Mick Wallace (Wexford, Independent) | Oireachtas source

On Deputy O'Dowd's last point, in The Guardianfor the last three or four weeks there have been articles on the major problem they are having with housing provision in the UK at the moment. It is a crisis that is coming close to our own. I get the impression that funding and how all this will be financed presents a huge stumbling block for the challenges that are out there at the moment. It is about the price of the money. Can we get money at around 1% rather than being driven into the hands of PPPs which are an outrageous price for the State?

The Minister said that sometimes we cannot do this because it will drive it off-balance sheet and it becomes problematic in terms of how the money is assessed, and so on. That is a huge obstacle we must overcome. As I have said before, it is clear that other states in Europe have bucked the rules when it suits them. For example, this year the French are going to break the fiscal rules to deal with what is called an emergency around security due to the ISIS attack. We have an emergency around housing and we should be looking for some leeway from the Europeans as well, just as the French have done. Austria, Lithuania, Spain and Italy have already indicated that they are also going to break the fiscal rules in 2016 and probably will not pay any great price for it.

Another issue around funding is that there is a lot of development that could take place in the country but the builder or developer - sometimes it is the same person - struggles to get access to funding. The banks are not lending in this area and are unlikely to start lending. The Government is unlikely to start telling private institutions what to do, even if we do happen to own AIB. Does the Minister not think the State is going to have to play a serious role in funding projects? He mentioned that deals can be done with local authorities around social and affordable housing and mixing it with private housing. I agree that would be great if he could make it happen, but there are some serious obstacles to making that happen.

I was speaking recently to a guy who wanted to build 30 units. He was prepared to do a 50:50 split between private and social housing and wanted to do a deal with the local authority in terms of accessing some upfront funding to go towards his eventual take from the project. However, the local authority did not feel that the project was doable in that manner. There are some challenges that need to be addressed in that area with the local authorities.

To return to my first point, NAMA representatives appeared before this committee and it was very interesting to listen to them. They made it very plain that they have a commercial mandate - 100% - and that the notion that they had a social mandate was a figment of our imaginations, despite the fact that it is mentioned in the legislation. They were unapologetic about the fact that they will do as they see fit to maximise the return on any commercial venture in which they engage. The Minister said that NAMA will probably deliver more than the 10% target for social housing. He also said that integration is key and agreed that affordability is a big challenge. However, the NAMA representatives admitted that the majority of the units the agency will build will not be affordable for those people who are struggling to find units now and into the future. The Minister said that the Department's action plan will focus, in particular, on those experiencing the most difficulty in accessing the housing and rental market at the moment but the majority of the 20,000 units that NAMA will build will not address the needs of that cohort. That is a fact.

The NAMA representatives were also unapologetic about the fact that they are engaging with vulture funds to develop huge tracts of commercial property, a process which will prove to be very lucrative. That is a commercial decision and I understand the logic behind it but the sad part is that it is happening at the expense of the residential market. It would be so much better if the State took a more hands-on approach to how NAMA operates. The Minister said that it drives it off-balance sheet if the Government reduces NAMA's commercial mandate. It would be disingenuous of me not to add that I have serious concerns about the fact that we are hanging so much of our hopes on an agency like NAMA to deliver 20,000 when only this week two of its former employees were arrested in Northern Ireland. That is going to have serious repercussions and will not go away. I am not so sure that NAMA is the organisation upon which we should depend to deliver so many units. The Government needs to examine this issue and determine whether it is right to go down that route. NAMA seems to be here for the long haul but there are many issues surrounding it that have not been addressed in recent years. The Minister said that we cannot be too demanding of NAMA but it would be wonderful if we could demand accountability and transparency in terms of how it has operated.

On the issue of carrots for the private sector, I do not live in cloud cuckoo land and realise that 70% of people will continue to use private housing in some form or other in the next ten to 20 years. However, I would argue that we have serious problems around how we deliver private housing as well. The affordability issue is directly linked to the fact that the market is dysfunctional and unregulated. The Minister said that he is considering introducing tax incentives to get private developers back into the market. Is he aware that investment or vulture funds are sitting on some really good sites in Ireland and are looking for incentives to start building?

I warn the Government that it will have to be careful as some of these people have no appetite for building but are actually planning on flipping property when it is more attractive to flip it. They are lobbying for incentives with a view to making their asset more valuable. I suggest that if any type of assistance is to be provided to attract the private developer back into the market it has to be formulated in such a way that a reward comes at the end when the units are delivered. I do not how that can be done but if it is done upfront, these guys will make a killing and go laughing their heads off. I am not suggesting for a moment that the issue is not complex and that it is easy to do these things - I know it is not - but there is a danger of driving up the value of the development land that is ready for building.

On the Part V issue of the 10%-----