Earthquake changes could cost $1.7bn

The look of character areas such as Dominion Rd in Mt Eden could change if proposals to strengthen or eliminate earthquake-prone buildings go ahead. Photo / Dean Purcell

Uncompromising proposals to eliminate or strengthen earthquake-prone buildings could change the face of character areas such as Mt Eden's Dominion Rd, and cause complex disputes in high-rise apartments owned by multiple parties.

The Ministry of Business, Innovation and Employment has proposed seismic assessment of all commercial and high-rise, multi-unit buildings in New Zealand - believed to be 193,000 properties.

Those that were not upgraded to withstand a moderate-sized earthquake within 10 years of assessment would be demolished.

The Government proposals were in response to a Canterbury Earthquake Royal Commission report on quake-prone buildings, released yesterday.

The ministry broadly agreed with the Royal Commission's recommendations, but it proposed more lenient timeframes for strengthening and did not agree that the minimum threshold for remedial work should be raised. Housing and Construction Minister Maurice Williamson said to do so would impose "catastrophic" costs on society.

The Government proposals have been released in a consultation paper.

If they are adopted, the cost of the changes would be borne by councils and property owners.

Property owners would bear the costs of strengthening their buildings to a safe level - 34 per cent of the design level of a new building.

This was expected to cost $1.7 billion over 15 years, or $700 million more than the existing requirement to meet this threshold within 28 years.

Property Council NZ chief executive Connal Townsend said the proposals would have a significant impact on Auckland's character areas, and provincial towns with many heritage structures, such as Wanganui, Dunedin, and Invercargill.

He said owners had a large window of 10 years to do remedial work. But he believed some owners would be forced to demolish and rebuild or take the "ghastly option" of "just locking the door and walking away".

"One of the lessons learned from Christchurch is a tough-minded attitude towards heritage and character," Mr Townsend said.

As a result, the proposals were likely to affect the appearance of areas such as Mt Eden, Ponsonby or Kingsland, which had large numbers of commercial buildings with unreinforced masonry.

Dominion Rd Business Association manager Gary Holmes said many tenants would not be able to cope with extra costs if building owners passed on the bill for remedial work.

Auckland Council has estimated that 4300 buildings in the region needed to be assessed, but the number needing work was unknown.

Mr Townsend said the proposals could cause havoc for the corporate bodies, which needed to secure a majority vote from apartment owners to approve earthquake strengthening. The owners' decision was protected by law, which could require amendments if the Government's proposals were adopted. The Royal Commission found huge gaps in council information on earthquake-prone structures, with only 23 of 66 councils keeping a register. Property experts estimated the total number of at-risk buildings could reach 40,000.

The commission recommended that chimneys and parapets needed to be removed or secured from unreinforced masonry buildings, and owners could be charged for demolition if this was not done.

Unreinforced masonry led to the deaths of 42 people in the Christchurch quake on February 22, 2011.

The Royal Commission felt that all at-risk buildings should be strengthened to 50 per cent of the building code. The ministry said this would be prohibitively expensive.

The commission also wanted to give councils power to demand stricter building standards or tighter timeframes for strengthening, but Mr Williamson said the Government was keener on national guidelines.

Q&A

Who would be affected by the Government proposals? Owners of commercial buildings or multi-storey, multi-unit residential buildings.

How would they be affected? If their building is assessed as earthquake-prone, they would have to strengthen it to 33 per cent of the design level of a new building. If it did not meet this level within this timeframe, it could be demolished.

How long would they have to act? Councils would have to assess all commercial buildings and high-rises within five years of a law change.

Once a building had been assessed as earthquake-prone, the owner would have 12 months to submit a plan for remedial work or demolition. If they chose to strengthen it, the remedial work would have to be done within 10 years.

Who will pay for the changes? The property owner would pay for all earthquake strengthening. The Government was considering tax incentives for earthquake strengthening in the consultation process, but said this was very unlikely.

Are any buildings exempt? Buildings which are low-use or had little passing traffic, such as rural churches or farm buildings, could be exempted or given more time to strengthen.

How do you know if your property is earthquake-prone? Councils would have to assess all vulnerable buildings within five years of a law change and release the details to the public. Some councils, such as Wellington, already have a public register. Auckland Council is currently assessing all earthquake-prone structures, and was expected to report back next year.

None of the Government proposals are final, and the public is being asked for feedback on the changes. Submissions can be made at http://bit.ly/RFWxp7. Regional meetings can be found at http://bit.ly/QLHV6s.