Thursday, 23 July 2015

The Urban Myths of the Rebuild

Shortly after the February earthquake in 2011, the urban myths starting flowing around various components relating to the rebuild. There was the spectre of capital flight and some saying that the insurance monies would be drained out of Christchurch and people would not invest here. Clearly, that has proven to be false. Another myth revolved around population flight, an expected population collapse and then of course there was the reported economic collapse in the city. However, the population has increased and our economy is in extremely good shape with an enormous amount of money being spent on the rebuild and the underlying economy still very sound. There was an urban myth around timeframes and that we would move through the rebuild phase very quickly and be back to “normal” in almost no time at all. Of course that did not happen.

Those urban myths have been dispelled one by one. Obviously they are interdependent but they were all false. We now go into the regeneration phase of our rebuild and we are coping with more urban myths. The first is that the rebuild has peaked. The impression of peaking means that you are at the top and about to go down the other side. It must be made clear that it is an urban myth! The rebuild has plateaued and we will continue to spend around $100 million a week for years to come in the rebuild of our city. The reason it has plateaued is because we have reached capacity constraints (as some of us were predicting a long time ago).

Another urban myth is that we have been badly let down by the insurance industry. Certainly in some cases insurance claims have been badly handled and some people have been seriously compromised in their negotiations with insurance companies. But overall this community was outstandingly well insured in the context of the earthquakes. It is estimated that $32 billion of insurance money, both EQC and other private insurance, will flow through the hands of the insured and most of it will end up underpinning the rebuild of our city.

A further current urban myth still exists around timeframes. We will look back on the rebuild of Christchurch and recognise that we were hopelessly optimistic when it came to the timeframes around the proposed rebuild of the city. The reported end of the rebuild is 2026 and even that is probably optimistic.

Another current urban myth is that the city is being rebuilt by Local and Central Government, obviously they are playing an important part in underpinning the rebuild with various key projects and the provision of infrastructure, however it is the private sector that is rebuilding the city and it is important that is appreciated. Of course the insurance pay-outs play a major part in the re-investment. 

The final current urban myth worth dispelling is that the Central City is going to suffer from a major “donut effect” and that people will not be drawn back into the Central City and property investment will not be made in the heart of our city. That is absolutely untrue. Most of the Central City is committed to being redeveloped, mainly by the private sector, and we are looking forward to physical evidence of that to dispel that particular urban myth.

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