Media Backgrounder - Land Claim Settlements

MEDIA BACKGROUNDER – LAND CLAIM SETTLEMENTS

Issued November 2012

Timeframes for land claims settlement

EQC has two separate streams of work underway to settle land claims: settlement in the hill suburbs, and settlement on flat land (mainly in TC2 and TC3).

In the Port Hills, priority settlements (for instance, where a settlement is needed to allow building work to get underway) have been underway for some time, and the remaining settlements should be completed early in 2013.

On the flat, EQC still has to assess the estimated cost to repair damage. Unlike in the hills, some of the damage types are uncommon and information (e.g. about the expected cost to repair) is still being gathered. Cost assessments will begin early in 2013, with settlement following the assessment within two months in most cases.

Assessment will move roughly east to west over the course of 2013.

In any event, all land claims should be settled by the end of 2014.

Increased risk land damage categories

EQC has identified two additional categories of flat land damage. The categories are: land with an increased risk of liquefaction causing damage to a property, and land with an increased risk of flood.

These categories have been added because the Canterbury earthquakes have caused the land to subside. As a result in some areas the land is now more susceptible to future damage, affecting the long-term utility of the land.

Qualifying land is assessed on the basis of the risk of flood damage or liquefaction damage in a 1-in-100 year event. A 1-in-100 year earthquake would be similar to the level of shaking experienced during the September 2010 quake and not as severe as the February 2011 quake.

It is likely that EQC will cash settle land assessed as being at increased risk of liquefaction damage or flooding. With these categories of damage, it will often be impractical or undesirable to reinstate the land, for instance because:

 the house is largely undamaged and would be damaged by reinstatement, or

 the cost to reinstate exceeds the value of the insured land area.

Because EQC insures land up to 8m from the house and outbuildings (or 60m from the house if it is part of the main access way or supports that access) , there will be problems undertaking partial reinstatement works where the section is larger than the insured land area. Properties assessed as being at increased risk will still be able to be built on, to the relevant Building Code standard.

Which properties qualify for settlements on the basis of increased flood or liquefaction risk?

To qualify, a property must have a significant increase in the risk of flooding or of liquefaction causing damage to a property in a 1-in-100 year event from the risk posed before the series of Canterbury earthquakes.

Most of the land affected by this increase in risk is in a portion of the TC3 area in the east of the city, and most of the residential Red Zone.

Generally, land that was already flood-prone or liquefaction-prone before September 2010 will not qualify. This is because the basic utility of the land is unchanged, unless the risk has materially worsened as a result of the subsidence caused by the earthquakes.

Land with an increased risk of flooding

The assessment of an increased risk of flooding is informed by the results of flood modelling using the topographical information from LiDAR surveys that were flown after each of the earthquakes. LiDAR surveys are undertaken by laser scanning the ground surface from an aircraft. LiDAR elevation maps were created after each of the major Canterbury earthquakes and have been compared to record changes in land height. The LiDAR topographical information has been run through computer simulated flood models that simulate the extent of flooding from a 1-in-100 year event so a comparison can be made between the estimated flood damage before and after each damaging quake.

To be entitled to land damage settlement for increased risk of flooding:

 The land in its current state must be at risk of flooding in a 1-in-100-year rainfall or high tide event

 The land must not have been at risk of flooding in a 1-in-100-year event before the quake, or the risk must have materially worsened as a result of the subsidence caused by the quake

 The cause of the increased flood risk on the property must be due to subsidence of the insured property

 The landowner must have a claim lodged with EQC for building, contents or land for the event that caused the increased risk.

The Christchurch City Council has mapped the flood risk for a 1-in-50 year flood event. Being in an identified Flood Management Area or identified flood zone for a 1-in-50 year event does not automatically mean that a property might qualify for the increased flood risk land damage category. This is because EQC:

 assesses damage on the basis of a 1-in-100 year flood (ie: a more severe flood)

 does not factor in projected climatic changes into our modelling, or changes to flooding caused by change to uninsured land (for eg: a change in the flow of a river, or the building or demolition of a stop-bank – these effects are not caused by the damage to the insured land)  bases settlements on increased flood risk, relative to the condition before each damaging quake.

Land with an increased risk of liquefaction

The process of determining whether land is at increased risk of liquefaction causing damage to a property is more complex and time consuming than estimating flood risk.

EQC will determine the change in the risk of damaging liquefaction using data from aerial LiDAR surveys undertaken after each of the major earthquakes, the geotechnical ground tests from the drilling programme and measurement of ground water levels. The drilling is being used to collect data to understand the soil structure and the predicted performance of the ground during a future 1-in-100 year earthquake (i.e levels of shaking comparable to the September 2010 event).

The drilling programme

Where properties are within 50m of a drilling site used for TC3 foundation design testing, no additional drilling is needed. However, in some areas EQC has not undertaken drilling as all relevant properties are either insurer-managed claims or drilling is not required because foundation repairs are minor. In these areas, EQC is now beginning drilling. The EQC drilling will begin on the TC3 public land in Kaiapoi, Wainoni and North New Brighton and will move through many of the worst-affected TC3 suburbs, with an expected completion date of March 2013. We need to drill between 1500-2000 sites, but only a portion of these will be on private land.

Not all TC3 areas will get this extra drilling. A portion of the TC3 areas adjacent to the Heathcote will not be drilled because the land in these areas has not subsided due to tectonic uplift, and therefore its vulnerability to damaging liquefaction has not changed.

This drilling programme uses the same rigs, doing the same work, as is being undertaken for foundation design testing.