Scoop Election 08: edited by Gordon Campbell

On how the government is ducking responsibility for meeting needs in Christchurch

April 24th, 2012

Like events in some 19th century Russian novel, hardship in Christchurch keeps grinding on, while the powers-that-be appear quite indifferent to the suffering occurring all around them. For months, the shortage of housing and the related escalation in rents in Christchurch has triggered calls for Earthquake Recovery Minister Gerry Brownlee to impose some form of rent control, at least until the city’s rebuild begins to resolve the situation. Brownlee’s response has been that such things are best left to the market – and he will do nothing to intervene.

It took recent media revelations to finally spur Brownlee to order the speeding up of repairs to even the least damaged of the state housing in the city.


This month, The Press revealed 500 quake-damaged state houses were still uninhabitable 14 months after the February 22, 2011, quake despite the city’s housing shortage. The delay prompted Earthquake Recovery Minister Gerry Brownlee to order Housing New Zealand to speed up repairs.

Housing NZ said yesterday repairs to the 115 least-damaged vacant houses had been “accelerated” in the past few days… Work on repairing the houses will begin in May.

The abiding lesson? Only if you have the power to raise a fuss sufficient to cause political embarrassment, are you likely to get relief in today’s Christchurch. Some insurance companies, for instance, are giving variable responses and dragging their feet when it comes to meeting the “full cost” of replacement of houses in the red zone. These delays have led a community group of home-owners to band together and pool their information on how insurance companies have responded, even when the same policies are involved. Their findings: that those with the resources to pursue the insurance companies for satisfaction are faring better than those who don’t.

Brownlee’s response? That he shouldn’t intervene – or evidently, even talk to the Insurance Council about the behaviour of some of its wayward members – and that the community group was to be applauded for its (desperate) actions!

The behaviour of the insurance industry has now come to a head in a distinction (between repairs and replacement) being made with respect to housing in the red zone that can nominally be repaired, despite the fact that being in the red zone they cannot be occupied.

Some insurers have been trying to argue that their obligations extend only to repair, regardless of the state of the land underneath. The insurance companies baulking include the Southern Response Earthquake Services company that was formed by the government to settle $1.3 billion of AMI claims in Christchurch.

The head of the company charged with settling AMI insurance claims in Christchurch is sticking with its legal advice despite another legal opinion indicating some policyholders may have been short-changed. The opinion [which was obtained for the home-owners concerned by Christchurch MP Lianne Dalziel] has come from an insurance specialist, who says insurers cannot offer payment for just repairs to red-zoned owners where the land is so badly damaged it is unlikely to be rebuilt on for some time.

Duncan Webb, a partner at Christchurch-based law firm Lane Neave, says says many red zone homes are not badly damaged, and some insurers believe they need only pay for the damage that has occurred. But he says if for all practical purposes a property is lost, the owner can get full compensation. While it will depend on individual policies, he says in many cases, insurers may have to pay owners the full replacement value of their homes. Southern Response Earthquake Services…chief executive Peter Rose says the zoning a property is given has nothing to do with insurers, and the company does not cover damage to land.

[Dalziel press release (legal opinion attached).]

As Christchurch MP Lianne Dalziel said on RNZ this morning, the home-owners affected by this distinction are being invited to take the case to court to get a definitive ruling – a route they can scarcely afford to take, and which they do not have the luxury of time to pursue. Again, the government appears to be absent from this crisis in Christchurch, as well. Why doesn’t Brownlee offer to arbitrate these pressing disputes?

The lack of leadership being shown is blatant, and extraordinary. At the outset, Gerry Brownlee was given sweeping powers to enable him to meet the needs of the residents of Christchurch and help them to speedily rebuild their lives. These powers were not bestowed simply to enable developers to bypass bureaucratic red tape – or merely to sideline the local elected representatives on the Christchurch Council. Those powers were given to help ordinary citizens. Perhaps Czar Brownlee needs to get out among them a bit more often, before they resort to revolution.

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    1. One Response to “On how the government is ducking responsibility for meeting needs in Christchurch”

    2. By Tricyclist on Apr 25, 2012 | Reply

      Anyone else think it is quaint when the governments saysit won’t intervene, and ‘the market’ will address issues like the rental shortage in Christchurch, but then seems quite happy to circumvent ‘the market’ when it comes to things like convention centres..?
      “Our” PM must be part magpie – likes shiny things (convention centres, overseas movie studios), and not above picking on the defenceless (new born lambs – - – - beneficiaries)

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