Cyclone Gabrielle: Ombudsman finds homes were fairly valued during buyouts
The Esk Valley, north of Napier, was severely flooded in Cyclone Gabrielle and many homes in the valley received buyout offers. Photo / Warren Buckland
The Ombudsman has concluded there is “no evidence” homes were undervalued during Cyclone Gabrielle buyouts in Hawke’s Bay.
Chief Ombudsman John Allen today released the findings, known as a case note, which related to four complaints from property owners who took part in the buyout scheme in the Hastings District.
The owners questioned the independence of Hastings District Council’s land valuations.
They also questioned whether the offers sufficiently accounted for the trauma they experienced and the financial losses they suffered, including covering rents and mortgage costs during the buyout process.
However, the Ombudsman has found the council’s approach to preparing buyout offers was “not unreasonable”.
Cyclone Gabrielle caused widespread flooding and damage across Hawke’s Bay in February 2023 and led to hard-hit home owners being offered buyouts on land zoned Category 3 (effectively a red zone).
Some Category 3 properties that did not have a home, but had consents or plans to build a home, were also offered a buyout offer.
Of the 327 properties in Category 3 areas across Hastings and Napier, 167 were eligible for a buyout. The bulk of those were in the Hastings District.
A “buyout office” was set up in Hastings in late 2023 and led by Hastings District Council in conjunction with Napier City Council.
Property owners were not forced to take a buyout offer, and not every eligible property owner accepted a buyout. Some residents remain living in Category 3 areas.
The four owners’ properties, at the centre of the Ombudsman’s investigation, were all purchased under the buyout scheme.
“The Chief Ombudsman’s investigations focused on the adequacy of the process that [Hastings] council followed in valuing the properties in question and making buyout offers,” the Ombudsman’s case note read.
The Ombudsman noted the council gave financial help to owners to commission their own valuations, and these were considered alongside those of the council valuer.
The valuations were then assessed by a valuation manager to help form a final valuation.
“There was no evidence to suggest that the council’s valuers were directed to undervalue properties, that the buyout offers always aligned with the council’s valuation, nor that the valuation manager accepted any under-valuations,” the Ombudsman’s findings read.
“The Chief Ombudsman was aware of instances where the council valuer’s valuation was higher than the owner’s, and where the buyout offer was greater than the council valuer’s valuation.”
Allen said the council took steps to make valuations as independent as possible.
He said the council also provided funding to owners to obtain legal advice after receiving their offers.
“Owners were also given three months, which was sufficient time to consider their offers, and this timeframe could also be extended in some cases,” he said.
“All of these measures, in my view, contributed to creating a reasonable process.”
Allen said the scope of the council’s scheme was in line with the Government’s vision for the programme, and it did not seek to offer full compensation for financial losses.
“I acknowledge property owners suffered considerably but the council’s buyout policy wasn’t designed to address the profound effects on people after the cyclone or all of the damage caused,” he said.
“Compensation over and above the market value of the property would have faced criticism from ratepayers and may not have been financially prudent.”
The costs for the buyouts were split 50:50 between the Government and Hastings District Council/Napier City Council.
The buyouts cost Hastings District Council alone almost $43 million.
Hastings District Council has been contacted for comment.