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The council says it feels sorry for the Proctor family and is doing everything in its power to help bring about a solution, namely requiring the neighbour, Rodney Peoples, to construct a retaining wall.
It has given him one year to do so, which a council spokesman described as a reasonable time.
However, homeowner Ronnie Proctor says one big rainfall or snowfall could render his Morrison St house uninhabitable and the issue should be fixed immediately.
His neighbour, Mr Peoples, has denied his excavation work is causing the ongoing cracking and subsidence at the Proctor family home.
He said the issues at the Proctor property were caused by poor drainage.
Mr Proctor said he first noticed some cracking and slumping in the house last year, especially around the main bedroom near where Mr Peoples had made a steep cutting in his front section.
A long crack runs down the Proctor home below the master bedroom window, suggesting the house is slumping towards Mr Peoples' excavation.
An investigation by Adams Geotechnical concluded recent damage to the home was "clearly caused" by the excavation next door.
A shipping container has been lowered into place to mitigate the risk of the rapid collapse of a corner of the Proctor home.
The engineer recommended a retaining wall should be constructed as soon as possible to prevent further damage.
Another geotechnical assessment, by Geosolve for Mr Peoples, advised the excavation cutting in his property was too steep for the soil type and also recommended construction of a retaining wall as a priority.
Mr Proctor said the damage had forced him, his wife, two young children and their menagerie of animals to live with his in-laws for six months before engineers gave the all-clear to return.
The house has recently had further damage, including a pile rising up through the floor, causing a noticeable bump in the carpet of his lounge.
He had insurance but the company had not helped out and he believed it wanted to wash its hands of him, he said.
"I think it's pretty poor.
"Our house is in imminent danger, and they won't come in and fix it."
Mr Peoples firmly rejected the accusation his work had caused damage to the Proctor house, instead saying the issues were caused by poor drainage, and also saying his work had helped improve drainage at the property.
"In the winter months the front section is absolutely soaking wet. In the summer months it dries out.
"What happens when it dries out? It shrinks. ... for the last 15 years that's what's been happening."
He said he was willing to start work on the retaining wall immediately but he was on bail and the conditions meant he was not allowed at his home.
"I'd start tomorrow mate, but ... I'm not even bailed to that address.
"How am I supposed to work on it when I can't go there?"
Council community services general manager Simon Pickford expressed sympathy for the Proctor family.
"We feel very sorry for the Proctors, who have been put in a very difficult position through no fault of their own," Mr Pickford said.
The excavation work at Mr Peoples' property was illegal as it did not have a building consent, but the council only became aware of this when the work was done, Mr Pickford said.
The council earlier required Mr Peoples to put in place a temporary solution (the shipping container), issued a "notice to fix" and required the construction of a permanent retaining wall, for which a building consent had been granted.
Both homes had also earlier been slapped with dangerous building notices, which still allowed part of each house to be occupied.
It was Mr Peoples' responsibility to construct the retaining wall, not the council's, Mr Pickford said.
The council had given 12 months for Mr Peoples to complete the work.
"We understand this is a frustrating process for the Proctors, but legally the DCC must allow time for the owner of 20 Morrison St to fix the problem.
"If this doesn't happen, the DCC can consider legal action."