Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

There is merit in the Deputy's argument that local authorities and housing associations did not build enough social housing. In 2004 or 2005 the Minister for the Environment decided that, in allocating housing budgets, local authorities would be allowed to go into the market and buy private houses rather than construct social housing, and this certainly reduced the supply. The argument at the time, which I understood, was that by building large social housing estates one risked developing ghettos whereas, if the budget was used to buy in private housing estates, there would be a much better social mix and thus a much more sustainable housing model. However, local authorities not only stopped building houses, they took out their capacity to build houses by winding down their construction sections. While the housing agencies can now build houses many local authorities do not have sections dedicated to the construction of social housing, as they had when I was a member of a local authority, with design people and engineers who could deliver it. That is one argument but not the only one and there was a very strong social reason for going the other way. There are now very big housing budgets and we prioritised this at the start of this Government. The Minister for Housing, Planning, Community and Local Government and local authorities have €5.5 billion over the next six years for social housing and, by any standards, that is a very strong investment.

NAMA has a social obligation and is committed to building and providing 20,000 units, houses and apartments. It has already delivered between 4,000 and 5,000 and is continuing its work. NAMA was financed with primary bonds and secondary bonds. The primary bonds, worth €30 billion, are due to be fully paid in 2017 and the secondary bonds run out to 2020. The advice given to NAMA, which it has passed on to me, is that it would not be good financing to repay them any sooner and the cheapest way to pay them off would be to let them go until 2020 and settle them then. It has the wherewithal to settle the subordinate bonds and it estimates a profit of €2.5 billion at present, while its residual assets are somewhere north of €4 billion. Over the next year and a half to two years I would expect the €2.5 billion, in a thriving property market, to go up further and this will be money largely for the Exchequer. There may be a small amount, perhaps €10 million, to settle the structures put in place at the beginning of the process.