The Government red zone payouts have started to arrive and a new deal for Kaiapoi residents was announced last week. What is the red zone deal? For people living in Christchurch and surrounds with severely damaged homes and land, the Government is going to buy the entire property including land for the value of the 2007 Government valuation. It sounds like a great deal to me but people are complaining about it. We sold our house in Christchurch just over a week ago for a price significantly below our Government valuation. About $100,000 less to be precise. We have since moved to Auckland where property prices are almost prohibitive. (I don’t choose to live here but this is where my husband got a job) If we had been given the red-zone deal we’d be laughing. So what are they complaining about?
The red zone deal
rachel.blog 
Well in one situation I can think of a late 50s y.o. woman has been redzoned – what will be paid out will clear her mortgage but not pay out enough for her to buy another home. She will have to rent, so has no "investment" for her retirement. In addition she's currently housed in emergency housing that is only available to those whose homes will be rebuilt. Now that hers has been confirmed as not being rebuilt she'll have to move out – most likely have to leave the area she has always lived in as there are few rentals there. Also, she's currently on a sickness benefit but will have too much money after the payout to allow her to stay on it, so essentially she has to spend the remainder of her payout (her retirement money) to live until it runs out and she can get help again. Or another person who had recently finished completely renovating an old villa, adding immense value to it. It was due for revaluation THREE DAYS before the quake. The home is now redzoned and they will only be paid out the prevaluation value, no way to recoup their investment and, again, not enough left after mortgage to buy again. Or the person whose redzoned LAND holds a perfectly fine house, so their insurance company will not pay the cost of a rebuild because the house under insurance is fine. There are plenty of people who will be ok / maybe even better off but there are MANY, particularly older residents who are utterly screwed and will not recover financially before they retire.
Why can't the 50-something year-old take out another mortgage or transfer her mortgage to a new home? She can't expect to be mortgage-free after the quakes when she wasn't before them. There are lots of cheap houses for sale in the Eastern suburbs of Christchurch if you search trademe. Or if she's not working, she can move further afield. I don't think people can expect not to be worse off after an event like this. The Government payout also means red zone people don't have to pay the real estate fees which are exorbitant.
She's on a sickness benefit, therefore unable to work and unable to raise a new mortgage. She's also in Kaiapoi, so faced with moving out of the community where her support is right when she needs the most support – much like you have, so you'd understand, except she doesn't have a choice. I don't think anyone's expecting to be better off than they were before hand, but in the same position would be nice.