‘Difficult discussion’: IAG study makes relocation policy proposals

An IAG report examining use of planned relocation to protect from natural disasters says the strategy is particularly economically viable in higher risk locations, and makes seven policy recommendations.

Community support is vital for any planned relocation – the practice of moving structures or abandoning land to manage natural hazard risk – and there is no one-size-fits-all approach, the report released today says.

The study, which examined 10 case studies, gives a framework for governments and residents to move homes or whole communities at high risk of suffering devastating floods, bushfires and cyclones, CEO Nick Hawkins says.

After advocating for greater mitigation investment for more than a decade, Mr Hawkins says IAG has recently seen “solid progress” at federal and state government levels. However, the past few years of extreme bushfires and floods show that, in some cases, options such as planned relocation should be considered due to the threat.

“Australian communities must … understand and plan for relocation when the risk to life and safety exceeds a safe threshold,” Mr Hawkins said.

“This is a difficult discussion for communities to have. Supporting them must be at the heart of this process.”

The report makes seven recommendations: develop national guidance on planned relocation; prioritise and fund integration support measures for relocated residents; coordination by state and territory government agencies; proactively identify high-risk locations and develop adaptation plans before a natural hazard occurs; formalise government funding; establish legislative frameworks for accelerated approval; review the outcomes of large-scale implementations to inform frameworks.

After record floods last year, the Queensland and NSW governments are undertaking large-scale retrofitting, raising, and relocation efforts, and those most at-risk may be eligible to relocate their homes. The two schemes provide around $1.5 billion in flood resilience funding with a portion to be allocated to the voluntary purchase of high-risk properties.

Deloitte estimates natural disasters will cost the Australian economy on average $73 billion annually by 2060.

Planned relocation would avoid the cost of annual damage to residential property and roads, bridges and parks, the report says, as well as the costs of clean up, emergency response, and “intangible” community impacts such as flood-induced anxiety.

IAG’s study says there may be opportunity for government-subsidised financing for people being relocated if a community has capacity to service such loans. Vacant dwellings left behind mean schemes should include demolition, and ensure a plan for the use of the vacated land such as community open space.

“A key challenge remains the timeframes over which the scheme occurs. During this interim phase, there may be numerous dislocated spaces that may prove challenging to providing meaningful use,” it said.

The costs of planned relocation were found to be highly variable depending on the size and design of the scheme – buy-back or community relocation – as well as location due to ranging house and land prices across Australia. Larger schemes, particularly community relocation, had economies of scale.

“The economic feasibility is highly dependent on the scale of the scheme and the annualised damage per dwelling in the location being assessed,” the report said.

“In all locations the buy-back scheme represented a relatively more cost-effective option than the community relocation scheme. This is due to the relatively higher cost of land sub-division and house construction than the purchase of the equivalent number of properties.”

The report says both schemes were generally viable and planned relocation is generally viable in situations where the flood risk and potential damage to property is high.

Where planned relocation may not be economically viable at present, it did become economically viable when delayed until 2030 due to the increase in forecast average annual damages as flooding becomes more frequent and severe in future years, the report said of one area studied.

Mr Hawkins says Australia has the ability to prevent future loss of life and property and community suffering from natural disasters with sustainable long-term solutions.

“It is our hope that funding for mitigation will be expanded to include planned relocation for the communities most at risk, and that the recommendations in this report will be realised and undertaken with urgency,” he said.

See the full report here.