Wellington Central MP Grant Robertson has taken a swipe at the insurance industry saying he doesn’t like the way the city is being treated and it’s unfair.
He spoke at a sod-turning event this morning at the Victoria Lane Apartments site, which will be the first ever base-isolated apartment building in Wellington.
The building will be wrapped in a diagonal grid of steel and have 24 base-isolators separating its structure from the ground, meaning it should withstand a one in 1000 year earthquake.
Robertson told the Herald base-isolation was a more immediate solution to the city’s insurance troubles because it provided absolute security and confidence for buyers.
“What we clearly need to be doing in Wellington, given the way the insurance industry is going, is making sure that we go above and beyond when it comes to seismic strengthening.
“What’s happened over the last few years is people have worked really hard in the city to get their buildings up to earthquake standards and earthquake codes only to discover that makes no difference whatsoever to their insurance premiums, and to me that’s disappointing.”
Inner City Wellington, a residents’ association, presented case studies of insurance premium hikes to the governance and administration select committee in November.
One building, built in 1962 and converted to apartments in 1994, was strengthened to 45 per cent of the New Building Standard in 2015 at a cost of more than $1 million.
The year it was strengthened, the cost to insure the building was $23,000, but fast forward to 2018 and the cost had increased to more than $56,000.
Robertson said the Government has been working through insurance issues and assessing the role the Earthquake Commission has to play, the fruits of which would be “announced in good time”.
Inner City Wellington supports proposals reported from the Wellington Mayoral Insurance Taskforce to increase EQC’s cap to $400,000.
Insurance Council chief executive Tim Grafton has previously pointed to the more than $1 billion of insured losses incurred in 2016 after the Kaikōura Earthquake, despite its epicentre being more than 200km from the capital.
“Even modern buildings constructed this century became total losses after that earthquake and this has added to insurers’ understanding of the risks.
“Obviously each insurer will have its own appetite for risk in Wellington and which buildings they are prepared to insure.”
The Victoria St development includes 123 premium one, two and three bedroom apartments, 90 per cent of which are already sold.
The prices they’ve sold for range from $600,000 to $970,000.
Robertson said those figures showed new apartment builds with base-isolation could be within the affordability range for many Wellingtonians.
“We’ve got to keep looking for ways of making that kind of building more affordable, but I think this apartment building demonstrates that it’s at least possible for people to be able to buy in the inner city.”
Willis Bond director Dave McGuinness said the decision was made to base-isolate the building following the Kaikoura Earthquake.
“We quite honestly weren’t sure if people wanted to live in apartments in Wellington after that event, we were really worried how the market would fare.
“They were really shaken up, both the buildings and the people, so it was quite scary for many… everything has settled down but I think we realised things needed to change.”
McGuinness said base-isolation was the best way to build high rise apartments because it was safe and would help with insurance issues.