This morning a estimated 5.1 earthquake close to Te Aroha shook Hamilton, Tauranga, Auckland and Rotorua. This region contains roughly half of our 5.1 million population.
Hopefully also a wakeup call for National about their consistent short term blindness about protecting our citizens. Just a day ago National’s building and construction spokesman, Andrew Bayly, was playing short-term politics by criticising a program to help strengthen apartments at risk of earthquake damage.
NZ is a country that has earthquakes. They are unpredictable about both their frequency and their intensity. Many of the faults are not mapped nor fully assessed for risk. You only have to ask the surprised citizens of Canterbury when they discovered a unknown fault complexes the hard way with a magnitude 7.1 earthquake in in 2010, plus a 6.2 and 6.0 in 2011.
The only ways to prepare for earthquake risks in NZ is to forward load risk management with ongoing adherence to updating risk assessment and building standards before an earthquake strikes and good insurance like our EQC cover for dealing with the preparation failures after the fact.
One important part of this is making sure that owner-occupiers in multi-dwelling buildings, who do not derive income from their property, don’t hold up the process for earthquake hardening buildings.
The Government scheme opened to applications for individual loans of up to $250,000 more than two years ago.
It was primarily designed for owners at risk of losing their homes due to financial hardship from large earthquake-strengthening bills, many of whom are in Wellington.
Written parliamentary questions by Bayly reveal only one application, which was previously declined, has been granted conditional loan approval after the scheme’s eligibility criteria were widened in May.
NZ Herald: “Fund for owners of earthquake-risk apartments a waste of money — National“
Basically Bayly’s argument appears to be that a single conditional approval was slow response after 2 years, and he seems to imply with his lack of an alternative that the work simply isn’t worth doing. Needless to say, this is exactly what we have come to expect from a National MP with their characteristic myopia and usual lack of forward thinking. He doesn’t suggest any better way of achieving the same purpose.
Bayly said he was disappointed the scheme has had such little impact.
“When taxpayers ask where all the money has gone that the Labour Government has said they have spent on worthwhile schemes, this is the value they are obtaining.
“It is an outrageous waste of money for such a poor outcome. Meanwhile, owners continue to live with the uncertainty and fear that their house may not be strong enough to withstand the next earthquake.”
NZ Herald: “Fund for owners of earthquake-risk apartments a waste of money — National“
My reaction after looking at that article was that Andrew Bayly was a complete fool about the technical and financial issues in his shadow portfolio. Despite his accountancy and military background, he clearly had no idea about the issues of the planning, logistics, or even the basics of leadership issues of how long it takes apartment blocks to agree to do this kind of work. 2 years is nothing. There also appears to be a lot of work going on in the background – which as far as I can see Andrew Bayly appears to have never asked about when questioning.
But Kāinga Ora, the scheme’s administrator, has received 56 expressions of interest from potential applicants.
Many of these people are getting themselves borrower ready, meaning they can provide all the documentation required for an application.
Kāinga Ora understood five potential applicants might be ready to make applications over the course of the next year.
NZ Herald: “Fund for owners of earthquake-risk apartments a waste of money — National“
To give an idea of the time frame for a fast rebuild process, just look at what I went through back in the mid-2000s.
Our apartment block of 61 apartments took about 4 years to get a full engineering assessment of a water tightness issue, a remediation plan, pricing, and agreement amongst the strata owners of the apartments about what to do with about the work. Most of that work was funded by the body corporate’s contingency fund and a some small special levies as the block was only completed in 1998.
My point is that our apartment process was assessed as being really fast by the engineers, builders, and lawyers. It took 4 years to get to the point where we could have called on something like the programme that Andrew Bayly is criticising after 2 years.
After 4 years, apartment owners could start talking to banks to raise real money with the kind of detail required to be considered for it. Which is where this programme starts kicking in. 2 years is nothing.
The intent of the programme is for those who have the worst financial issues.
Minister for Building and Construction Jenny Salesa said the scheme was about helping those most in need
“We understand how complicated it can be to fix an earthquake-prone building where there are many unit owners. Getting the finance to do this work can be difficult, if not near impossible, for some people in this situation.
“This loan scheme offers support to unit owners so that they are not put in a position where they are forced to sell their home or burdened by the stress of huge financial hardship.”
NZ Herald: “Government loan scheme opens for owners of quake-prone apartments“
After 4 years, it took me most of a year to get the financing in place from a bank. That would be a required preliminary process before applying for a loan under this programme. Due diligence with taxpayer funds would require that to happen to show the conditions for granting a loan under this programme are fulfilled.
in my case, the time was despite having a pretty good income and reasonable equity in my apartment. Lenders are understandably rather risk adverse about lending the large amounts required to retrofit a existing building. The process takes longer for people with less of stable income – like those on pensions or unemployed.
It is even harder with a rebuild than for most other forms of financing. Rebuild is a process that diminishes the saleable value of the property while it is going on. It exposes the lender to drops in equity from unexpected problems that get uncovered after builders start. Plus there is always a risk of a earthquake while the building is more vulnerable during the rectification.
So for Andrew Bayly, currently number 14 on the National bench (previously 3rd in the second Judith Collins reshuffle), to make such dimwitted and inept comments about a programme that started a mere 2 years ago is ridiculous. Unfortunately it also seems to demonstrate yet again the general lack of competence in the National caucus. Starting from the incoherent critic Christopher Luxon with his curious inability to articulate what exists of the detail of National’s policies. Through to few of the front-bench being able to articulate what National’s policies are on anything that can’t be expressed in a slogan small enough for Mike Hosking to remember and parrot.
Andrew Bayly just reminds me of the similar levels of incompetence and lack of understanding that Gerry Brownlee, also 3rd in the National lineup, displayed after being appointed as Minister of Earthquake Recovery after the 2010/11 Canterbury earthquakes. It isn’t hard more than 12 years later to argue that he was mostly competent at slowing the rebuild.
Hopefully National could at least present their current non-existent policies about earthquake risks, their ways to prevent loss of life and property in earthquakes, or even an awareness that earthquakes will happen in the future. Then at least they’d have a basis to criticise a government that is actually doing something about all of these.
Updated: amended current position in National lineup.
I have a BSc in earth sciences, a MBA in operations management, worked as a manager in various contexts, was a NZ territorial, have a lot of experience in military training, a long interest in politics and programming, and obviously I like living in a apartment. Please comment about opinions and facts in the post or related topics rather than the author.
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