Franz Josef has an alpine fault running through the town, and on top of that, has grading issues with the river which will see it potentially rise two metres every 10 years.
- West Coast Wildlife Centre in Franz Josef welcomes five rare tuatara
- Body found on Fox Glacier by tramper
A GNS science report states there is also a moderate to high probability of a large earthquake striking in the next 50 to 100 years on the alpine fault.
The town, which sees one million tourists pass through annually, has three options to try and avoid future flooding and earthquake damage, and one option is to move the township.
West Coast Regional Council chief executive Mike Meehan says the town could physically avoid the natural hazard challenges in Franz Josef by moving to Lake Mapourika, out of the flood area from the Waiho River, away from the alpine fault and the landslide risk.
Not only does it put them out of harm's way, but Mr Meehan told NZ Newswire this option would create new investment opportunities, while protecting the tourism value generated by the township.
"It would be an opportunity to get everything right and make decisions pre-event," Mr Meehan said.
"When you look at natural disasters around the world, decisions get made following the event, if there was time to plan they could've made a different decision... you could design the town to be really resilient."
The final decision on the town's future will be up to the community, which includes 300 residents, and there are still two more options on the table.
The options include living with nature's challenges, by decreasing stopbank management and allowing the river to fan out in its natural pattern, which will reduce flooding risk and flood management costs.
This option also allows for relocating township assets off the active fault line in the short to medium term.
The final option is to defend against nature's challenges, which would see stopbanks built and implementing a gravel extraction program to allow the township to stay in their current location with lower flooding and earthquake-related risk.
The three options have been narrowed down from an original list of 70 options.
"We needed to put something concrete in front of the community to have a discussion and give us direction on which way they want us to go with the future of the town," Mr Meehan said.
A report into the three options will be released in a few weeks' time, and discussions with the community are expected to begin shortly.