Calls for public database of property disaster risks intensifies

Tuesday, 16 July 2024

Climate change will increase flood risks in some areas, scientists forecast.

Some homeowners could be left with unsellable homes, or see the prices of their properties fall, as data on natural disaster and climate risk on individual properties becomes widely available, MPs have been told.

To fairly price properties as the country faces into the era of climate change, a central information source on all properties was needed, said Matt Whineray, chairperson of the Ministry for the Environment’s independent reference group.

Whineray was speaking to the finance and expenditure select committee on Tuesday in its ongoing inquiry on developing a national framework for how the country could adapt to climate change.

Everyone developing, buying, or funding a property needed the same information on climate and natural hazard risk to give them “fair warning” about the risk of those properties, he said.

Once information was widely available, it would result in the risks to properties being factored into their price, he said.

But the select committee heard it could also result in some properties becoming uninsurable, or extremely costly to insure, and banks may choose not to lend on some, rendering them effectively unsellable.

Hayley Taylor talks about escaping floodwater from family's Browne Street home.

Dean Schmidt from the New Zealand Banking Association supported Whineray’s call. “We need that granular data set, and we need it to be publicly available, so everyone can make the right decisions.” he told the select committee.

But he admitted under questioning from MPs that it could have a negative impact on some property owners.

He said should insurers, or banks, withdraw their services for homes in some disaster-prone areas, owners of those homes would be “effectively stuck”.

He could not say whether banks in New Zealand had withdrawn mortgage lending from any areas, but in Australia he said some banks no longer provided mortgages on homes in some places near the river in Brisbane.

Marje Russ, technical director of environment and sustainable business at engineering company Tonkin & Taylor, said it was not simple sharing risk information.

She pointed to the anger and frustration of homeowners in Kapiti Coast north of Wellington when hazard disclaimers were added to Land Information Memorandums (LIMs).

She warned against creating a situation where some people were “finding out overnight they were holding a parcel with a bomb in it they were not expecting”.

Multiple submitters told the select committee the Government had to decide who would pay for the costs of defensive infrastructure to protect communities, and compensation for property owners in the case of managed retreat from disaster-prone areas.

Different models of buyout exists, including not bailing out bachs, second homes, and not bailing out owners of properties bought, or developed, after climate risk was widely understood.

Whineray said action was needed to end the development of properties in risky places.

“We have to stop building in places which are already at risk,” he said.

Matt Whineray told the finance and expenditure select committee that funding needed to be fair, and recognise that ‘poorer’ New Zealanders could not afford to shoulder the costs of managed retreat.

Allowing development in such places created the belief that the Government should be responsible for bailing owners out in the case of retreat, or after a disaster, Whineray said.

MPs heard the Government needed to work out where the money to fund climate adaptation would come from, and how costs would shared between central and local government, and individual property owners.

Raewyn Peart from the Environmental Defence Society called for a climate adaptation fund built up through levies on property owners.

“This is going to be really, really expensive,” Peart said.

There needed to a compensation scheme for property owners forced to retreat, and principles nutted out for who qualified for compensation, she said.

Coastal erosion will threaten some homes in coming decades.

Academic Jonathan Boston foresaw a future of managed retreats from high-risk areas.

“Sometimes moving whole towns and suburbs will be required in coming decades,” he said.

Failure to fund compensation schemes properly would leave some people in “property purgatory” in the event of a managed retreat, Boston said. They would be unable to afford to move, and resist efforts to make them move voluntarily.

Rehette Stoltz from Local Government New Zealand, an association of local councils, said there needed to be a clear cost-sharing framework.

“Councils are going to be unable to meet the costs of climate adaptation alone,” she said.

Many communities had already started planning for climate adaptation, Stoltz said, but they needed a nationally consistent set of laws to empower them.

She said councils preferred managed retreat from high-risk areas as a last resort, but councils should have mandatory powers, including to cease providing services to areas that were no longer suitable for habitation.

There remains opposition to the direction of travel on climate adaptation from people who think it is threatening property rights.

Tanya Lees from the Kapiti Calm group called for a shift from the focus on taking pre-emptive actions based on speculative “alarmist” climate and sea-rise modelling.

This was being used to undermine private property rights, she said.

“The science is not settled,” she said.