Auckland councillors accept $2 billion flood buyout deal, ratepayers to pay off debt for decades says mayor

The summer floods have left a $2 billion bill for Auckland Council and the Government. Photo / Dean Purcell

Auckland councillors have today unanimously voted to accept the proposed $2 billion cost-sharing buyout package for hundreds of uninhabitable properties and other storm-related costs with the Government.

It includes the buyout of about 700 Category 3 homes at a cost of $774 million, and $390m towards fixing roads and bridges affected by the Anniversary Weekend storms and Cyclone Gabrielle.

Today’s decision followed an earlier vote to endorse the deal in principle, subject to consultation with Aucklanders. In the consultation process, 83 per cent of submitters supported the deal.

Workers clean up a slip after storms and flooding in Auckland. Photo / Alex Burton

Those who did not support accepting the funding generally opposed the buyout of Category 3 properties, feeling it should be property owners’ responsibility, covered by insurance payments, or government responsibility.

The largest cluster of affected homes is in the West Auckland suburbs of Rānui, Swanson and Henderson and coastal communities of Piha, Karekare and Muriwai. Other clusters are in Milford and Māngere.

The deal also includes significant Crown support for the council’s Making Space for Water initiative, which includes buying properties in flood-prone areas, taking out stormwater pipes and recreating the original streams, culvert and bridge upgrades and overland flow path management.

“As Mayor, I am particularly focused on the fix-up work required to make our region more resilient to future weather events,” said Mayor Wayne Brown. “This deal will enable us to move faster on those plans, rolling out the Making Space for Water programme and reinstating a range of transport infrastructure to help our communities return to a sense of normal.”

Category 3 homes in sites identified for “daylighting streams” will be bought as part of the buyout programme, but the bill for purchasing other properties will be met by the council.

Areas identified for storm resilience include the Wairau Creek on the North Shore, the Waimoko, Opanuku, and Porters streams in West Auckland, Coxs Creek in Grey Lynn, and Harania Creek and Te Ararata Greenway in Māngere.

Paturoa Road in Auckland's Titirangi was badly damaged by floods during Auckland Anniversary Weekend, in January. Photo / Brett Phibbs

Auckland Council’s governing body also made decisions today about how it was going to undertake the process of buying out Category 3 properties.

Under the details of the agreed approach, insured Category 3 homeowners will be offered 95 per cent of the pre-flood market value of their property. The remaining 5 per cent of the property value will operate like an insurance excess.

Meanwhile, uninsured Category 3 property owners will be offered at least 80 per cent of the pre-flood market value of their property, which may be increased up to a maximum of 95 per cent subject to considering the special circumstances of those property owners.

Brown said that a fair balance had to be struck.

“Eight months on from the floods, many Aucklanders are still dealing with that devastation. We have agreed to the Government’s proposal to give them a helping hand out of it. That is the right thing to do.

“On the other hand, we are asking all Auckland ratepayers to pay higher rates to make this happen. They will be paying off the debt associated with this decision for decades. I feel the weight of that responsibility. We are also on a fixed budget and had to make decisions which gave us some confidence we could complete this process within the budget.

“I particularly want to thank members of the affected residents’ groups who told their stories and have asked us to get on with this. I know it’s been really hard for you, and we listened,” he said.

West Auckland is Flooding (WAIF) spokesperson Lyall Carter said the decision was great news for flood-affected west Aucklanders.

“This is a fight that we’ve been in not only for the last nine months but a lot of our people have been in this fight for years.”

The January weather event in west Auckland came after the floods in 2021 during a Covid-19 level three lockdown.

“Our community have been fighting for nearly two years for justice and for flood mitigation to be put in place so that future generations don’t have to go through what we have endured.”

Carter said that’s why the announcement on the Making Space for Water initiative was really important because there will be mitigation put in place for future generations of west Aucklanders to be safe in their homes.

Volunteers make up sandbags from the sandpit at the Kumeū Playcentre in West Auckland ahead of the January floods.

Carter said despite today’s decision, there was still a lot more advocacy to be done.

There was still a real question around Category 2 homes as the indication from insurers was that there was a possibility you would not get insurance, he said.

“There’s still advocacy to be done around that and advocacy for making space for water.

“We look forward to working with Council with the knowledge that we have of our neighbourhoods, streets and streams to help them make space for water,” he said.

Finance Minister Grant Robertson earlier said $877 million will come from the National Resilience Plan towards Auckland’s recovery from the summer storms.

He said the council had applied for a further $200m for road and other transport repairs, which is being reviewed by Waka Kotahi NZ Transport Agency, bringing the total Crown funding up to $1.1b.

“I am pleased we have reached this agreement so Auckland Council can provide certainty for the people whose properties, or those close to theirs, were severely damaged by landslides or flooding,” Robertson said.

Finance Minister Grant Robertson. Photo / Mark Mitchell

“The Government will contribute up to $387m to support Auckland Council to purchase Category 3 residential properties. This equates to 50 per cent of the net cost, which is the same agreement for Gisborne District Council and Hawke’s Bay councils. The net cost is the agreed buyout value for each property, less any insurance payments the homeowner receives.

The Government is also contributing $380m of the capital cost of the Making Space for Water projects.

Brown said that the approach must not be seen as a precedent for future buyouts.

“As a council, we do not and cannot insure private properties against the hazards of coastal erosion and climate change. Rates are not insurance premiums. We have made it clear throughout this process that the government needs to come up with a national scheme, so we’re not just doing things piece by piece with future weather events.”

Auckland Council expects to start direct discussions with confirmed Category 3 homeowners on buyouts towards the end of October.