exposure to fate. Japanese householders typically insure only for enough to get a fresh start, on average less than 20% of replacement value. They don’t expect to be put back into their previous financial position. Californians want a bit more, but only 30% are covered for earthquake losses. One upside is that instead of years waiting for insurers to give the go-ahead for rebuilding, in those countries they just get on with it.
OUR COUNCIL COULD LEAD We do not have to wait passively for central government. Wellington City Council can address irrational fear. Having helped create it, albeit for the best of reasons, WCC could now lead by: a
RECENT DEVELOPMENTS Ian Harrison’s whistle blowing on these issues was justified in May by the Hon Nick Smith’s announcements that only 30,000 buildings out of 500,000 previously targeted now need early assessment and attention. The Minister’s statement says the changes could save or avoid nearly half of the [wasteful] earthquake strengthening required before the announcement. The changes benefit most of New Zealand but not Wellington. Ian Harrison says officials have misled the Minister of Building and Housing. So opposition MPs should have ensured they were closely questioned in Select Committee. The Opposition instead dropped the ball. A US congressional committee would have hired someone like Mr Harrison and watched and learned from his questioning of officials. But our Select Committee rarely draw in experts to challenge the insiders’ consensus. MPs, officials and councillors may be excused for a primitive grasp of relative risk, and a much greater fear of looking as if they don’t care enough about safety. But there should be little political risk in requiring engineers who could profit from irrational risk aversion to obtain and publish expert analysis that would show whether more engineering is wasteful. Listening to the discussion at the Inner City Association meeting I was reminded of the tens of millions spent across New Zealand, 15 years ago, at the direction of government, to avoid the imaginary Y2K bug. Officials and politicians were too scared of the downside to call out the IT alarmists, even though many within the IT industry were saying the risk was low. Ian Harrison does not say there is no earthquake risk. There is much to be done to increase the resilience of our city. But the spending should be based on disciplined risk analysis.
b
c d
e
f
Providing a measure of our life safety risk in using buildings. That is not whether or not the building is less than 34% as strong as the new building code would make it. Stipulating life safety risk measurements to accompany engineers’ reports. They could use a universal mechanism such as the micro-mort. It would allow comparison with common risks, such as smoking, eating too much salt or sugar, aircraft travel, cycling or failing to exercise; Work with Wellington property owners to reevaluate insurance usefulness. Supporting reform of apartment body corporate obligations to insure. Mandatory replacement insurance might give a financial payout. But Wellington may not be rebuilt. Insurance premiums instead spent on new buildings or strengthening could reduce property and life losses. Refusing to designate buildings using the current methodology. Mr Harrison makes a case for challenging the methodology in court if the law is not changed. Developing a decision template to help Wellington property owners apply rational informed preferences on the levels of risk they want to live with.
Spending on strengthening doesn’t always deliver a return. It doesn’t increase capacity and it does not make buildings more suitable for a digital world. Without more rationality Wellington may get the worst of all possible outcomes. Buildings which are not economic to strengthen may become orphans, still used but not maintained, effectively abandoned by their owners. They’ll blight their neighbourhoods. If the city overall puts resources into wasteful strengthening instead of new capacity, we are all poorer. Sites that would be development opportunities in a vibrant city don’t get the capital that is squandered on spending to stand still.
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