USING NAMA TO BUILD HOUSES? GOOD IDEA, LE0!
Three years after the Mail first suggested it, the Taoiseach signals we may start using Nama’s vast landbanks to tackle the lack of supply...
NAMA may finally be given a key role in helping to solve the national housing crisis, the Taoiseach declared yesterday.
Leo Varadkar said the superagency would be ‘repurposed’ to help solve the accommodation crisis across the country – as the Irish Daily Mail has consistently argued for the past three years.
Mr Varadkar gave no details of how the repurposing would work, but it is expected that Nama could hand over build-ready land and residential properties to the State to use for ‘social and affordable housing’.
Nama has so far focused on
selling off bundles of bad property assets that the banks were saddled with as a result of the economic crash. It is effectively one of the world’s largest property firms. Most of the assets have been sold to vulture funds, big developers and syndicates – with the agency due to be wound up in 2020.
Up to now it has had no role in becoming a developer itself, apart from extending loans to allow builders to finish estates or projects to make their subsequent sale easier. If Nama were to now begin handing over land and properties to ease the housing crisis, the financial consideration could be minimal – which in turn would impact on the agency’s ability to return a profit to the Exchequer.
In a speech to the Fine Gael think-in in Clonmel, Co. Tipperary yesterday, ahead of the Dáil’s resumption next week, Mr Varadkar said: ‘We are examining the possibility of repurposing Nama to develop plans on behalf of the State and step in where the private sector has failed.’
However, his speech touched only briefly on the twin issues of housing and homelessness. He said: ‘The Government understands the stress faced by people without a home as well as those struggling to buy one.’
He added: ‘In 2012 some people said we would never get on top of the jobs crisis, as unemployment hit 15%, but we did. We will bring the same determination and focus to solving the housing crisis. Housing Minister Eoghan Murphy is continuing to work on solutions to the crisis and will announce these when he arrives at them.’
Nama issued no official comment on Mr Varadkar’s announcement yesterday, although there were indications that the agency had an inkling of what was coming. A source said: ‘There is constant contact and discussion between Nama and the Department of the Taoiseach, and they are always sharing plans in the residential space.’
Officials would not discuss any particular fresh initiatives Nama might now take. However, two years ago then-finance minister Michael Noonan asked the agency to get involved in the residential market for the first time.
In his Budget 2016 speech, Mr Noonan said he had given Nama the target of ‘facilitating’ up to 20,000 residential units by the end of 2020. The agency had an original target to generate 4,500 finished units by this point, and 5,300 have been delivered to date.
Another 9,200 units are either under construction or have obtained planning permission, the Mail has learned. Further sites with a delivery capacity of another 9,500 units are either in the planning system or will be entering it within a year.
Pre-planning and feasibility work is also under way on sites which have a delivery capacity for another 17,000 units, meaning 41,000 units of accommodation might ultimately be delivered.
Most of the housing delivered so far by Nama has been on a greenfield basis, with little from the completion and sale of ghost estates. The majority has come on stream in Dublin, with the rest mainly in cities such as Waterford, Galway, Cork and Limerick.
Nama has a mandate to deliver a surplus of €3billion to the Exchequer by the end of its lifetime. There are no indications yet regarding how Mr Varadkar’s announcement could affect this figure – but sources indicated the monetary target is based on Nama’s existing brief, without fresh responsibilities.
Education Minister Richard Bruton yesterday admitted the Taoiseach’s initiative had not yet been ‘fleshed out’, but said discussions would now begin on how best that could be done.
‘We have an agency with significant experience in this and the Government will look at the capacity of this agency to see what it can do,’ Mr Bruton said.
‘We have already indicated that Nama will have a responsibility for some housing delivery, and it is about seeing to the next steps.
‘We have seen the difficulty in the private sector to get funding, planning and servicing of sites in a timely manner. So we are naturally looking at the capacity of Nama to bring their expertise to bear.
‘There is no detailed plan at present but the primary objective of Nama was to ensure taxpayers got their money back. This new examination is looking at its potential over the long term.
‘The Taoiseach, Minister for Finance and Minister for Housing will all be involved.’
A Fine Gael spokesman said Nama’s expertise could prove useful. ‘It is possible that this valuable expertise and experience could be utilised to address aspects of the housing problem.’
Conor Skehan, chairman of the Housing Agency – a government body – said the plan to use Nama had ‘some merit’, but that he would have liked if his agency had been asked its opinion rather than being left to hear it elsewhere.
He also said it will ultimately be the private sector rather than the public sector that will solve the housing crisis. The private sector had delivered up to 95,000 houses at the height of the boom and is finally showing signs that it is ramping up delivery, he said.
‘The real advice, if we were asked, is for everybody to just settle back and allow the processes that are well under way to continue without confusing the market by introducing new structures,’ Mr Skehan added. He also said leaders should not take ‘precipitous actions, in response to pressure from lobbying groups seeking to pursue agendas.
‘This always happens... people panic and think that the solution isn’t going to come quickly enough,’ he said. ‘The real trick and the leadership that is required at this stage is not to take precipitous actions.’
Comment – Page 14 senan.molony@dailymail.ie
‘Understand stress of having no home’ Initiative needs to be ‘fleshed out’