Wellington City Council is considering a loan plan for earthquake-prone buildings

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Wellington City Council is considering providing loans to earthquake-prone building owners who face complex and costly strengthening work. (File photo)

Wellington City Council is considering providing loans to owners of earthquake-prone buildings, amid concerns that many will miss deadlines for costly and complicated reinforcement work.

There are 563 buildings in the capital that need reinforcement or demolition to meet the new earthquake regulations, which were introduced in 2017 after the Kaikoura earthquake, and 372 buildings need to be repaired by the end of 2027. But as it becomes increasingly difficult to meet that deadline, the council is looking for ways to help building owners .

“I think the council was totally risk-averse from a financial point of view, but the deadlines are coming very quickly,” said Council Member Iona Panet, who handles the council’s partner urban development portfolio.

She said that while the council was looking to build on the government loan scheme that was announced to owners of earthquake-prone buildings in September, all options were on the table. “The employees have been tasked with going away and looking at some other solutions.”

Kevin Stunt / Stuff

The loan scheme will likely be prepared by a separate board-owned entity that can borrow at lower rates than private building owners. (File photo)

Other options include partnering with the central government to independently carry out reinforcement or demolition work, or offering price reductions to cash-strapped building owners.

Councilors on Wednesday asked employees to consider ways to help building owners.

Mike Mendonca, chief resilience officer at City Council, said employees will report to councilors in February. He said it was not appropriate to comment while staff were looking at possible options.

Read more: * Apartment rents for essential workers are “ too high, ” says attorney * Troubled time for the abandoned Hotel Adelaide in Wellington as the council takes owners to court * Lifeline of government or “ forced debts ” ?: Hundreds of earthquake-resistant owners They can now take out a government loan

Monique Ford / Staff

Counselor Fleur Fitzsimmons called on the council to investigate more options for financing earthquake augmentation.

Council member Fleur Fitzsimmons said the board’s loan scheme is likely to be created through a special purpose corporation (SPV) – a separate board-owned entity that can borrow money at lower rates from private building owners.

This money will in turn be loaned out to landlords to complete the strengthening or demolition work. The debt will be owed by the council-owned entity, not the council itself.

Bannett said previous councils were flirting with the idea of ​​a lending scheme for building owners but had not fully investigated it.

The current central government scheme to provide low-interest loans of up to $ 250,000 to boost the earthquake for owner-occupied units and apartments was a “really good start”, Bannett said, but it was “not necessarily enough money and not sufficiently accessible.”

Monique Ford / Staff

Wellington City Councilor Iona Panett says the council needs to act quickly if building owners have to meet reinforcement or demolition deadlines. (File photo)

Of the 563 buildings in Wellington that are considered earthquake prone, 283 are considered a high priority.

Another 152 buildings potentially prone to earthquakes await further evaluation.

“We have worked to get rid of the buildings from [earthquake-prone] List, but we’re really going to run into it, ” Panett said.

Monique Ford / Stuff

Wendy Booth, an executive member of the Body Corporate Chairs Group, sold her 24-year home in Wellington’s Tasman Gardens because she couldn’t afford earthquake repairs that cost hundreds of thousands of dollars. (File photo)

The board currently provides $ 500,000 annually to help earthquake-prone building owners, but that money is only available for detailed seismic assessments, not for any actual repairs.

Fitzsimons, who has called on the board to investigate more options, said the fund was too small and had not adequately addressed the problem.

“The approach the board has taken so far is to start with what the board can allocate in the annual budget, not the actual size of the problem,” Fitzsimons said. “The truth is, time is running out, and we need a citywide solution for earthquake-prone buildings.”

However, the initiative did not like Wendy Booth, an executive member of the Body Corporate Chairs, which represents unit and apartment owners.

Booth recently sold her 24-year-old apartment in Tasman Gardens in Wellington due to earthquake and water tightness issues.

“It’s very frustrating … making the selling decision because we can’t afford the reinforcement, and whatever comes out now might be able to help,” she said.

Booth questioned who would have access to the council’s loan scheme, saying that many apartment owners did not qualify for the government loan.

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