Residents claim their properties were damaged when two state houses were demolished in Whanganui last month.
Housing New Zealand commissioned the work as it prepares to build 23 new homes throughout Whanganui, including five new homes on Akatea St in the suburb of Gonville.
Conroy King, 29, lives at a property opposite to the homes that were demolished and said he was gutted when he arrived home one day to see his chimney was damaged.
"They had been doing demolition work across from mine and my neighbour's properties with heavy machinery causing massive ground shocks," King said.
"Then I get home from work one day and notice a flood of water coming down my neighbour's drive. I happen to look up at my roof and there's a massive, almost soccer ball-sized chunk missing from my chimney."
King's mother, Andrea Townsend, helped him with the paperwork when he bought the house two-and-a-half years ago and spends a lot of time with him there.
She was staying with him at the time the damage was done.
"The neighbour's water pipe was fair gushing. I thought, 'Oh my God, what's happened?'
"I've rung up Westpac and they won't cover it. I'm trying to get hold of Housing New Zealand and they won't have a bar of it."
Townsend was told insurance would cover earthquake movement, but not movement caused by heavy machinery.
Housing NZ internal communications manager Paul Clearwater said it was aware of at least one complaint being made.
"At this stage we really don't have much to say as we are aware of the complaint and the complainant has been in touch," he said.
"If there is an official complaint it will be between our contractor and the complainant and an assessment of the alleged damage will have to be ascertained."
Townsend said she had not received this correspondence back from Housing NZ and would look into making a complaint with the contractor.
King's neighbour Graham Dynes had to pay to get his pipes fixed and is so fed up with a lack of response that he has put his house on the market.
Both Dynes and Townsend also say another neighbour had tiles damaged on their roof after the demolition, but they were unavailable for comment.
Dynes is worried King's chimney will fall on to his property and Townsend believes it will need to be removed and replaced.
As part of the redevelopment, two Hakeke St homes have also been demolished, as well as two on Patapu St and there are plans to demolish more on Harper and Rimu Sts.
Housing NZ plans to complete the redevelopment over two years.