr Williamson said.
It was estimated in a PricewaterhouseCoopers report issued in July that there could be up to 89,000 homes affected by weathertightness issues. Only 3500 have been fixed so far.
"If, as officials forecast, 70% of affected homeowners within the 10-year liability limit take up this package, the government is anticipating its share will be around $1 billion over the next five years," Mr Williamson said.
"Once the local authorities have responded, the government will begin working through the complex details of how it will work with the parties involved. We are aiming to have the new package up and running early next year.”
The mayors have until May 31 to respond to the government’s proposal.