At a meet-the-candidates forum featuring some of the country’s highest-profile MPs there was consensus across the board that a lot of things around earthquake strengthening needed to be reviewed
Aucklanders grizzle and moan that things are always changing, but in Wellington the complaint is that they rarely ever do.
Wellington is “stuck“, its apartment owners want to leave, the wastewater system has been run to failure, its bus service is edging out of a disastrous network redesign while its housing stock is dilapidated, and cost blow-outs seems to plague every project from the Town Hall to Transmission Gully.
That’s why the most popular word at an Inner City Wellington election event on insurance and earthquake strengthening issues Tuesday evening was “review”. Nobody thinks it’s realistic to expect much to change anytime soon. Not even those advocating for things to change.
Yes election campaigning has been “suspended”, but politicians sparring over inner-city living and earthquake strengthening issues at St Peters on Willis in Wellington is just business as usual.
Last year some in the city debated those issues at a local government-led forum on insurance and earthquake risk.
A taskforce came out of that, which turned into a discussion document that everybody lost interest in before it got to the “integrated leadership group” stage.
Now a review of earthquake legislation is what apartment-owners in Wellington are hoping for.
And it’s one all candidates at the event – Wellington Central MP Grant Robertson, Greens co-leader James Shaw, and National List MP Nicola Willis – were quick to sign up to.
They went further than that. Pledging to support the (Strengthening Body Corporate Governance and Other Matters) Amendment Bill – which would reform body corporates – through its first reading.
Robertson mused that he wanted to see a deeper review of the whole body corporate system, but that the prospect of more delays had made him willing to support any change no matter how piecemeal:
“As we often do in these situations you end up with a dilemma of putting through a piece of legislation that deals with some really important issues or trying to review the whole thing and that taking a lot longer.
“This has now been pulled from the ballot, therefore I think it should be advanced, but there must not stop a wider review of the Unit Titles Act, which deals with a whole lot of other issues for body corporates [including] the question of body corporates being able to borrow.
“It is an old bit of legislation despite the 2010 review and I would like to see the whole thing reviewed.”
Earthquake strengthening
The glacial pace of progress on the issue of earthquake strengthening costs is at odds with the powerful representation the area enjoys in Parliament.
Because as fate would have it, the local MP holds all the cards in this debate. And if he’s not elected back into Government there is a decent chance that three of the other MPs campaigning for the Wellington Central seat will be.
Robertson is the Finance Minister, who could appropriate funds for the issue, and the Earthquake Commission Minister, who could shape a regime to take on a greater share of the burden.
He even helped found the organisation now lobbying him on it:
“[I] occasionally regret its establishment because of the staunch advocacy, but I expect nothing less.”
With so many highly-ranked MPs representing Wellington Central (likely to be joined by a fourth: ACT’s Brooke van Velden) questioners at the event were exasperated that so little seemed to have been achieved.
Robertson said Government officials were pushing back on some of the changes. It’s why change could only come through reviews rather than the exercise of Ministerial power.
“Whoever the government is over those three terms they are being advised by officials who don’t agree with the position of Inner City Wellington.
“The officials who advised Nicola’s Party when they were in Government, and who advise me now, do not agree with some of the premises that are in there.
“That makes it very difficult for politicians when you are dealing with things that are described as life and death style legislation.”
Earthquakes are a bigger problem in this electorate than most. The capital is rarely the epicentre of them, but it feels everybody else’s earthquakes – which in a practical sense is pretty much the same thing.
A good New Building Standard rating (those percentage scores that measure a building’s safety during an earthquake) means the people inside them should be safe in the event of an earthquake, but it doesn’t guarantee people will be able to use those structures afterwards.
In other words, even if the city is rebuilt with buildings that meet NBS there’s no reason to think that will change how much insurance companies might have to pay out after a quake.
So, after a massive reported $34b payout in Christchurch and further damage during the Kaikoura quakes the international insurance industry has begun to question why it is insuring a city where there is a 10 percent chance the entire place will split into seven ‘islands‘.
Caught in the middle
Apartment owners dominate a large chunk of the Wellington central electorate and are caught in the middle.
Unexpectedly so. Many bought their apartments before the full ramifications of earthquake strengthening legislation were well known.
They bear the full brunt of insurance and strengthening costs every time engineers discover a new fun fact about how earthquakes affect buildings.
Strengthening work can involve a high-degree of project management that even the local council has failed to manage at times. Now the Government expects a legion of retirees, accountants and middle managers to do it.
“I would argue that we’ve got to get more sophisticated. So that actually, when you do strengthen your building your risk goes down and therefore your premiums go down.”
This group is too small to be nationally significant, but the costs they face are real. Even more so now that some have lost their employment courtesy of a pandemic that was also outside of their control.
One apartment owner attending the event was faced with unemployment just as his building’s body corporate faced a massive earthquake strengthening and insurance bill.
Others in his building came to an agreement to sell and leave the strengthening task to somebody else, but then discovered they couldn’t because one owner didn’t want to move.
As more of these stories proliferate it is hard to see many being willing to have the largest purchase of their lives be an apartment in Wellington.
There’s a larger group that has a stake in this which isn’t even aware: the people who want to live in the city, but can’t because it’s impossible to buy an apartment.
Shaw criticised the insurance industry for seeming to allocate risk by “postcode” in a way that didn’t differentiate the low earthquake risk of a base isolated building from a higher risk one.
“[the issue with] a postcode-based system is that it isn’t actually risk-based. It’s a sort of a halfway house …. because it’s built on area rather than on the risk associated with that particular building.
“And actually I would argue that we’ve got to get more sophisticated. So that actually, when you do strengthen your building, your risk goes down and therefore your premiums go down.”
Willis echoed Shaw’s criticism and said there had been “opacity” in the way large premium rises had been dished out.
“[It] could actually jeopardise future residential and commercial development in Wellington as insurance becomes more unaffordable.”
