Former residents of a botched development in Tauranga have described a compensation offer as "heartbreaking".
Tauranga City Council signed off on the Bella Vista development despite major construction defects. Residents were forced to abandon their homes in March.
Young families, retirees and solo parents sank their savings into their new Bella Vista homes, but their dreams were dashed when it was discovered the homes were leaky and built on unstable foundations.
Two months ago the residents pleaded with the council to buy back the properties at full market value - before any defects were found - and provide extra compensation.
Yesterday, the council said it would buy back the houses at the prices residents paid for them about three years ago, plus $10,000 dollars each in costs.
Andre Stewart, who bought his first home at Bella Vista with his wife Chloe and their two young children, is devastated by the offer.
"Heartbroken, was my immediate reaction. That after two years, I'm in a worse position than I was."
The family's options were limited to looking for something well below what they intended to buy.
Former resident Degen Prodger said the loss of value in the past two years locked them out of buying another home in Tauranga.
"It is only fair to get full market value to set up in a similar house."
The residents' request was not unreasonable for a group of people left with nothing, through no fault of their own, Mr Prodger said.
"We are ratepayers ourselves and the ratepayers they are talking about are supporting us."
Yesterday, the council said it had to balance the needs of residents with those of ratepayers.
Resident Lee Konowe said in 13 years living in New Zealand, he's never witnessed such shoddy work from local government.
"If part of our process reduces that probability in the future, then maybe we have done a good thing."
There was no reason why the council could not increase its offer when it was getting the majority of compensation from insurers, Mr Konowe said.
Some residents have already filed documents in the High Court against the council, seeking damages of $50,000 per property plus costs and damages.
Tauranga City Council declined to be interviewed today. It is considering court action against the developers.