Costs for flood work could rise

Rising Hutt Valley house prices could force ratepayers to fork out even more cash to buy up properties earmarked for demolition as part of the region’s flood protection programme.

Greater Wellington Regional Council has budgeted $42 million for acquiring the 117 properties it needs to improve flood protection between Melling and Kennedy Good bridges.

But for the second time since signing off on the property purchases in December 2015, regional councillors have been told the property boom could blow the project’s budget.

Alistair Allan, the council’s floodplain management plan implementation team leader, said asking ratepayers for more money was not out of the question, despite a 20 per cent ‘‘contingency’’ being factored into the original budget.

On top of rising house prices, the council was also stung by a 2016 law change that saw the required compensation payment to homeowners under the Public Works Act jump from $2000 to $50,000.

At the time, council spokesman Stephen Heath said that was likely to push its costs up by $4m.

It is not yet known how much rising property prices could add to the flood project’s total.

Allan said the council still hoped to manage the situation and keep within budget, pointing out the project was tracking under budget so far for 2017.

‘‘We may have to step in, in the future [to advance property sales] but, at the moment, our priority is to stick to managing the costs as much as possible.’’

There were no plans to fast-track purchase of the properties on Pharazyn and Marsden streets, in the suburb of Melling, before the 2021 deadline, he said.

‘‘It could happen but, at the moment, we haven’t made that recommendation to council. We’re open to anybody who owns one of those properties to approach us but we’re not pressuring anyone to sell to us.’’

Professionals real estate agent Shane Brockelbank said housing prices in the area had increased dramatically during the past 12 months.

In Naenae, a three-bedroom state

"At the moment, our priority is to stick to managing the costs as much as possible." Alistair Allan, Greater Wellington Regional Council's flood-plain management plan implementation team leader

house typically sold for between $370,000 and $390,000 a year ago but he had recently sold three such properties for between $475,000 and $490,000.

The council was in a difficult position because it was working off registered value amounts for properties, and they would probably sell for more than that, he said.

‘‘It’s very hard to tell what you’re going to get at the market. It’s hard to even appraise properties at the moment.’’

The council has bought eight properties so far and confirmed another two sales. It planned to buy the remaining properties gradually over the next few years.

Land not used for the stopbank widening would be on-sold, and it was hoped that this money could offset some of the rising purchase costs.

Along with Hutt City Council and the New Zealand Transport Agency, the regional council was looking at options to transform the area around Melling train station into a community hub.

It hoped this would encourage development of businesses such as childcare centres, cafes and pet-care facilities.

That could increase the land value of surrounding sites, allowing the council to recoup some of the money spent, Allan said.