Homeless residents in the Christchurch suburb of Bexley, devastated by this month's earthquake, are considering suing the city council.
They want a class action lawsuit against the Christchurch City Council, which backed the Pacific Park development in Bexley by changing the zoning to allow it and profited from the sale of part of the swampy block to a developer.
In an area where whole streets could be bulldozed, residents say the council should meet any shortfalls if Earthquake Commission and insurance payments don't match property values.
Christchurch mayor Bob Parker had to apologise last week after he wrongly said the council opposed such subdivisions because of concerns over land quality, taking cases to the Environment Court.
There was no court case, and it was Bexley residents who opposed plans by the council, which had proposed more of the wetland for housing.
The Planning Tribunal eventually reduced the area available for development.
Earthquake Recovery Minister Gerry Brownlee says land can be made safe, but many Bexley residents don't want to rebuild, fearing they will never be able to sell their homes.
The Pacific Park land changed hands three times in the 90s as developers sought to profit after the council changed the zoning from industrial to residential – against residents' wishes.
At other subdivisions on swampy land that survived the quake, soil strengthening work was done. But Land Information Memorandum reports show the Pacific Park land is mostly silt and sand down to three metres, with little or no hard fill, and that in some areas the fill was done without council supervision.
The September 4 magnitude 7.1 quake hit Bexley hard, with liquefaction causing huge piles of sludge to bubble up, cracks to open in people's yards and houses, and "lateral spread" causing land to slip towards the water. Council planning staff say the land was developed to required standards at the time and there is no correlation between the earthquake damage and the quality of the work done.
But Seabreeze Close resident Rodney Wells, whose home has been condemned, is sure that what he calls a "cheap Johnny job" by developers "wanting to make a quick buck" is the reason his street was destroyed and other subdivisions survived.
"I've spent a lifetime getting to where I am and it's been taken away, not by the quake, but by those who never did the job right in the first place, and authorities who didn't look at it because they thought they'd get rates out of it. It's all about the dollar."
Star-Times inquiries show the council backed the development because land in the city was scarce. Staff warned about sea-level rises, given the area was prone to flooding, but there was nothing noted about liquefaction or seismic activity, and documents make no mention of tests to determine the land's suitability for housing.
The land's first owner was developer Phil Burmester, whose company Quarrington Holdings approached the council about a zone change in 1991. He told the Star-Times his firm sold the land on – including a 20ha block it purchased from the council – within a year because he specialised in taking "raw land" and gaining the required zoning changes.
David Lyall's company Pacific Park Estate picked up the land. The former chair of Provincial Finance – the first of the big finance companies to collapse, going under in 2006 after a foray into the car market – now lives in Melbourne, and says he developed roads and about 30 homes before selling the remaining land to Enterprise Homes in 1996. That company went on to develop about 150 homes over 10 years.
Councillor Chrissie Williams said at the time of the zoning change, the thinking was "market-driven" and what developers wanted often overrode other considerations. "A lot of our development was pushed by landowners at the time. It's still happening."
Enterprise Homes' lawyer Stephen Rennie said consents were in place by the time the company bought in, but he questioned the "robustness" of the process that led to the zone change, and the council's role as vendor.
"Whether the land was suitable for residential, I don't know. That's where there are questions to be asked. The town planner's report, there's not even a mention of any instability. It's all about the birds and the bees. It doesn't strike you as terribly robust."
Several residents were concerned Enterprise Homes did not reinforce their foundation slabs, but Rennie said the consents only required steel reinforcing in the perimeters. "Whether the rules are suitable for an area like Bexley is another matter. New Zealand's building standards, given the earthquake and leaky homes, seem to have been off-beam for some time."
Wells said legal action had to be considered. "It's a sick story and if the Earthquake Commission and the council don't come to the party there should be a class action."
Neighbour Laura McConchie, agrees. "No one wants massive payouts, but if we get what our houses and land are worth, people will be happy."
Parker said it was too soon to be talking legal action. "That conversation doesn't take us anywhere useful. Our focus is on working with the banks, the commission and insurance companies to extract the best possible protection of their equity." He had not checked, but assumed the rezoning had been done correctly, and said it was too soon to say if council would meet residents' losses. "We're considering the options and waiting on a report that gives direction on what can happen to the land."
Asked if he believed Bexley should have been developed, Parker said: "Fifty percent of Christchurch is built on land potentially subject to liquefaction. According to the knowledge we have around liquefaction, you can build successfully, you can remediate the land and improve it."
Williams said the decision to build was not necessarily wrong, but the council needed to consider if the risks at Bexley were acceptable. "I've been asking for a long time, are we looking at areas that, if we have a disaster, we shouldn't develop?"
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