More than 900 homes in Kaiapoi and Pines Beach in Canterbury will have to be abandoned due to earthquake damage.
The Government announced on Thursday that 860 homes in Kaiapoi and 80 in nearby Pines Beach in North Canterbury have now been designated as red zone houses and are uninhabitable.
A further 220 homes in Kaiapoi have been classified as green, meaning their land is safe enough to live on. Seventy other homes have been zoned as orange, meaning the land still needs to be assessed.
Earthquake Recovery Minister Gerry Brownlee says the land in the newly designated red zone is severely damaged and has sunk. Repairing it would not only mean raising the height of the land, but also replacing the infrastructure.
Mr Brownlee says the decision to demolish a quarter of the homes in Kaiapoi was not an easy one, given the size of the town.
Red-zoned residents will receive letters in the next few days detailing the Crown's offer to buy their property at the most recent valuation in 2008.
Waimakiriri mayor David Ayers says the announcement will provide some clarity for residents who have been living in limbo since the first big earthquake on 4 September last year.
Elderly worried about future
Hundreds of Kaiapoi people - many of them retired - are wondering where they can rebuild now they have been officially told their land is too badly damaged to repair.
Pensioner Joy Hurring and her husband, who is in his 80s, have lived in Kaiapoi for 25 years and are among those who have to leave their homes.
Mrs Hurring told Radio New Zealand's Checkpoint programme the couple, along with friends and neighbours, want to stay - but there is not enough spare land to build on.
Mrs Hurring says what there is, is restricted to large houses, which are not affordable for many retired people.
"We want to stay where land is affordable to buy - that is the critical question. The Government will not assist in paying for land; we can't service a mortgage.
"What happens to retired people who don't have the option of increasing or having a mortgage?"
Earthquake Minister Gerry Brownlee says land damage has been minimal in parts of Kaiapoi and homes can be rebuilt.
Mr Brownlee told Checkpoint the Government could assist the Waimakariri District Council on areas where new subdivisions will be created and the challenge will be fast-tracking areas that will have a greater choice of property sizes.
Residents who want to check the state of their homes can go to: www.landcheck.org.nz
