More economic pain for latest red zoners
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Christchurch owners of red-zoned vacant sections, insured commercial properties and uninsured properties are being offered half their value by the government.
The announcement by Earthquake Recovery Minister Gerry Brownlee affects 65 vacant sections (vacant sections are uninsurable), 50 occupied but uninsured properties, 22 insured commercial/industrial buildings and six insured houses on leasehold land.
“We have decided to assist the owners of these properties by giving them the option to sell their land to the Crown at half the most recent rateable value,” Mr Brownlee says.
“If owners decide to take this offer, the land and any buildings on it will become property of the Crown from the settlement date.
“What the owner chooses to do with any buildings on the land up until that day is entirely up to them.”
There are also 22 insured commercial/industrial buildings in the residential red zone. The land these buildings sit on is not covered by Earthquake Commission insurance as it is not residential.
“The ongoing value of the land is significantly reduced due to earthquake damage,” Mr Brownlee says.
“In order to aid recovery and support the objectives of the residential red-zone process it has been decided to also make an offer to the owners of these properties.
"The price offered for these properties will be the most recent rating valuation for the improvements and half the most recent rating valuation for the land under option 1, or half the most recent rating valuation for the land under option 2.”
Some owners with big loans on empty sections will lose significant, if not all, their equity.
A group called Quake Outcasts, claiming to represent 50 landowners, says it will fight the decision through the courts.
“The government is not purchasing red-zone land with EQC money and so the suggestion that red-zone owners have not complied with the Crown’s insurance requirements is both irrelevant and misleading,” spokesman Ernest Tsao says.