Govt offers to buy 5100 Chch homes at 2007 value

ABOVE: The www.landcheck.org.nz website, launched this afternoon, details the deal. The site was overloaded shortly after launch. (Click to enlarge). The site is developed and hosted by TradeMe.

From NBR's Chris Hutching at the media lock-up in Christchurch:

THE GOVT'S PACKAGE: 7 KEY POINTS

• 5000 homes will not be rebuilt -- owners can chose to sell the whole property or just the land to the government at the ratable value depending what works better for them considering insurance. The abandoned land will be turned into parks and reserves.
• Treasury estimated the net costs to the government to buy all 5000 properties at between $485 million and $635 million.
• Costs are expected to be met from the Government’s $5.5 billion Canterbury Earthquake Recovery Fund (Cera).
• Advice from geotechnical engineers has seen all greater Christchurch land divided into four residential zones – red, orange, green and white.
• About 100,000 were in the Green Zone and could be rebuilt.
• Orange Zone properties, about 10,000, needed further investigation.
• White Zone houses, including the Port Hills and the central business district, were still being mapped or were not residential land.
   

UPDATE 1pm: Christchurch Earthquake Recovery Minister Gerry Brownlee has confirmed the government will offer to buy 5100 Christchurch homes at 2007 rateable value (the current rateable value), less any built property insurance payouts already made. The government will then deal with the former home owners' insurance companies and EQC.

For people who owned property with insurance in the residential red zones on 3 September 2010 -- the day before the first big quake struck -- 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.

The government was advised rateable value would be fair because the last ratings were carried out in 2007 and prices had fallen since then.

Mr Brownlee said that during the process anyone who had an extension or a new bathroom or other improvements would have this taken into account.

The briefing continued with an in-depth report by Tonkin and Taylor about which specific neighbourhoods were going to be included.

It was also confirmed that home owners will have nine months to decide whether to accept the government's offer.

City divided into four zones
Speaking at a public press conference, prime minister John Key said Christchurch had been divided into four zones: red, orange, green and white.

The red zone contains the 5100 homes covered by today's offer.

The orange zone contains 10,000 properties with moderate to severe damage that require further assessment.

The green zone, covering most of the city, covers homes that can be rebuilt or repaired, and the repair process can begin.. Owners would have to work with insurers.

The white zone is for homes yet to be accessed.

$485m to $635m cost
Mr Key put the cost of the the government buying home in the red zone at $485 million to $635 million.

The sum was catered for in the budget's Canterbury earthquake fund, Mr Key said.

Mr Brownlee said it would take "some time" for people to be paid. The affected would be contacted in the next six to eight weeks.

Those who have made "significant improvements" since 2007 would be allowed to state their case for a higher payout than their 2007 valuation, Mr Key said.

Residents can go to www.landcheck.org.nz (overloaded as the news broke) or phone 0800 779 997 for the latest on their homes.

NBR will bring you further updates soon.