Vacant land red-zoners fear bankruptcy

18:48, Feb 18 2013
Southshore resident Lee Osborn stands between her two red-zoned properties.
VALUE DIMINISHED: Southshore resident Lee Osborn stands between her two red-zoned properties. The vacant site (left of the mailbox) is a garden she and husband Greg Chapman planned to build their retirement home on.

Some earthquake-hit Christchurch residents face bankruptcy if they accept a Government payout offer for their land, a group petitioning Parliament says.

The Red Sections Owners group is appealing for the Government to rethink its offer to owners of vacant residential land, red-zoned because it was uneconomic to repair.

Vacant land cannot be insured, and the Government last year ruled that because the owners did not have coverage, they would be offered a payout of 50 per cent the land's rateable value (RV) where insured red-zoned homeowners were offered 100 per cent RV.

A petition, with more than 1500 signatures - calling for vacant-land red-zoners to be offered the full land RV - will be tabled in Parliament this week.

Red Sections Owners spokeswoman Andrea Newman said it was unfair to offer less to people unable to get insurance.

"Some of those families are going to be bankrupt as a result of this.


"They're mortgaged up to their eyeballs on this piece of dirt and they're looking at coming out with absolutely nothing and a mortgage still to pay to the bank."

To be labelled uninsured rather than uninsurable was "quite insulting", she said.

"They're average Kiwi families looking to build a home and they've just been caught out at the wrong time."

Newman said the group had more than 80 members, who, at 50 per cent RV payout, faced an average "loss" of more than $100,000.

Some members owned vacant land in the Port Hills, which is yet to be extended a Government offer.

Port Hills Labour MP Ruth Dyson accepted the petition on Sunday, and will table it in Parliament this week.

"This is an opportunity for owners of [vacant] land to have their voice heard when it clearly hasn't up until now," she said.

"It's literally financial devastation [for some landowners]."

A select committee would consider the petition, and Dyson would lobby for it to be heard soon.

Earthquake Recovery Minister Gerry Brownlee said the group was entitled to petition Parliament, but the move did not change the Government's thinking.

"It's just a harsh reality that when the earthquake struck, all the value in that land was taken away.

"We've tried to give people some optionality by making a voluntary offer."

An online version of the petition had drawn 1671 signatures by last night. It is open until March 31.


Lee Osborn and Greg Chapman have a bottle of Champagne at their Southshore home, which they planned to drink when they were zoned green.

It has gone unopened.

Their property was red-zoned in May last year along with their vacant site next door.

That site, currently their garden but earmarked for a smaller retirement home, is eligible for a Government payout of only half its rateable value because they could not insure the land.

Osborn said they had been "devastated" by the news.

"We've always done everything right. We've insured everything we've got that could be insured and that's not been easy at times.

"It's our whole future retirement plans and everything just down the gurgler through no negligence of ours at all."

They learned of the reduced offer in September last year, but still went through stages of anger and sadness, she said.

"It just seems so blatantly unfair.

"Was it my decision that they tied the [EQC] levy to insurance rather than rates? No, I just went along with what the bureaucracy wanted."

Osborn grew up on an adjoining property and had never lived anywhere else. "It's hard. We worked really hard for this house. It's not just walking away from any old house."

The bottle of Veuve Clicquot sits at the bottom of the stairs.

"I don't know what we'll do with it," Osborn said.

The Press