Barry Cowen (Laois-Offaly, Fianna Fail)
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4. To ask the Minister for Environment, Community and Local Government if he will describe the discussions and negotiations he has had with the National Asset Management Agency, NAMA, in respect of increasing its provision of social housing units; if he is satisfied the agency is doing all within its authority and legal mandate to increase the supply of social housing; and if he will make a statement on the matter. [44313/15]

Barry Cowen (Laois-Offaly, Fianna Fail)
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What discussions were held with NAMA to increase the supply of social housing units? What percentage of the 20,000 units committed to in the budget will the agency deliver? Can the Minister of State clarify whether this number is separate from last week's announcement of 20,000 units for Dublin? With regard to the interest rate clients of NAMA are charged, competitors are reputedly being charged between 14% and 16% by hedge funds, one of which is sponsored by the Government?

Paudie Coffey (Waterford, Fine Gael)
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I thank the Deputy for his question. NAMA continues to play an important role in the delivery of social housing. To the end of September 2015, a total of 1,600 NAMA residential properties had been delivered for social housing use, comprising 1,241 completed properties and a further 359 that have been contracted and where completion work is ongoing. A further 486 properties are considered as being active transactions whereby terms are agreed or active negotiation is ongoing by all parties concerned or where a detailed appraisal is being carried out. An additional 440 properties are to be further appraised. Overall, I expect that in excess of 2,000 units will be secured for social housing purposes from this engagement with NAMA. In addition, NAMA is funding the construction of new residential properties to help meet demand in the major urban centres. The overall programme will be funded from NAMA’s own resources and will lead to the development of an estimated 20,000 units by 2020, mainly in the greater Dublin area where the current residential supply shortage is most acute.

Residential developments funded by NAMA are subject to the same planning and regulatory requirements as all other developments and this includes policy relating to Part V of the Planning and Development Act 2000. As such, I expect 10% of the output of this investment by NAMA, or approximately 2,000 units, to become available for social housing.

NAMA’s special purpose vehicle, the National Asset Residential Property Services, NARPS, Limited was established in 2013 to facilitate the sale or lease of NAMA debtor or receiver residential properties for social housing purposes. In line with a commitment in the social housing strategy, its remit has been expanded to allow it to fund the purchase of Part V units which become available through its residential delivery programme. In this way, the agency will continue to facilitate the provision of high quality units for social housing purposes in mixed tenure, sustainable communities and, thus, complement the extensive social housing construction programmes in which all local authorities are currently engaged.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I thank the Minister of State for his response but I refer him again to the questions I asked. What discussions were held with NAMA recently regarding the budget announcement to increase social housing supply and when were they held? Notwithstanding the grave mistake to reduce the Part V contribution from 20% to 10% of private developments, the Minister of State said that of the 20,000 units that are to be built, only 10% will accrue to the State and NAMA will purchase them. He said this would be around the country but last week's announcement was Dublin specific. Six to eight months ago, 20% or 4,000 of these units would been provided but now only 2,000 will be provided. The budget announcement of 20,000 new units will supposedly address the deficiency in supply in urban centres throughout the country but last week's announcement related to 20,000 units being provided in the docklands and other parts of Dublin only.

NAMA is reputedly charging its clients 4% for funding while hedge funds from the US and elsewhere are charging between 14% and 16%. Will the Minister of State comment on the fact that a hedge fund sponsored by the State is also charging between 14% and 16% in conjunction with a US hedge fund meaning competitors are not being treated fairly?

Paudie Coffey (Waterford, Fine Gael)
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NAMA was established with a commercial mandate but it has also been expected to deliver a social dividend through its housing output. Of the 6,574 units identified by its officials, demand has been confirmed for 2,526, which is a substantial social housing offering. Negotiations and approvals relating to these units involve approved housing bodies, local authorities, the property owners, financial institutions, receivers and other relevant parties.

As announced on budget day, the Minister for Finance asked NAMA to carry out an analysis of development sites controlled by its debtors and receivers with a view to identifying the scope for substantially increased residential delivery in the period up to 2020. The agency is not becoming a developer nor will it build houses. It will ensure the delivery of these units through continued work with its debtors to agree development plans, secure planning permissions and fund the delivery of these residential units.

Barry Cowen (Laois-Offaly, Fianna Fail)
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Housing provision is currently in crisis. That has called for better delivery by NAMA in respect of the social dividend that was promised when it was set up. It now appears that there was nothing new in last week's announcement in respect of providing additional units and that there will be fewer units available to the State in the form of a social dividend by virtue of the change made to the legislation regarding Part V earlier this year. NAMA will deliver 10% rather than 20% and what is being delivered is only being leased; it will not even come into the ownership of local authorities, which might have accrued the benefit, despite the fact that provision seems to be confined to Dublin. The Minister of State has yet to comment on my question, which I have asked twice.

I am asking the Minister of State to comment on behalf of Government on the fact that NAMA is reputedly charging its customers 4% for funding, which customers, in terms of their involvement with NAMA, are already in difficulty, while others wishing to operate competitively to make housing units available to people are being charged 14% to 16% for funding by hedge funds, including one set up by this Government.

Paudie Coffey (Waterford, Fine Gael)
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I reiterate that NAMA has confirmed the delivery of 20,000 residential units by 2020 and it estimates that 90% of the 2020 target will be in the greater Dublin area where the need is greatest. Approximately 75% of these units will be starter homes, 10% of which, as per Part V, will be provided for social housing. The Deputy will be aware from his participation in debates in this House that the cash-in-lieu measure has been abolished. In regard to his criticism of the reduction to 10%, this was done to address the viability issues of development in what is currently a dysfunctional market.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I agreed with that.

Paudie Coffey (Waterford, Fine Gael)
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To be fair, had the cash-in-lieu arrangement not been put in place, we would today have 10,000 additional social housing units to provide for people. The putting in place of that provision was a bad mistake, as has been acknowledged by all.

On the Deputy's question regarding engagement by NAMA with other developers in the market, NAMA operates on a commercial basis. However, it will work with developers who have no current links with it to ensure that a broad array of Irish developers and contractors have every opportunity to contribute to the residential delivery programme in which NAMA is currently engaged. I hope I have clarified the position for the Deputy.

Barry Cowen (Laois-Offaly, Fianna Fail)
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Can the private sector apply to NAMA for funding?