High-rise, high risk?
The Kaiko¯ura quake was perfectly tuned to shake up Wellington’s apartment buildings. A year on, Nikki Macdonald finds the fear of high-rise living has largely ebbed away, but insurance issues – and questions about the future of inner-city living – remain
When the shaking stopped, Bede Dwyer expected to look down on to a city of felled buildings and mass casualties. He got up from the popped slats of his bed, walked past his smashed television set and crockery – past the microwave that had been thrown out of the wall – and down the stairwell, with its dandruff of plaster and concrete chips.
‘‘I thought it was going to collapse up there, for sure, it felt that violent ... I thought lots of people would have died and buildings and houses would have been completely levelled. So I was really surprised when I went outside – that everything was relatively fine.’’
Dwyer, 31, took photos of his trashed flat – on the 13th floor of Soho Apartments, just off Wellington’s entertainment strip – so people wouldn’t think he was being a drama queen.
Morag Hatcher did the same, snapping a pic of the wall crack she could stick her fist inside (and feel cold air) as a ready answer to those asking why she’d moved out of her 9th floor Soho flat.
The timing was lousy – Dwyer was about to be made redundant from his job at the Earthquake Commission, just as the claims came rolling in.
Last November’s magnitude 7.8 quake disproportionately battered Wellington’s apartment blocks, its frequency perfectly tuned for maximum shaking of mid-height buildings. A Wellington City Council survey of 803 apartment residents found two-thirds fled within an hour of the quake. While the fear has faded, the insurance nightmares – and questions about the central city’s resilience – remain. Neither Dwyer nor Hatcher stayed the quake night in their apartment. When Dwyer moved back in from his friend’s Thorndon couch a couple of days later, front doors were still wide open. Frightened residents had simply walked (or run) out.
‘‘I knew, having worked for the Earthquake Commission, you’re supposed to stay in your building – don’t go outside. But I had zero confidence in that building, so I got out of there,’’ Dwyer says.
Both Dwyer and Hatcher now live outside the city, Hatcher in the bottom of a two-storey unit in Melling; Dwyer in a one-storey wooden bungalow in inner suburb Mt Cook. Neither would again make their home in a high-rise city building.
With office towers being declared unsafe, city cordons, evacuations and high-rise damage, the November quake has shaken some urbanites’ faith in the safety of Wellington’s central city. And while most displaced workers could work from home, or found alternative offices, the quake raised fears that city dwellers could be shut out of both work and home.
The Courtenay Place cityscape mostly tops out at five or six storeys. But turn toward the waterfront, on to Taranaki St, and lean glassy fingers rise between stubby neighbours, followed by a dress circle of harbour-view apartments.
Up Victoria St, the massive Victoria Street Precinct North tower is slowly shedding its scaffolding – that’s another 65 apartments on the brink of completion. Around the corner, in Dixon St, a gap in the city’s urban teeth is being prepared for the 19-floor, 114-unit DXN apartment block.
Between 2004 and 2014, Te Aro was Wellington’s fastest growing suburb, largely due to new apartment buildings feeding growing demand for a lively, urban lifestyle. That’s unlikely to change, with Wellington facing population growth the size of another six Karori suburbs, and about 40 per cent expected to be housed in the city centre.
While the quake left Hatcher and Dwyer scarpering for the suburbs, any dampening of enthusiasm for city living appears mostly short-lived.
Immediately after damage led to central city evacuations, and photos emerged of trashed upperfloor flats, a couple of prospective owners pulled out of the DXN development, says architect Mike Cole, of Vicinity Architects, which also designed the Frame Apartments, due to open around April.
Insurers also refused to cover new projects for three months. However, the development remains all go, with 102 out of 120 units pre-sold and work beginning. They’ve switched from all-concrete to predominantly steel to improve earthquake performance – but the basic design remains.
‘‘The apartment market seems to be pretty resilient,’’ says Cole.
Comprende director Grant Foggo, who manages rentals in several apartment buildings, also noticed an initial rush of scared renters wanting out.
Foggo says any earthquake blip is long gone and the new apartments coming onstream, such as the Frame and DXN complexes, probably won’t meet demand.
‘‘We’re running at 97 per cent plus [occupancy]. We’ve got clients screaming out for properties.’’
The same goes for apartment sales, says Harcourts sales manager Antonia Brown. While nervousness caused an initial sales freeze, that quickly faded.
Her apartment-owning parents are typical – they got a full engineer’s report to ensure the building was safe, made a small Earthquake Commission claim for plaster damage, then got on with their lives, reassured the building hadn’t collapsed.
However, Brown says buyers now always ask about a building’s earthquake rating, and properties below 33 per cent of code – deemed earthquake prone – are harder to sell and finance. She also discloses whether any existing or previous earthquake claims have been lodged with the building’s body corporate.
‘‘Now, anything we can get, we sell. So I think we’re over it.’’
However, New Zealand Society for Earthquake Engineering president Peter Smith believes that as more people live in high rises, legislators need to consider more stringent building codes for apartment buildings in high quake zones. Designing buildings for life safety, rather than to ensure they’re usable after a quake, makes cities potentially vulnerable, Smith says.
‘‘It’s bad enough when you have an office building having to be emptied, but at least they can get into another open space. To try and rehouse people in apartments is a much more difficult exercise.’’
Staring out his city apartment’s skylight, Neil Cooper watched the 29 storeys of Wellington’s tallest building swing like a pendulum.
‘‘It was horrendous ... The top of the Majestic Centre appeared in one side of the skylight, went across to the other side and disappeared, and then came back again as the two buildings moved.’’
The Dominion Building – whose body corporate Cooper chairs – came through in good structural condition. But even cracked windows are expensive to replace in a multi-storey building – they’ve had quotes of $500 for a 30cm square pane.
A year on, Cooper’s body corporate has yet to see any money from its insurer, QBE.
‘‘Assessors came through about February/March but we still haven’t seen the report. I’m horrified that six months on we still haven’t got something back.’’
QBE announced it had completed the Dominion Building assessment the same day Stuff asked about it. The assessment had required seven site surveys, and the company had to prioritise ‘‘make-safe actions’’, a QBE spokesperson said.
EQC’s excess deduction, calculated at $200 per apartment, is also problematic as earthquakes do not treat every apartment the same, Cooper says.
‘‘We have 31 apartments. If you have a minor claim of $10,000, the damage might only have occurred in two apartments, but the excess is calculated at $200 for every apartment, so you lose $6200. So suddenly half your claim is gone in excess.’’
But that’s only half the financial nightmare. Since the November quake, Cooper’s building’s insurance premium has skyrocketed from $111,000 to $248,000. His body corporate was able to tap into its long-term maintenance fund, rather than asking owners to suddenly find $4400 each. But others might not be so lucky.
Premium increases vary hugely between apartment buildings, with some facing only 10 per cent increases or no increase at all, Cooper says.
Insurance Council chief executive Tim Grafton says the new system, with private insurers acting as agents for EQC, is a vast improvement on the Christchurch model, which saw the ‘‘unacceptable, intolerable’’ situation of 200-300 over-cap claims still being transferred every quarter from EQC to insurers, six years after the event.
While insurers expect to complete three-quarters of body corporate settlements by the end of 2017, apartment buildings are ‘‘far from straight-forward’’ for insurers, Grafton says. Each apartment must be surveyed for damage and co-ordinating access with multiple owners can be a time-consuming nightmare.
The shining example was a body corporate that paid someone to project-manage the assessment process. However, Grafton acknowledges not every body corporate has that kind of ready cash.
The new Government could consider funding EQC to pay for that process, to streamline body corporate claims, he says.
Grafton would not comment on whether Cooper’s doubled insurance premium would be the new normal. However, insurers surprised at decade-old buildings being written off would be looking more closely at details such as