The New Zealand Government announced today a “voluntary buyout” scheme for Category 3-designated residential properties in cyclone and flood-affected regions, including ones that were affected by Cyclone Gabrielle and the record North Island floods this recent summer.

Category 3 refers to properties that are located in areas where future severe weather event risk cannot be sufficiently mitigated.

The Government will share the cost of the buyout scheme with councils and initial assessments indicate about 700 Category 3 properties will qualify for the program.

“When it comes to Category 3 what has been announced today is that we have a series of… assessments and you would have seen that in Hawke’s Bay for example, councils have released maps around the Category 3 areas,” Finance and Cyclone Recovery Minister Grant Robertson said at a press conference today.

“Those assessments will now be worked through by councils with those who are affected… what we can confirm today is that the Government will be supporting local councils to provide a voluntary buyout scheme for people who are in Category 3.

“The cost will be split between central and local governments.”

He says the process to understand how that split will work is underway and will be completed by the end of June.

“Obviously there are a number of issues to work through… and we are working with councils on issues such as valuation criteria, how we deal with insured and uninsured, who ends up with the final ownership of land,” Mr Robertson said.

The Government also announced today it will co-fund work needed to protect Category 2-designated properties. Category 2 refers to homes in locations where community and/or property level interventions are feasible to manage future severe weather event risk.

The initial support for Category 2-designated homes is already in place with the $NZ100 million($92 million) funding that was announced in the recent Budget.

Councils in Hawke’s Bay have already set out which properties are in Category 1 and indicative assessments of which are in Categories 2 and 3. For Category 1 properties repair to previous state is all that is required to manage future severe weather event risk.

The Insurance Council of New Zealand (ICNZ) has welcomed today’s announcement from the Government.

“We know from previous disasters that for those worst affected this is often a very stressful and uncertain time,” CEO Tim Grafton said.

“For many, today’s announcements are just the start and we are all waiting for more detail, both on specific measures required by councils as well as any additional council help that may become available to either make repairs or to move on.

“Insurers will support their customers through this and meet their claims in line with their policies.”

ICNZ says Gabrielle and the North Island floods have already resulted in more than 100,000 claims with an estimated value to date of more than $NZ2.8 billion ($2.6 billion).

West Auckland Is Flooding, a community group of owners who banded together after the floods in January, says it is “beyond relieved that the Government has finally committed to doing what is right and what is needed”.

“Together our advocacy has made a difference, and it feels like we can all start to see the light at the end of the tunnel,” it says, adding the Government is doing the right thing by “moving people out of harms way and providing significant funding to make our city more flood resilient.”