South Dunedin, home to 13,500 people, was hit by three months' worth of rain in just 24 hours on June 2, 2015. Locals don't want to suffer that flooding again. Photo: RNZ

“Fight or flight.” There’s a long list of adaptation options for the community of South Dunedin, but at their heart are those two options, city councillors were advised this week.

While communities from Matatā to Hawke’s Bay, from Christchurch’s red zones to Westport, are moving out in response to rising tides, floods, earthquakes and landslides, South Dunedin is different. It is at the forefront of a more strategic, community-led relocation – not fleeing the floods that have already hit, but adapting for those that are to come.

Or, in the blunt words of this week’s much-anticipated Report of the Expert Working Group on Managed Retreat: Where the evidence shows a community is likely to be wiped out in as few as 10 years, that poses an “intolerable level of risk” to the community’s safety or its continued viability. “The only rational response, in the absence of a feasible, cost-effective alternative, will be to relocate the community to a safer place.”

In the first instance, that should be done by persuading people they want to go. But in the final reckoning, it recommends communities be relocated using new legislated emergency powers, with no right of court appeal. 

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South Dunedin has suffered its share of big floods. The basin, home to 13,500 people, was hit by three months’ worth of rain in 24 hours on June 2, 2015. Flooding caused ponding up to half a metre deep in some streets, and contaminated water spilled into houses and businesses. The army sandbagged coastal homes, and a Unimog truck was sent to evacuate children from a primary school. 

“In 2015, heavy rainfall exceeded the operating capacity of stormwater systems, which led to extensive flooding across South Dunedin,” the Ministry for the Environment says, ahead of the working group report this week. “These heavy rainfall events are expected to increase in intensity and frequency in the future.”

But what’s getting people moving isn’t the floods of the past; it’s the overwhelming scientific evidence showing that the engineering mistakes in developing the community put it at an ‘intolerable level of risk’ for the future. This former coastal wetland has been developed, filled in and reclaimed over time, creating an area that has become a basin with no natural outflows.

It takes more than a few floods to persuade people the homes and businesses their families have built up over generations are no longer safe – but many have reached that point.

Generally, pre-emptive relocation can be complex and challenging for local government to coordinate, the working group report says. “Understandably, people feel attachment to their place of residence, where they have built social networks and settled their families – sometimes over generations.

“For too long, managed retreat has been a bogeyman described as the ‘option of last resort’ where communities dig in for as long as they can until everyone has to leave.”
– Jonathan Rowe, South Dunedin Future

“These connections are central to people’s sense of identity and well-being, and people may discount future risks in the face of such immediate concerns. Anxieties can be further exacerbated if people face the prospect of significant financial loss through relocation.”

Jonathan Rowe is the programme manager for South Dunedin Future, a joint programme of Dunedin City Council and Otago Regional Council. Perhaps appropriately, he was out on a LandSAR exercise last night – but on his return at 9.30pm, he was able to turn his mind to a different rescue mission.

He welcomes the working group report, and news that Climate Change Minister James Shaw has asked for an immediate select committee inquiry into funding managed retreat. “For the people of South Dunedin who are grappling with adaptation challenges, this starts to give a sense of clarity about the process, if not the outcomes – which remain uncertain.”

“For too long, managed retreat has been a bogeyman described as the ‘option of last resort’ where communities dig in for as long as they can until everyone has to leave.”

South Dunedin Future programme manager Jonathan Rowe welcomes news that Climate Minister James Shaw has asked for an immediate select committee inquiry into funding managed retreat. Photo: Supplied

However, working on these issues in South Dunedin, he says they’re seeing a much more dynamic picture filled with challenge but also opportunity.

On Monday this week, he gave a council committee the first hint of what is to come. 

Land use change of some form will be required in South Dunedin over the coming century, he told them, to manage the impacts of climate change. Some will be hard infrastructure protections like pumps, pipes and sea walls; some will be accommodation of hazards through nature-based solutions like open water courses, parks and wetlands.

And some, he told them, will be retreating or relocating to move people and property out of harm’s way.

This land use change will begin immediately upon completion of the adaptation strategy for South Dunedin in 2026. “There are approximately 6,500 properties in South Dunedin, and if land use change of 1 percent per annum was required over a 100-year period in order to effectively manage and adapt to the impacts of climate change, that would mean a change affecting 65 properties each year, every year, for the next century.”

That’s an indicative rate of change, he told them, but possible given anticipated changes in sea level rise, groundwater levels, and rainfall.

An unappealing prospect?

Although most instances of community relocation to date have occurred after a natural disaster, the working group report says, in the future pre-emptive relocation will become increasingly necessary. “Such action can permanently mitigate the risk faced by threatened communities and allow local and central government to exit an increasingly expensive cycle of responding to, and recovering from, destructive storms and similar harmful events.”

The expert working group was commissioned by the Ministry for the Environment, and chaired by first Dame Sian Elias and then Sir Terence Arnold. It delivered its report yesterday, with very little government fanfare.

Its 284-page report was quietly published on the ministry website as Shaw announced he wanted an inquiry into funding managed retreat; indeed, the working group appears to have already answered many of the questions that Shaw proposed in his terms of reference for the environment select committee inquiry.

“Right across the political spectrum in the House, people get that this is a big hairy problem, and requires a multi-generational response.”
– James Shaw, Climate Change Minister

Here, in a nutshell, are some of the big questions discussed: How can authorities conduct risk assessments in ways that will persuade people to be willing to move in advance of inundation?

Who makes the final decisions on managed retreat – central or local government? What are the nature of bespoke arrangements required for Māori land? What is the extent of public compensation and who should be eligible?

The report proposes a Ministry for Planned Relocation to oversee the policy, and local adaptation committees to make the tough decisions on the ground. “The relocation programme will require Crown approval. There should be no appeals to the courts on relocation programmes.”

And the relocation of communities would be comprehensive. At the end of a relocation programme, land in the at-risk area should no longer be allowed to be used, it says, with some very limited exceptions like ceremonial events, transitory recreational, and a little horticulture or mahinga kai gathering. “Allowing individuals to remain in any capacity would not adequately achieve the overall objective of risk reduction and would raise further difficult questions about the safety of those who remain, those they invite onto their properties, and responsibilities when a natural disaster occurs.”

The report proposed several options for paying for relocation: through a special levy; through a dedicated fund built up by a special levy and periodic contributions from general tax revenue; or just through general tax revenue, supported by any necessary borrowing as required.

“Whatever mechanism is chosen, funding for planned relocation should not be subject to the usual vicissitudes of the annual budget round. That will too easily result in deferment and to dangerous delay.”

The report addresses that political/electoral/timing problem. “There will have to be a broad consensus – a multi-party approach – to addressing climate change issues,” it says. “They cannot be dealt with on the basis of the usual electoral cycles.”

The reason the recommendations weren’t PR-released is the timing. They are political dynamite, so close to an election. Speaking to Newsroom this morning, Shaw acknowledges there was little attempt to promote the report to the public. “The fact that there’s an election coinciding is inconvenient.”

The Climate Adaptation Bill was supposed to be halfway to law by now; instead it’s been waylaid by the election.

Shaw confirms he is seeking a cross-party agreement, and has been talking to National’s climate change spokesperson Simon Watts.

“He and I have met two or three times already. They’ve said this is an area that they think needs consensus, and they’re keen to work on that. Right across the political spectrum in the House, people get that this is a big hairy problem, and requires a multi-generational response.”

Today’s decisions, tomorrow’s legacy

Council staff like Rowe say they can’t do it on their own. South Dunedin Future is in “active discussions” with central government leaders about the climate adaptation policy and financing, and how to make frameworks like those published this week by the experts working group and the Ministry for the Environment actually work, on the wet ground of areas like South Dunedin

Rowe says: “We need Government policy and financing frameworks that enable this vision to be realised because, as the reports acknowledge, we don’t have the tools or structures right now.”

That the Crown has an obligation to support communities is acknowledged by Climate Change Minister James Shaw. Yesterday, pre-empting the publication of the expert working group report, he asked for a select committee inquiry into community-led retreat and adaptation funding.

Shaw says its terms of reference should include identifying the regulatory powers and economic incentives needed to support adaptation actions, both before and after extreme events. And it must consider access to new funding sources, and the principles and criteria for cost sharing.

“Severe weather events such as Cyclone Gabrielle cause immense damage,” he says. “Climate change is likely to bring more frequent and more severe events in the future. Decisions we take now, about how to prepare and adapt, will have a lasting legacy.

“Community-led retreat is a carefully planned process, that can mean anything from relocating homes, to cultural sites, to playgrounds, out of harm’s way, before a severe event, like a flood, happens.”

“The vision is ultimately one in which the flooding occurs where we want it to, in the streams, in the parks, in the wetlands, not in our houses and businesses.”
– Jonathan Rowe, South Dunedin Future

The inquiry will be kicked off by Green MP Eugenie Sage, a former minister whose final act before retiring from Parliament this year will be to gain the committee’s agreement to the inquiry – before handing over to a new committee chair after the election.

Shaw’s words about the lasting legacy of today’s decisions may sound trite, but they echo a worrying assessment from the Ministry for the Environment. In the ministry’s issues paper, also published yesterday ahead of the working group’s report, it warns against repeated knee-jerk responses to increasingly frequent natural disasters like Cyclone Gabrielle.

“The financial precedents set through continual one-off processes for retreat may become unsustainable,” it warns. “The more that one-off processes for retreat are developed, the more communities will expect these processes to apply to them in the future (even if this is unintended). Using different approaches for different communities in similar circumstances would also raise equity concerns.”

The relocation programme

Both the expert working group and the ministry worry about the same problem of ad hoc payouts and property buyouts in response to the latest natural disaster, being perceived by the public to set a precedent for more strategic planned relocations. 

“The financial precedents set through continual one-off processes for retreat may become unsustainable,” the ministry says. “The more that one-off processes for retreat are developed, the more communities will expect these processes to apply to them in the future (even if this is unintended). Using different approaches for different communities in similar circumstances would also raise equity concerns.”

So the working group proposes a far greater degree of central coordination and control of managed retreat than had been previously anticipated. Among its 57 recommendations:

  • a relocation programme with the authorised powers and processes to achieve relocation – notably, the ability to change land ownership through the acquisition, and cancelling of titles to land, the ability to change uses of relocated land, and the payment of compensation and support to affected people;
  • a new Ministry for Planned Relocation to oversees the implementation of the programme;
  • a mix of voluntary and mandatory elements, guided by a principle that the system should aim to provide those affected with as much choice as possible over the timeframe;
  • a process where authorities (central and local government and private providers) can apply to withdraw services like roads and bridges from a property before or during a planned relocation;
  • that the Government considers adopting emergency powers in overarching legislation for adaptation and planned relocation;
  • central government mainly pays for property payments, but exceptions may occur in the case of relatively small, planned relocations;
  • support to property owners is given on a specified basis, up to a cap per property, and any costs above the cap would be borne by the individual property owners.
  • compulsory natural hazard insurance includes a clause providing that once a property experiences a damage event above a certain threshold (say, damage worth 30 percent of the property’s value) this will automatically trigger the planned relocation;
  • Māori and non-governmental organisations would get the most compensation, then owner-occupied homes;
  • rental accommodation and business premises and would get less compensation; bach and holiday home owners should not receive compensation payments at all, though they might receive some modest assistance with demolition or clean-up costs.

In the next three to five years, the report recommends operational responsibilities for planned relocation should be mainstreamed across existing departments and Crown entities to the extent possible.

For the longer term, the Government should establish a departmental agency or Crown entity to focus on proactive and post-event planned relocation, along with post-disaster recovery and reconstruction and enhancing the nation’s long-term resilience.

Any separate fund established to provide compensation for property losses, whether pre-pad through levies on insurance bills, or through contributions from the annual Budget allocation, would need to be managed by a suitable central governmental entity – an existing one like Toka Tū Ake EQC, or a new one.

A decision for the generations

The balance between different funding and financing mechanisms – allocations from taxpayers’ funds, pre-funding, or debt – becomes an inter-generational stand-off. To what extent can the baby-boomers, already net beneficiaries of the welfare state, then kick the costs of climate change and managed retreat down the road to the next generation?

Nelson’s deputy mayor Rohan O’Neill-Stevens is at present in Denmark, looking at their work around coastal protection. Climate adaptation is pressing for his community, too, as Nelson rebuilds from last year’s big floods and prepares for the next ones.

“We need to ensure funding mechanisms are just, not just for present generations, but for future generations who will continue to pay the debt and maintenance on protection assets,” O’Neill-Stevens says.

Nelson’s deputy mayor Rohan O’Neill-Stevens is in Denmark, looking at their work around coastal protection. Photo: Supplied

He welcome the proposed select committee inquiry. “If overseas experience is anything to go by, funding will almost certainly become an incredibly contentious point of discussion. With cost pressures on local government and communities already high, central government will need to come to the party in a consistent role.

“How we adapt to the threats of climate change is a topic of anxiety and uncertainty for my communities and communities around the country, and one local government has been looking for clear direction on for a long time.”

He says that for any proposals to be successful, they require wide community buy-in and ownership, with decision-making sitting at the most appropriate level – the community affected – under a consistent, Te Tiriti-centred, national framework.

“There will be incredibly tough decisions that have to be made, but we need to understand these issues in a community wide and national context. While decisions will affect individuals, it’s also a matter of wider community interest and for future generations.”

In cautious language, the ministry issues paper acknowledges this problem. “Any new government expenditure requires consideration of how costs will be met in relation to other spending priorities and strategic objectives,” it says. “Alongside rising adaptation costs, Aotearoa is likely to be facing other fiscal challenges. Our ageing population means that superannuation and healthcare costs are likely to rise in the medium to long-term.”

The experts working group is far more forthright about the dangers of pandering to established property owners. The generous buy-out model adopted in Matatā and in Christchurch’s residential red zones was aimed at wealth preservation or protecting people’s property from risk, it says. For the sake of social legitimacy, personal responsibility, equity and affordability, that can’t be tolerated again.

“That would not only preserve existing socioeconomic inequalities but also likely exacerbate them, especially given the likelihood that some of those in lower socioeconomic groups will be renters (rather than owners) and will suffer the greatest housing deprivation in planned relocation situations,” it says. “The way central or local government has responded to the need for planned relocations in the past, particularly when confronted by a catastrophic event, should not determine the approach taken in the future.”

But neither would it be fair to abandon property-owners to their fate – so the report recommends a middle course, that differentiates between different types of property according to need. Primary residences, whether owner-occupied or rented, would be more generously compensated (up to a cap) than second homes and commercial buildings.

“Everyone who is affected significantly by a natural disaster, or by the worsening effects of climate change, is likely to suffer some form of hardship. Some people, however, are much better placed to absorb or manage it with their own resources, for various reasons.”

There’s not much time

The working group’s report is being read with great interest in Dunedin. It’s taken South Dunedin a long time to get to this point.

It’s never been a wealthy neighbourhood, and locals struggled to make their voices heard at the council chambers, never mind at Parliament in Wellington.

There’s a well-known photo of a boy rowing down the flooded Normanby Street – that was in April 1923.

A boy rows down South Dunedin’s flooded Normanby Street, in April 1923. Photo: Hocken Collection, via Stuff

Now, 100 years later, other communities don’t have the luxury of time to plan their retreat.

Research for the Deep South Science Challenge warns around 10,000 houses in Auckland, Wellington, Christchurch and Dunedin could become uninsurable by 2050 because of coastal flooding from sea-level rise. An estimated 282,000-plus houses, with an estimated replacement value of over $213 billion, are in flood hazard areas across New Zealand.

Jonathan Rowe says managed retreat could be used in partnership with other approaches, and if done pro-actively it could provide a path to a South Dunedin that is safer, and ultimately better.

“For example, targeted retreat over time from some parts of the South Dunedin area might create space for new options, such as flood protection like pumps, pipes and sea walls, nature-based solutions – open watercourses, parks and wetlands – and land-use changes that put the right type of development in the right places,” he explains.

“In creating space for water, we hope to be able to develop the safer parts of South Dunedin and enable urban redevelopment which makes the area a better place to live and work.”

“The vision is ultimately one in which the flooding occurs where we want it to, in the streams, in the parks, in the wetlands, not in our houses and businesses.”

Newsroom Pro managing editor Jonathan Milne covers business, politics and the economy.

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