28 Jul 2016

More in arrears as Christchurch rates climb

7:08 am on 28 July 2016

Christchurch homeowners and businesses are feeling the strain of repeated rates increases.

Christchurch City Council

Christchurch City Council Photo: 123rf.com

Figures released to RNZ show the number of property owners falling behind on their rates has increased, and the amount owed to the council has grown to $11.5 million - up 12 percent on the previous year.

Rates in the city have continued to climb as the council struggles to meet a $1.2 billion budget shortfall brought on by the cost of the rebuild.

In the past two years there have been increases totalling 15.5 percent taking the average bill to about $42 a week. Rates went up again this year by 5 percent.

Age Concern Canterbury chief executive Simon Templeton said the burden was becoming too much for some to bear and essentials, such as home heating, were being sacrificed to ensure the rates bill was paid.

"We're certainly seeing an increase in people in cold houses because of real fear and concern that they won't be able to afford the power bill.

"I had someone in the office yesterday with $650 worth of electricity in arrears and he's sitting in a freezing cold house."

Christchurch construction.

Christchurch rates have risen as the council struggles to meet a $1.2bn budget shortfall brought on by the cost of the rebuild. Photo: RNZ / Alexander Robertson

The rates rebate scheme, where those on low incomes can receive a subsidy of up to $600, was still not being accessed by those who needed it, he said.

He put that down to two factors.

"One is lack of knowledge that this help is available and two, potentially people feeling too proud to come forward and say look we're struggling."

The man in charge of collecting rates for the Christchurch City Council, Paul Curgenven, said there were 16,708 defaulters in the past year.

They were normally given a year to wipe their debt, before the council approached their bank.

"And they'll recover the money off the ratepayer. They're [the banks] supposed to, as per the provisions of the Act, add the amount they've had to pay the council on to the mortgage, but I know that some banks don't do that, they use the provisions of the mortgage document which says that if the people haven't paid their rates, they're actually in default of the mortgage document."

Mr Curgenven said that step was taken by the council in about 1000 cases in the past 12 months.

For those without a mortgage, which includes many elderly ratepayers, a debt collector was called in.

Rates rises are unpopular with voters and not many of the council's elected representatives were keen to talk about the topic.

Mayor Lianne Dalziel wasn't available to be interviewed, and of the 13 city councillors RNZ contacted, only two returned calls.

Christchurch City Councillor Raf Manji

Raf Manji Photo: supplied

One of them, Raf Manji, said the council hoped to introduce a policy next term that would allow those on fixed incomes to use the equity in their homes to pay their rates.

"I've had a lot of enquiries myself from especially elderly constituents who are sitting in properties which have increased in value, and therefore their rates have gone up and yet their incomes haven't gone up and so I think there's a lot of stress in that area."

Whether voters think the rates increases are justified will be seen in just over two months, when they go to the polls to elect a new council.