Earthquake costs a 'white elephant'
The Property Council has repeated its call for government assistance on earthquake-strengthening costs for commercial buildings as part of its submission on proposals for handling earthquake-prone buildings.
Nearly 300 people had their say on the Government's proposals before submissions closed this week.
The public is unlikely to see a summary of those submissions until the Government decides what its policy will be, a process which is expected to take at least another three months.
However, the Property Council, which represents commercial property owners, wasted no time making its submission public, saying cost remained a "white elephant".
Council chief executive Connal Townsend said the cost of earthquake strengthening, on top of higher insurance premiums, might result in some owners being forced to "lock up and walk away".
In some cases, small businesses and buildings owners could no longer afford insurance, which meant their banks would not provide mortgage finance.
Others were losing tenants because of health and safety legislation which was at odds with the proposed strengthening standards and time frames.
"In many cases, the property owners will be forced to strengthen to at least 70 per cent of 'new build standard' rather than the proposed 34 per cent because tenants ... are already demanding their premises are 70 per cent to 100 per cent of NBS," he said.
"Tenants' expectations have changed but their willingness to pay has not. Businesses and building owners will struggle to get finance for this work."
Although the proposals do not suggest the building code should be raised, many owners of noncompliant buildings are understood to be nervous about the time frame they might have to meet.
Under the proposals, buildings which do not meet the code will have to be upgraded within 15 years.
Many smaller provincial towns are also concerned for their historic precincts.
Allan Dippie, a Dunedin property developer, said many buildings in his city were in a "reasonably bad state of repair".
"Instead of restoring buildings, it's going to be in many cases a better economic investment to tear the building down, build a new one and comply with everything completely," he said.
Councils and historic building groups would have to be realistic about opposing such demolitions.
"They have to face up to the fact that [these buildings] will sit there and decay otherwise."
Dippie said a lot of insurance premiums had doubled at the end of last year for Dunedin building owners, and tenants were now asking about insurance costs because they were worried it would add to their rents.
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