More than 80,000 people are exposed to unacceptable financial and health risks from living in leaky homes that have failed or are at high risk of failing, official documents show.
Previously secret papers show 30,000 homes built using monolithic cladding between 1992 and 2004 will cost $4.5 billion to fix at an average $150,000 for settling claims.
The papers also reveal growing evidence about the physical and mental health impacts on the 80,000 owners and occupants living in the 30,000 rotting homes.
Auckland City, Waitakere and Wellington councils funded a study by Professor Philippa Howden-Chapman, of the Wellington School of Medicine, into health issues arising from the leaky building crisis.
She found there was good evidence that living in a leaky home exacerbated pre-existing respiratory conditions and some evidence that exposure to damp and mould in leaky buildings was associated with the development of asthma.
Uncertainty around liability and fixing leaky homes could undermine home-owners' sense of control and indirectly cause mental health problems, she said.
Releasing the papers this week, Auckland City Council chief executive David Rankin said more detailed work showed the number of homes nationwide was probably less than 30,000 and the total cost was a "more conservative" estimate of $2.8 billion. The papers said 12,000 of the 30,000 at-risk homes would land on council desks for some kind of claim.
Councils' share of the cost would be between $600 million and $2.1 billion, including $300 million on legal and expert costs.
With the Government absolving itself of liability, and developers, builders, architects and other liable parties going into liquidation, councils were often left as the "last man standing" when it came to settling claims.
"The Government was the architect of this disaster and, as such, must lead by example and contribute to the actual cost of fixing homes," consultant Louise Cosgriff told the council's weathertightness political working party in May.
With national elections taking place next year, Auckland City Council plans to turn up the heat on the Labour Government by lobbying Prime Minister Helen Clark and senior ministers, National leader John Key, other political leaders and pursuing legal avenues to sue the Building Industry Authority.
Mayors from the country's big cities have had trouble securing a meeting with Helen Clark and Finance Minister Michael Cullen on the leaky building issue, but a meeting is scheduled after the local body elections.
Auckland City Mayor Dick Hubbard said councils had to convince the Government to change its mind on refusing to accept any liability for leaky buildings. About half of the leaky homes were in Auckland City.
Last month, the council revealed the bill to ratepayers would be between $200 million and $360 million.
Mr Hubbard said he had a number of concerns about this "terrible, terrible situation", such as the effect on people's health to the potential for a "Cave Creek situation" from a rotten balcony collapsing.
Former mayor John Banks said going down the moral path to get the Government to accept liability had been exhausted. What was needed was a high-level, aggressive legal approach by all the Auckland councils.
The Government has hired senior Queen's Counsels to vigorously defend any cases brought against the Building Industry Authority. Auckland City is proposing to hire its own QCs to fight fire-with-fire until it wins a case against the Government.
Building and Construction Minister Clayton Cosgrove yesterday continued to insist the Government was not liable.
The role of Government was not to provide compensation for a problem it did not cause but to provide a strategy to tackle the problem. He said the question of Crown liability was considered by the Appeal Court in the Sacramento case where all arguments against the Crown were struck out.
Spelling It Out
* 80,000 people are living in homes that have leaked or are at high risk of leaking.
* 30,000 homes are at risk of leaking.
* Average cost of settling claims is $150,000, or $4.5 billion in total.
* Subsequent unpublished work says the total cost of settling claims is $2.8 billion.
* Councils' bill for leaky homes is between $660 million and $2.1 billion.
* Government must help to pay for homes to be fixed.
* Health study shows people living in leaky homes develop asthma and suffer mental health problems.