Jade Church will pay late penalties to stay in her red-zoned Christchurch home rather than tackle a housing market her family cannot afford.
The Bexley homeowner is one of about 25 in residential red zone who sold to the Crown but have indicated they will not be able to vacate their homes by final settlement on January 31.
The Canterbury Earthquake Recovery Authority (Cera) yesterday confirmed that those who previously signed an agreement to sell to the Crown will face penalty fees if they are not out by that time.
Chief executive Roger Sutton said after two previous extensions, 157 homeowners chose the final date to settle with the Crown on the sale of their property and move to their new homes.
Cera was working on solutions with at least 25 people who were expressing concern.
"We are able to give 14-days grace but anyone who has not moved out after that will be charged daily penalty interest and that amount of money will be deducted from the final settlement payment."
The penalty would be 10 per cent of the complete property transaction per annum, broken down into weekly fees.
Sutton said he had powers under the Canterbury Earthquake Recovery Act to make exceptions in "extreme circumstances".
Church had paid a deposit on a section in Rolleston, but a holdup meant their title would not come for another four months before they could start building.
"It's not something we can control. We're doing everything we can but we can't [move out]."
She would be willing to pay the 10 per cent penalty fee, since with the $87,300 offer on their section it would likely be about $170 a week.
"This is actually still cheaper. If it comes down to that then we'll probably just stay.
"There's no way we can afford the market prices in Christchurch. It's still not right." The only option was to move to her "in-laws", but it was not viable with two kids and a dog, Church said.
Sutton said it cost central and local Government nearly $10 million a year to keep red-zone infrastructure going, or $13,000 a property each week.
"It's difficult because a lot of people are stressed and upset, but we're trying to treat people as best we can.
"I will be ringing some of these people myself and saying, ‘look, I don't think it's reasonable that I do give you any more time'," he said.
What would be done to accommodate the 100 homeowners unwilling to sell in the red-zone was still to be decided.
"With such a massive decline in the demand for running water, there is less of it moving through the damaged pipes, so [there's] a greater chance of water stagnating," Sutton said.
HOUSING DECISION DUE SOON
A decision on whether red-zoned homes can be used as temporary accommodation for those struggling to find affordable housing is expected within the next few weeks.
The idea was put to the Christchurch City Council late last year as a way of alleviating the city's housing shortage and council staff have been working to identify land where they could be relocated to.
Council housing committee chairman Glenn Livingstone said yesterday he hoped to have all the information by the end of the month so a quick decision could be made on whether to proceed with the plan. "There's always going to be debate over how cheap or affordable it might be but it's always going to be cheaper than new builds," he said.
Last month, Christchurch was officially added to the list of the districts covered by the new Housing Accords and Special Housing Areas Act, which was introduced by the Government last year to try and ease pressure on housing supply in areas facing significant affordability issues.
The Land Use Recovery Plan gazetted by the Government last month addressed some of the housing supply and affordability issues in Christchurch by identifying greenfield priority areas for new residential development, but the Ministry of Business, Innovation and Employment (MBIE) believes extra measures are also needed.
"Relying only on the Land Use Recovery Plan and Resource Management Act will not achieve the specificity of a housing accord to address issues," MBIE housing affordability programme director Jo Doyle said in a report prepared for Cabinet late last year.
A housing accord has already been agreed to in Auckland, where the council and the Government pledged to build 6000 homes in 10 housing areas.
Livingstone did not know when an accord was likely to be reached in Christchurch but said Mayor Lianne Dalziel and Housing Minister Nick Smith had had "high level" discussions about it.
- © Fairfax NZ News
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