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That followed a decision on Tuesday to back a similar scheme to fund insulation and clean heating for residential buildings.
The voluntary targeted rates schemes work by providing finance to ratepayers - in this case to complete earthquake-strengthening - with the cost to be paid off through rates over a specified period.
Council heritage policy planner Glen Hazelton told the annual plan meeting yesterday the council was starting to notify building owners they needed to begin strengthening work soon.
The new scheme meant at the same time it would be providing mechanisms for owners to do that work, along with the Dunedin Heritage Fund and rates relief for heritage buildings.
That situation was better than one where owners demolished their buildings because they had no financial means of doing the work.
Mr Hazelton's report to the meeting said following the Canterbury earthquakes, constraints on investment in heritage buildings, such as lack of demand and low returns, were exacerbated by difficulties in obtaining finance and insurance.
Strategy and development general manager Sue Bidrose assured the meeting the scheme would not cost other ratepayers, as any debt raised to pay for it would be paid off by the building owners, or future owners.
Responding to concerns from Cr Fliss Butcher any more debt raised by the council could downgrade its Standard and Poor's rating, Mr Hazelton said the loans would only be for the owners of heritage-listed buildings, not institutions like the University of Otago, and he expected only about 10 loans a year would be taken up.
There would be about $500,000 available in the first year.
Cr Syd Brown moved "option 2" be adopted.
That option meant applications were considered by the four city councillors on the Dunedin Heritage Fund, and three New Zealand Historic Places Trust representatives, with a final decision by the council finance, strategy and development committee.
He said that option gave the council control of the scheme.
Cr Jinty MacTavish said she supported the scheme, as it allowed owners who shared the council's vision of the city to put their views into action.
Like the insulation scheme, it had an "enabling and facilitating" role, rather than the council borrowing money to pay for upgrades.
Cr Chris Staynes said without the scheme, building owners would have no incentive to do the work.
Cr Brown's motion was carried unanimously, meaning the scheme will be added to the initiatives included in the annual plan for consultation.