Some Hawke’s Bay Cyclone Gabrielle victims involved in Category 3 voluntary buy-out processes with councils might be asked to shell out for some of the costs of demolition.

The possibility arises in a report going to a Hastings District Council meeting on Thursday, with a similar report being prepared for a Napier council meeting next month, as a result of discussions between staff of the councils.

The purpose is to consider amending the Category 3 Voluntary Buy-Out policy (VBO) “to enable councils to recover a contribution from property owners, in certain cases, towards the cost of demolishing a dwelling (if relocation is not an option), and to enable minor changes to allow for a more efficient process”.

The report, recommending both councils adopt the amendment and noting objectives of affordability to ratepayers — demolition not covered by the Government’s share — has been prepared following the realisation that some property owners were getting insurance much greater than the values of their homes.

Total cost of demolition of Category 3 properties has been estimated at $6 million, and the report estimates council costs could be reduced by $1.2 million to $2 million.

If adopted, the policy would apply to offers made after February 1.

Many in Esk Valley remain in limbo as the first anniversary of the cyclone approaches. Photo / Connull Lang

But four options are presented for councillors in the report, from no change to the policy to amending the policy to cover the demolition aspect.

There are about 126 properties on land in the Hastings district where rebuilding is not practicable because of flood risk, and one owner has told Hawke’s Bay Today that while the buy-out is taking place, it has cost him $70,000 for demolition, and he doesn’t know if that will be recouped.

A buy-out allows for an offer from the council for the market value of land under 2ha, or for a relocation grant over 2ha.

The present policy requires the council to pay for demolition, but the paper going before council says issues have arisen on whether owners should contribute to demolition if they have already been “well compensated”.

It says fully insured owners would probably be covered for demolition, but as buy-out policy allows at present, owners retain the compensation while demolition costs are met by the council and its ratepayers.

Cyclone Gabrielle swept through Hawke’s Bay on February 14, with an estimated 700 homes determined unlivable throughout the country.

The Hastings and Napier councils in September confirmed the adoption of a Voluntary Buy-Out Policy to enable the voluntary purchase of eligible Category 3 residential properties in Hawke’s Bay.

The Hastings council said in December it had over 100 initial meetings with owners, with first offers made for some last month.