The Insurance Council is warning the densification of Wellington's CBD could leave thousands of people homeless in a significant earthquake.
Wellington City Council has held its first day of spatial plan hearings as it mulls over how to accommodate up to 80,000 people over the next 30 years.
The plan includes densification in the central city, primarily through increased building heights.
Insurance Council chief executive Tim Grafton submitted to councillors they needed to be careful where future housing is built.
He noted the accommodation of growth equated with the expectation that more people would be living in larger apartment buildings.
He drew a comparison with the Christchurch earthquakes where damage resulted in the decision to prohibit entry into buildings within the four avenues for more than two and a half years.
It affected more than 1000 buildings in the city's CBD.
"This should be factored into how recovery efforts would cope with many thousands of Wellingtonians made homeless in similar circumstances, Grafton said.
"Similarly, consideration must be given to avoid development in areas prone to other climate change impacts such as areas vulnerable to flooding, rising sea levels and coastal erosion."
Other issues raised in the spatial plan hearing included the battle between building affordable housing and protecting heritage.
One resident described the plan as a "childish wish for housing" and compared the capital's heritage to the ancient city of Rome.
Debate over Wellington's spatial plan has largely centred on housing affordability versus protecting heritage. Photo / Mark Mitchell
Another resident, who now has adult asthma after living in rentals she described as "straight up health hazards", said affordability and people's health should be prioritised over heritage.
The tension between these issues has gained high profile traction during community consultation on the spatial plan, but resilience has arguably been less prominent.
Grafton said the Christchurch experience also showed liquefaction of soft soils could create extensive damage to buildings.
"Decisions were taken to red zone the most vulnerable areas to avoid future risks and prohibit building construction on that land. We note that much of the Wellington CBD is constructed on reclaimed land which is subject to liquefaction."
Civic Square, for example, is built entirely on reclaimed land and is facing an uncertain future with several buildings closed due to seismic issues.
Just this week Wellington City Council confirmed it was getting a $38 million payout for its earthquake-damaged Civic Administration Building (CAB) after a four-year wrangle with insurers.
In his submission on the spatial plan, Grafton also noted the challenge of settling insurance claims in multi-unit buildings, as experienced in Christchurch.
"Where cross-lease situations existed, delays occurred because individual unit owners all had to agree to any remediation solution which was complicated by having some units uninsured and other units covered under different insurance policies."
Tim Grafton chief executive of the Insurance Council of New Zealand. Photo / File
The more recent experience from the Kaikōura earthquake showed multi-storey structures built within the previous decade became constructive total losses, meaning the damage was so significant it was not worth repairing them.
This was despite them being constructed in excess of the New Building Standard.
But Grafton said this standard focused heavily on life safety rather than the building's ability to avoid seismic damage.
"It is concerning that NBS rating system is often used to market building resiliency and it should come as no surprise that insurers and reinsurers have little confidence in the NBS in assessing building risk and it is not a primary metric used by modelling companies who assess the probable maximum loss from major seismic events to inform reinsurance sale and purchases decisions."
Willis Bond is heading a development on Victoria St which will end up being the capital's fist ever base-isolated apartment building.
The build includes 24 base isolators, effectively separating the building structure from the ground.
