Building and Construction Minister Poto Williams. Photo / Mark Mitchell
Building and Construction Minister Poto Williams. Photo / Mark Mitchell
Ministers are considering the findings of a review into a loan scheme for the owners of earthquake-prone buildings after no one has applied for a single cent of the $23 million fund.
Applications opened for the Residential Earthquake-Prone Building Financial Assistance Scheme in September last year, offering low interest deferred repayment loans of up to $250,000.
It's designed to offer support for owner-occupiers so they are not forced to sell their home or burdened by the stress of significant financial hardship to pay for earthquake strengthening costs.
But no one has applied.
Kāinga Ora, appointed to deliver the scheme, reported there have been 44 expressions of interest but no full formal applications.
Cabinet previously agreed the scheme should be reviewed 12 months after its launch and ministers are now considering that report’s findings.
Building and Construction Minister Poto Williams said an analysis of the loan’s uptake was a key part of the review.
“Over this period, MBIE [the Ministry for Business, Innovation and Employment] gained valuable insights into the barriers preventing applications to the scheme,” she said.
Williams said any changes to the scheme will need to be approved by Cabinet and will be announced in due course.
There are about 590 earthquake-prone buildings in Wellington. Photo / Mark Mitchell
An MBIE spokesperson said a date was yet to be set for the public release of the report.
Inner City Wellington has raised concerns with MBIE about the eligibility being too limited, the interest rate being higher than expected, and the scope of what the loan can be used for being too narrow.
Despite this, the group's Geraldine Murphy thought at some point there would be applications for the loan scheme.
"I think for owners who just want to get in, get the money, get out, and never get into an apartment again, it will provide them with an option that they wouldn't have otherwise had. "For some owners it will just be a matter of timing because it takes a long time to work through these projects."
It can take years to get engineering reports, build consensus within body corporates, finance projects, and do the construction - let alone in an already constrained market.
Wellington City. Photo / NZ Herald
But Murphy said irrespective of those challenges, a number of owners have stated they simply do not want a debt for a Government imposed compliance burden.
"People really resent having to take on debt for this Government-imposed cost. It comes back to that fundamental thing, should we be doing this to apartment owners? Is it the right policy?"
Many owners have openly vented frustrations about funding public safety outcomes even though their buildings are not used by the public
Wellington has about 590 earthquake-prone buildings. The deadlines for strengthening them spike in 2027 when 228 notices will expire.
Wellington City Council is in the dark about the future of hundreds of these buildings, despite the expectation the capital will have a significant earthquake in our lifetime.
The council acts as the regulator and surveyed owners of earthquake-prone buildings between June and November this year. Only 40 per cent of them responded, presenting a "blind spot" for the council.
Building owners do not have to tell the council their intentions to do work before their deadline expires, so there's no way of knowing what the other owners are planning.
