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Cyclone demolition decision waits on more information


Hastings District Council has today left a proposed change to the Cyclone Gabrielle Voluntary Buy-out Policy to ‘lie on the table’, to allow time for more information to be provided to councillors.

The paper, presented to the public Council meeting [February 1], asked councillors to decide whether homeowners who have received insurance pay-outs greater than the market value of their homes should make a contribution towards the demolition of the homes being purchased by Council.

Given that Council is effectively acting as the insurer for those without any cover, under the proposal they would also be asked to make a contribution.

The proposed change to the policy has been triggered by ‘real-time’ experience since the buy-out process started in October, which had developed differently than was expected at the time of writing the policy.

The critical aim of the policy is that homeowners in areas that pose a risk to life during flooding events are able to leave their homes and land, and move to another area. To enable that, Government and Council (taxpayers and ratepayers) agreed last year to fund the costs not covered by insurance.

Based on best available information at the time the policy was written, it was believed that the majority of properties were likely to be underinsured (in some cases not insured), and therefore Council included paying for the demolition so that was not a barrier to people moving.

However, since enacting the policy, Council had seen a large proportion of property owners receiving insurance payments that, combined with Council/Crown offers for the affected land, were resulting in settlement packages which exceeded the agreed market value of the house and land; with up to 70 per cent of properties in this category.

At the start of the meeting, Hastings mayor Sandra Hazlehurst invited Esk Valley resident Dan Gale, the owner of a Category 3 property, to address the meeting. He spoke passionately and eloquently for a group of Category 3 residents who felt the proposed change would add further intolerable stress to people involved in the buy-out process.

Mrs Hazlehurst thanked Mr Gale, and acknowledged all of the residents who had personally attended the meeting or were watching on-line, and their losses and heartache.

The following discussion was robust, with councillors acutely aware of the need to be fair to all parties.

Mrs Hazlehurst said balancing the needs of all was “undoubtedly very difficult and very emotional, and, in fairness to both our most severely impacted residents and our ratepayers who are funding this policy, we will not make this decision without all of the information we need.

“I am acutely aware of the distress our people who have lost their homes are under. But, equally, as raised by councillors in our meeting, I’m also acutely aware that in this cost-of-living crisis we have families and elderly who are struggling to put food on the table. We must take great care to be fair to all parties.”

Council intends to revisit the matter before the end of February.

To see the in-meeting discussion go to:


Examples for typical groups should the proposed change be approved by Council:          

Fully insured

Council and property owner agree a valuation.

Property owner is fully insured (likely including a demolition component) with the proceeds exceeding the independent market valuation.

Under the policy, the homeowner chooses the option that allows them to keep the insurance payout and receive a payment for the land (under 2ha) or residential rights of the property (over 2ha).

That means the property owner (by keeping the insurance including the demolition component) is receiving more than the property’s value and the ratepayer is paying for the demolition.

Council works out the cost of demolition based on a rate per m2. The amount taken back is a small proportion of the payout.


Council and property owner agree a valuation.

Property owner is insured (including demolition allowance where the house is not deemed repairable) however the proceeds are below or at the independent market valuation.

Under the policy, the homeowner chooses the option that allows them to ‘sell’ the property to Council at the agreed price, less the insurance payment.

Council ‘tops up’ the difference between the insurance payout and the agreed value. In this scenario Council has had the benefit of the ‘demolition component’, as it has lowered the amount paid to the owner, so does not claim further demolition costs.


Council and property owner agree a valuation.

Property owner has no insurance (and therefore no demolition allowance).

Under the policy, the homeowner chooses to have Council buy the property at the agreed value.

Given the Council is effectively acting as the insurer providing a full insurance payout (which would include a demolition allowance), it is considered fair to the ratepayers (who are effectively paying for the demolition) that the equivalent of a demolition contribution is deducted from the payout.


2 February 2024

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