Damaged land to be cleared 'in two years'

The Government hopes the worst-hit areas that will not be rebuilt after Canterbury's earthquakes are cleared within two years.

Prime Minister John Key and Earthquake Recovery Minister Gerry Brownlee announced a package yesterday for 5100 properties in the city's east, north-east and Waimakariri District beach areas which would be bought by the Crown.

Key said the deal would allow people to buy another home and "hopefully" restore their equity.

The Crown would spend the better part of half a billion dollars effectively "bailing out" earthquake-affected homeowners, he said, to ensure they did not owe their bank money after receiving insurance payouts.

Homeowners would have an offer within eight weeks.

Brownlee said houses sold to the Crown would not be left empty for long.

"As properties are settled, they'll be demolished and the sites will be cleared," he told The Press.

"I would like to think that all of those areas will be clear within two years."

The future of the abandoned areas was unclear, however.

Key said it was not the Government's intention to transfer the land to the Christchurch City Council and he could not rule out the abandoned areas becoming residential suburbs.

"We're talking decades, not years," Key said.

The Government is stopping short of compulsory acquisition, relying instead on the lack of infrastructure.

Brownlee said: "Why would you want to stay if there's no infrastructure in there for you? And there won't be."

He was confident "safe and adjacent" properties to the so-called "residential red zone" would retain their value.

It was suggested at yesterday's press conference that nearby property owners would have to look towards a wasteland, but Brownlee said the abandoned areas would end up being "relatively attractive".

Government-contracted engineers have suggested some areas may have to be raised two metres before being remediated.

Brownlee said it would be "at least seven years" before houses could sit on that land again.

The Government has given the 5100 property owners two options.

They could sell their property at the 2007 rateable valuation, less insurance payments already made.

The Government would deal with private insurers and the Earthquake Commission, which meant "you can cash up and go, fairly quickly", Brownlee said.

Otherwise, the Government could buy the land and the owner could negotiate a better house payout from their insurer.

Key said the Treasury believed the package would cost the Government up to $635 million.

Yesterday's announcement left about 10,000 homeowners in limbo as their properties needed further assessment. Brownlee promised decisions on those properties within three months.

Detailed mapping of areas yet to be assessed, including rockslide-affected areas on the Port Hills, was under way.

About 100,000 Canterbury homes do not have significant land issues and can be repaired or rebuilt. Some isolated "green zone" properties with severe land or building damage may need further consideration.

Key called for patience from property owners.

"It's an enormous event on an international scale," he said. "We can't find any other national disaster that has had such a pronounced impact on [a country's] GDP as these earthquakes."

Christchurch Mayor Bob Parker estimated there were 11,000 sections in the city that were serviced and available or in subdivisions that were in final stages.

Another 6000 sections were in the consent process and a further 6000 sections in the city's east were in the planning process and could be "quickly released", he said.

Parker said yesterday's announcement marked a huge step forward. "I personally don't think it could have been done any faster."

Brownlee said the range of choices and plenty of land would suppress the temptation for developers to "jack up" section prices.

He estimated there were 1400 vacant rental houses on the market and the Government was building 240 temporary houses at Linwood Park and in Kaiapoi.

"None of those numbers add up to 5000, but everyone doesn't have to leave at once. The call for temporary accommodation hasn't been great so far, so people are in these [damaged] houses," he said.

The Government wanted to hear from the owners of 739 properties in the residential red zone for which it had no contact details.

The Press