Property owners say heritage buildings are a Wellington problem

Press Release – Property Council Of New Zealand
Property Council Wellington urges Wellington City Council to treat seismic strengthening of heritage buildings with practicality and consideration of owners’ financial constraints.

Wellington City Council has nearly completed a major building assessment programme where it examined more than 5,000 pre-1976 properties in the city.

Out of the 684 buildings deemed as earthquake prone, 137 of those are heritage-listed.

Property Council New Zealand’s Wellington Branch has been advocating for regime change around heritage buildings requiring seismic strengthening work for some time now.

Although the branch strongly supports Wellington City Council’s Built Heritage Incentive Fund, it is nowhere near enough to assist with the number of earthquake-prone heritage buildings in Wellington and their crippling seismic strengthening costs.

To cite an example, a current heritage-listed building in Wellington’s CBD valued at $4.95 million will cost $6.1 million to upgrade. The owners of this building cannot afford this as it results in a loan-to-value ratio of 83 per cent which the banks will not finance.

Due to its heritage status, the building cannot be demolished either.

This is a common example for heritage buildings in Wellington. These sorts of entrenched views and rules will inevitably result in abandonment of the building or demolition by neglect.

Wellington City Council has allocated $400,000 to its fund for 2014, which although significant, is not sufficient for the type of hefty upgrade costs facing owners.

Wellington Branch president Andrew Hay says with owners unable to afford strengthening and being prohibited from demolition, the city’s rating base, public safety and amenities will suffer substantially if buildings are abandoned.

“It is simple. We are looking to promote a balanced consideration of heritage, economic and public safety factors. If upgrades are going to be law, people have to be able to afford them – otherwise owners, including owners of heritage buildings, should be allowed to demolish and rebuild.”

Content Sourced from scoop.co.nz
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5 comments:

  1. Nora, 16. July 2014, 14:44

    There have been a number of property owners who have just got on with the job of restoring their buildings. To name a few, I recommend a look at the Huddart Parker Building, Hope Gibbons Building and the Public Trust…..no suggestion of demolition.

     
  2. Phil C, 17. July 2014, 0:50

    Ahh, the old trick of landlords. Abandon a listed property so that it gets into such a state it has to be demolished. See it all the time in London. An option is to pass legislation permitting the council to sell buildings so abandoned by its owner.

     
  3. laura, 17. July 2014, 7:07

    Most owners of Wellington heritage buildings needing strengthening are severely underinsured and paying up to 50% more for insurance. Most will have to vacate the property while work is underway which is a significant inconvenience and an added financial strain. The Council needs to assist those on low and fixed incomes with low interest rates, not everyone has the funds at their fingertips to get on with the job of restoring their buildings in tight timeframes set by Council.

     
  4. CC, 17. July 2014, 12:57

    Observation 1: If you buy a heritage building, you buy a well flagged obligation – not a cheap section for a new building.
    Observation 2: If you can’t afford to strengthen the building you bought at a rock bottom price – sell it at the market rate. There are principled developers who are prepared to relieve you of your problem at a reasonable price.
    Observation 3: Andrew Hay does an excellent job of running interference spin for property investors whose integrity can be suspect.

     
  5. andy foster, 18. July 2014, 22:07

    Nora – you are correct. Some owners are being excellent in strengthening buildings, some could do it but aren’t being terribly constructive about it. However in this release the Property Council is highlighting that some owners are in the position that their building will cost more to strengthen than the building will be worth post strengthening. That really puts them in an impossible situation.

    Laura – Council does provide a range of assistance – advice, grants, reduced consent costs, rates relief. The timeframes aren’t unreasonable – they vary between 10 and 20 years depending on the nature and level of use of any given building (Government legislation under consideration suggests 15 years). We do need to keep making progress – an earthquake won’t wait for us.

    CC – yes I agree with you where a building owner has bought, knowing that a building is heritage and EQ prone, and it just looks like make money quickly and damn the consequences. However consider the situation where a not for profit organisation, a group of residents, a small family business, has owned a building for decades and is in the situation now as described above – the cost of strengthening is greater than the value of the building post strengthening, even after any Council assistance. That’s where if we want to save a building for reasons of public good we may need to come to the party. We will need to talk sooner rather than later about which buildings Wellingtonians really see as critical to save, and what mechanisms and level of support are appropriate.

    Regards

    Cr Andy Foster
    Chair – Transport and Urban Development

     

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