Newsroom has learned the number of properties being considered for managed retreat or other solutions after the Auckland anniversary weekend floods – but neither the council nor insurers is willing to pick up the final bill
West Auckland residents say they could sue the council for granting consents to build homes in highly flood-prone areas.
Morgan Allen is a member of the West Auckland Is Flooded group, lobbying for the council and Government to bail out flooded homeowners.
He and his partner first spoke to Newsroom in the days after the devastating January 27 floods. They know they're unlikely to be able to return to their flooded west Auckland cottage, but until local and central government confirm that, they're stuck in limbo.
Four months on, they – like many others – are paying a mortgage on a house they can't live in, and paying rent on temporary accommodation. They're unable to move on or move out.
READ MORE: * Govt to pick up some flood retreat costs that insurance won't * Flood victims plead for urgent Govt help to retreat from devastated houses
"Our concern is that even if there is some sort of managed retreat programme implemented, how long is it going to take?" says Allen. "Because the longer it goes on, people are still going to have that pressure of the mortgage and rent."
Insurers say Auckland Council will consult with 400 to 500 property owners on managed retreat or other solutions, after the floods and landslides of January 27. Allen expects to be among that number.
This week, the Government and council, working off data supplied by insurance companies, are to complete assessments of homes in west Auckland that are considered low-risk – so families can settle with their insurance companies, return and rebuild.
But it will be a longer wait for those like Allen whose homes fall into the higher-risk categories.
Tower chief executive Blair Turnbull says managed retreat is the last resort, if risk to homes can't be mitigated. "A very small proportion will have to look into managed retreat and those numbers, in the case of Auckland Council they have shared, are roughly 400 to 500 properties being considered for managed retreat," he tells Newsroom.
"The cost of addressing flood risks in an acceptable timeframe is beyond the capacity of Auckland Council alone. As the mayor has previously stated, Auckland Council is not a guarantor of private property interests." – Mat Tucker, Auckland Council
Tower last week posted a $5.1 million loss for the six-month period ending on March 31, which it attributes to this year's catastrophic weather events. But it says it's helping to manage that impact with tools like risk-based pricing, under which flood or slip-prone properties will be charged steeper premiums.
"We've said this a few times: never let a serious disaster go to waste," Turnbull says. "This is the catalyst we've needed to really look into better ways to plan and manage all the flood events in climate change."
"This has been a real pivotal moment. It is actually delivering good outcomes. We've got to remember that both the Auckland Anniversary floods and the North Island event, Gabrielle, have affected tens and tens of thousands of people and businesses. A very small proportion will have to look into managed retreat."
When Tower rolled out risk-based pricing for the 170,000 homes it insures, about one in 100 homes faced "very high" premiums and were advised they might be better to seek insurance elsewhere. The grim reality, the company acknowledges, is the risk will be too high for Tower and other corporates to insure some New Zealand properties in coming years.
Law firm Simpson Grierson last week advised the nation's mayors and council executives on contrasting challenges of reactive retreat from this year's severe weather events, and managed retreat from the gathering impact of climate change. At a forum in Wellington on Friday, it highlighted the risk that councils may be sued by unhappy property owners.
Auckland Council has pulled out of Local Government NZ to save costs, so it wasn't represented at the forum – but it says there's still more work to be done to confirm which properties will face managed retreat.
Mat Tucker, the council's group recovery manager, says he appreciates many Aucklanders require certainty but further investigative work is needed before these locations can be confirmed.
"We continue to work closely with government and the insurance industry to provide them with Auckland information to inform their national policy decisions," he says.
"As Minister Robertson has signalled, government decisions are expected shortly, and we hope this will provide clear policy direction and an engagement and funding pathway.
"The cost of addressing flood risks in an acceptable timeframe is beyond the capacity of Auckland Council alone. As the mayor has previously stated, Auckland Council is not a guarantor of private property interests, and any use of limited public funds needs to be prudent and consistent with public benefit."
Allen says he knows of more than 200 properties in West Auckland that are uninhabitable. There are another 100 to 120 properties in Muriwai that aren't liveable, though some might be able to be remediated. And more still scattered around Piha, North Shore, Mt Roskill, Remuera and south Auckland.
For some like Allen, there may be a legal fight demanding the council take responsibility for consenting the properties, and pay them out.
"If they don't do something here, then there is the real potential for people to take out class actions against the Council for negligence.
"Yes, they're not a guarantor of private property interests," he acknowledges. "But I think they've essentially created a loaded gun over the past 30 to 40 years by consenting homes in the first place that shouldn't have been there, consenting further development in these areas that increased stormwater runoff, and then investing no money to upgrade or maintain the waterways."
"The funding of managed retreat will be the biggest challenge facing New Zealand, particularly as our land ownership model is freehold and the market value of coastal land (in particular) is high. The difficulty will be developing a funding model that is both fair to those that need to relocate, but also equitable for the community as well." – Mike Wakefield, Simpson Grierson
But as much as some will go to court to demand the council or Government bankroll managed retreat, equally, there will be those who don't want to leave their homes, and will fight tooth and nail against mandated retreat.
Simpson Grierson partner Mike Wakefield says beyond the Christchurch quake litigation, the most relevant example would be the litigation challenging the retreat from the high-risk debris flow on the Awatarariki Fanhead at Matatā.
"While this process involved retreat and the removal of land use rights, it was in response to a debris flow event that had caused significant damage (circa $20m) and which required an immediate response based on the known elevated level of repeat risk," he tells Newsroom.
"The process was led by the Bay of Plenty Regional Council and Whakatāne District Council, and involved an appeal to the Environment Court."
He emphasises the difference between the risk categories the Government has set up in response to this year's floods and cyclone, and the more enduring managed retreat challenges that will be addressed in the Climate Change Adaptation Bill, due to be tabled by the end of this year.
"The risk categories were announced by the minister as part of his role in supporting Cyclone Recovery," Wakefield says. "Defining the risk categories is the first step in providing certainty for affected landowners, but the process steps beyond that remain a grey area. All signals to date have been that the implementation of those categories will be locally led, but supported by central government."
He says Auckland Council, as a unitary authority with the powers of a territorial and regional council, would oversee the 400-500 retreats in the city. "It would be open to it to follow a plan change process that sought to extinguish existing use rights for the affected land, but that would be complex and subject to rights of appeal," he says.
Wakefield warns that outside of the Resource Management Act process, there is scope for other legal challenges, including judicial review of decisions made by the council in relation to cyclone-affected land.
"You want the Government to reach out proactively to deal with the longer term challenge, but we're in a situation now where you've got people who have been displaced or whose homes are wrecked already. You've got to address that immediately." – Morgan Auckland, West Auckland residents' group
For the bigger managed retreat challenge, he says the first question to be asked in relation to funding is which model will be used to implement managed retreat. "If it is to be a central government-led process, then there will be a wider set of funding tools available – for example tax revenue, new levies, funds. If it is to be led by local government, then the current funding tools are more limited, focused on rating, and would require review.
"The funding of managed retreat will be the biggest challenge facing New Zealand, particularly as our land ownership model is freehold and the market value of coastal land (in particular) is high. The difficulty will be developing a funding model that is both fair to those that need to relocate, but also equitable for the community as well."
Morgan Allen agrees: "The Government's in this bind, they're trying to work out simultaneously how they manage this long term – and they've got the immediate crisis on hand," he says.
"You want the Government to reach out proactively to deal with the longer term challenge, but we're in a situation now where you've got people who have been displaced or whose homes are wrecked already. You've got to address that immediately."
