Residents of Christchurch's Red Zone now have two offers they can choose from. But they really do have to choose one or the other.
The Government's response to the Christchurch Earthquake is out, introducing Christchurch to the new reality of Red/Orange/Green/White Zones. If nothing else, the announcement should institute a change to that stand-by Christchurch opening conversation gambit: "what school did you go to?" Now it will be; "what Zone is your place in?"
How this response works is going to vary individual by individual. Over at Public Address, David Haywood has already posted on the hole it appears to leave him in. I suspect there'll be a lot of others with similar tales.
But here's the question for today. Let's say you are unlucky enough to be in the "Red Zone" (which likely will expand, note, as the "Orange Zone" and "White Zone" land gets looked at more closely). And let's say neither of the Government's two offers work for you ... in that you think they leave you in such a bad financial state that you can't afford to take them. What then?
Well, one prospect is that you will end up as a lonely hold-out in a largely deserted area of demolished houses with little in the way of services. That in itself will be enough, I suspect, to get most people moving out irrespective of the financial hit they have to take.
But let's say that, although it is in the Red Zone, your house is in reasonable shape, it still has services, and you just don't want to (or really feel you can't) leave. What then?
Well, at the moment, the Government is speaking the language of offers. According to the press release, "Residents will then have nine months to consider the offer of purchase." Which may make it sound like the decision rests with the land owner - if you don't like the offers, then you can just stay on living there.
Except ... probably not. Because lurking behind the Government's offers is the Canterbury Earthquake Recovery Act 2011, and in particular section 54. Under that section, "The Minister may acquire land compulsorily by causing a notice of intention to take land in the name of the Crown to be published in the Gazette and twice publicly notified ... ."
Now, we can't say for absolute certain, and the Minister himself may not yet know for sure, but I think it's pretty clear that there won't be anyone allowed to stay living in the Red Zone. That's certainly the implication of this news story. So folks who won't sell voluntarily will, I suspect, find themselves selling involuntarily after 9 months.
Except, here's the rub. If your land is acquired compulsorily under the Canterbury Earthquake Recovery Act 2011, you get compensation under subpart 5. And that compensation is determined by the Minister in accordance with s.64.
And s.64 makes it crystal clear that "in the case of the compulsory acquisition of land, [compensation is determined] as at the date of the compulsory acquisition"; meaning "the Minister must determine compensation having regard to its current market value as determined by a valuation carried out by a registered valuer."
So, here's the position those in the Red Zone face. They can accept one of the Government's two offers of compensation at 2007-values. Or, in nine months time, they can face the high probability that the Government will force them to sell at the present value of a quake-ravaged piece of land on which no-one may build in the midst of a sea of demolished houses.