Council properties at Pitt Lane and Park Lane are to be rebuilt at a cost of £2.58 million.
The decision was taken at today’s services committee after a discussion as to what to do about the ongoing works in the area.
The flats at Pitt Lane and Park Lane were identified for external re-rendering and works began in June last year.
However, on removing the old render, extreme structural problems were discovered, with crumbling block work to the outer layer of the buildings and defective foundations. This resulted in the work being stopped and a Dangerous Building Notice being issued.
Several of the properties also suffered flood damage as a result of a burst water main in the roof space.
The issue of funding is also presenting problems, as the continuation of Housing Support Grant (HSG) for the next financial year has not been confirmed.
Councillors were given several options to consider, including external refurbishments only, at a cost of £1.4m. While the cheapest, this option would not address the internal condition of the properties, or improve on the layout or size.
Demolishing the existing properties and rebuilding would also allow for an extra eight units to be built.
Shetland south councillor Allison Duncan said it was a “damning report” on Shetland’s building industry of that time.
Councillor Frank Robertson, who said he had discussed the options with builders, explained that the buildings were almost 40 years old, and had been built at a time that it had been extremely difficult to get contractors to Shetland.
It was also a time of substandard blocks being sold, he said, and on a “very difficult site”.
He said that while the properties could be re-clad, they had next to no insulation and were unpopular with tenants due to their size, and that a full renovation would be preferable.
Councillor Betty Fullerton said that any refurbishment costs would be “extensive”.
She said: “We would have to do refurbishments anyway, so to spend an extra £700,000 now will save in the long term.”