Some of the 8000 Christchurch homeowners forced out of their houses by last year’s earthquake could save themselves $50,000 each on the cost of a section if they pooled their resources, says Geoff Butcher, of Co-Operative Sections.
By Susan Edmunds
By controlling the development themselves, Butcher said, the buyers could save themselves the premium usually charged by developers to cover their risk – often a third of the cost of a section.
“Developers’ biggest risk is not having buyers. But in this case they know who the buyers will be – themselves.”
The economics consultant said the idea of an affordable housing development developed by the people who would live in it had always appealed to him.
“And if there was going to be a time to do it, it’s now.”
He said many people forced out of red-zoned properties did not have payouts big enough to buy another property or could not afford to buy a section.
He had found several suitable sites for development, including a five-hectare section available for $2.5 million that could support 12 sites per hectare.
More than 100 people have contacted Butcher to express their interest.
But he said many were worried about paying for geotech reports and subdivision plans for land that proved unsuitable or consents that were turned down by council.
"It's unlikely but it could happen and people are not prepared to take that risk."
Others did not have the money available because they would not receive their full compensation until they had completely moved out of their properties.
Butcher said he was contacting land owners to arrange a one-year option to purchase so that work could be done before committing to a purchase. Engineers and surveyors were sought to help with the plans on the basis that they would be paid if the work was able to go ahead.
Butcher said he also wanted the subdivisions to be able to take relocated houses.
Most new developments do not allow them.
But he said a lot of red-zoned houses have nothing wrong with them and would be worth moving to a new site.
Butcher estimated he had 25% of the interest needed to get a subdivision into 10-acre lots moving, all the interest required to get a development at Mairehau going – but only half the people willing to commit to paying for the geotech investigations - and 10 per cent of the number of people needed who were willing to pay for reports on land at Halswell.
Source: Landlords.co.nzcomments powered by Disqus