Elderly red zoners left out in the cold
Christchurch Earthquake 2011
Kaiapoi resident Janet Cramer can't afford a new home with her payout but banks won't lend to her. Georgina Stylianou reports on the plight of elderly red zoners.
Mortgage free, independent and happy.
That's what 80-year-old Kaiapoi resident Janet Cramer was before the earthquakes.
"I tried my hardest not to let it all get me down but it's very depressing to be honest."
Cramer has lived in her Raven Quay house for about 25 years but it was red-zoned as a result of the quakes.
There's no visible damage, her two-bedroom property did not suffer from liquefaction and the $210,000 buyout offer from the Crown "won't get me anything in the current property market".
She says banks won't lend to her because "who would lend to an 80-year-old woman on a pension?"
Cramer is among a group of elderly red-zoners that experts and community leaders say are falling through the cracks.
They can't afford to buy another home but banks are reluctant to lend based on their age and fixed income.
Cramer is not eligible for state or council-owned housing because she currently owns her property and will receive money from the Crown.
She is not eligible for temporary accommodation units because they are reserved for people who need to move out while their home is repaired or rebuilt.
She cannot drive and wants to be close to shops, a bus stop and the doctor's.
She moved to Kaiapoi in 1962 and can't imagine living anywhere else.
"It's my community and I don't want to leave," she said.
She receives just under $350 a week from the national superannuation scheme and finds looking at rentals "very daunting".
"There aren't many around and the ones that do come up are horrifically expensive."
She has four sons but none live in Christchurch while her daughter has a "one-bedroom place with a dog".
"I don't want to be a burden on my children."
Staff from the Kaiapoi Earthquake Hub have shown her two rentals in recent months but "one was a total state".
"The other was suitable but there was a woman there who told me her landlord had given her three weeks to get out so her need was greater than mine."
Two banks had declined her applications for loans, she said, but "it's not their fault".
"I probably wouldn't lend to me either."
After being mortgage free for many years, Cramer said it was "sad" to think she would never own a house again.
"It's just impossible really, isn't it?"
Cramer has until January 31 to leave her home and the garden she has tended for so long.
"I'm sure there are more of us in this position and surely the Government can't just kick us out onto the street."
Census statistics show the population of elderly people in the main red-zoned suburbs, excluding the Port Hills, is higher than the regional average.
Age Concern Canterbury chief executive Stephen Phillips said most of the suburbs that were red- zoned were "low market value areas unfortunately" - a fact that has added "even more pressure" onto elderly people.
While New Zealand's major banks say all applicants are treated as individuals regardless of their age, a Christchurch property lawyer says age is undoubtedly a factor.
Duncan Terris, a member of the Property Law Section executive, said red-zoned elderly people had not expected to be moving house for the remainder of their lifetime.
"People see the Government [buyout] offer as reasonable . . . but many of these people have been out of the market for a while and don't fully understand the cost of replacing what they've lost."
He urged those who had not yet signed a buyout agreement to seek independent advice.
Meanwhile, banks could offer life insurance policies to mitigate the risk associated with lending to elderly people, he said, but these options were not being explored.
The banks were not to blame because taking on a such a risk would be "negligent", he said.
"An 80-year-old applying for a loan that will take 15 years to pay off, well, of course the banks are going to decline."
Being displaced was especially difficult for elderly people, he said, who often couldn't drive and wanted to be close to shopping facilities and healthcare.
Age Concern Canterbury earthquake support co-ordinator Beverley Mason said unless elderly people had money in the bank or investments they were "totally stuck".
"A lot of elderly people just cannot afford to own their own home again and they are having to rent."
They would rather keep what money they did have in the bank to "pass onto their children and grandchildren".
Matt Gordons, of Christchurch company Mortgage Select, said there had been an increase in inquiries about reverse annuity mortgages since the earthquakes.
This is when the borrower uses the equity tied up in their home as additional income. The money is not physically repaid until the house is sold - usually when a person dies or moves into aged care.
It would be a "disservice" if banks took a modest income, such as national super, and made it "service mortgage debt".
- © Fairfax NZ News
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