Catherine Connolly (Galway West, Independent)
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44. To ask the Minister for Finance if NAMA is contributing adequately to the social and economic development of the State in accordance with its statutory duty under the National Asset Management Agency Act 2009; if so, the way it is doing so; the consideration that has been given to include obligations on the purchaser to build homes as a measure to alleviate the housing crisis; and if he will make a statement on the matter. [16446/17]

Pat Gallagher (Donegal, Fianna Fail)
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The next question is in the name of Deputy Catherine Connolly. Permission has been given to Deputy Mick Wallace who has 30 seconds to introduce the question.

Mick Wallace (Wexford, Independent)
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What kind of a society will we have when the Government of the day allows NAMA to sell housing to vulture funds for approximately half of their cost to build and there are more than 7,500 people homeless? Is there any chance that NAMA would play a stronger role? In any development that it is involved in, it is supposed to be delivering 10% social housing. Given that this is not enough, does the Minister not think that it should be also engaged in providing affordable housing rather than expensive housing?

Michael Noonan (Limerick City, Fine Gael)
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I thank Deputy Catherine Connolly for tabling the question and Deputy Mick Wallace for acting as proxy and articulating the issue in the House.

I am satisfied NAMA has made and continues to make a significant contribution to the social and economic development of the State.  Its principal contribution to social and economic development has been the major progress that it has made in eliminating Irish taxpayers' contingent liability of €30 billion which arose from the Government-guaranteed senior debt issued in order to acquire bank loan portfolios.  As of today, 95% of that senior debt has been redeemed and NAMA has indicated that it expects all of it to be redeemed by the end of 2017.  NAMA also expects to redeem its subordinated debt by March 2020 and to produce a surplus, which is currently estimated at €2.3 billion, by the time it completes its work.

NAMA has also made a major contribution in driving the development of commercial and residential accommodation in the Dublin Docklands SDZ. This will attract foreign direct investment into Ireland and will create a substantial number of jobs.

NAMA has made a significant contribution to social and economic development in other respects also. I refer the Deputy to NAMA's website, www. nama.ie/social-initiatives/,which contains extensive information on how NAMA seeks to manage its portfolio in a manner that complements the objectives of Government Departments, local authorities, State agencies and public bodies.  NAMA's work in this respect includes the provision of homes for social housing and properties for schools and other public uses. NAMA also works closely with IDA Ireland to identify suitable properties for companies investing in Ireland. All this has been managed in the context of NAMA's overriding commercial mandate, as set out in section 10 of the NAMA Act. 

NAMA has made a substantial contribution in the social housing sector by working with its debtors and receivers, the Housing Agency, local authorities and approved housing bodies. It established the NAMA asset residential property service, NARPS, as an innovative model to expedite social housing delivery.  NARPS has significantly reduced the upfront capital costs for local authorities in delivering to date more than 2,370 residential units for social housing.

Additional information not given on the floor of the House

NAMA also played a key role in the resolution of unfinished housing estates within the State.  In 2010 NAMA had exposure to 332 unfinished housing estates. That has now reduced to 11 unfinished estates at this stage and they are expected to be resolved by end-2017.

I would also point out that NAMA is seeking to facilitate the delivery of 20,000 homes over the period from 2016 to 2020, subject to commercial viability.  Since 2014, NAMA funding has facilitated the delivery of 4,700 units by its debtors and receivers.

As regards the Deputy's question as to the obligations on purchasers to build homes, I am advised that NAMA contributes to the delivery of housing in three ways. First, as mentioned above, it seeks to facilitate and fund the delivery of 20,000 homes by 2020 through funding residential projects controlled by its debtors and receivers. Second, its debtors and receivers sell sites to the market which enables other developers to contribute to housing delivery. Sites for 40,000 units have been sold since 2010. As the Deputy will appreciate, it is not possible to impose legal obligations on asset purchasers to undertake activity without significant loss in the site values. Third, NAMA enters into licence arrangements with non-NAMA developers which require them to carry out development on sites securing NAMA loans in return for a fee.

Taken together, I hope the Deputy will agree that NAMA has made, and continues to make, a significant contribution to the social and economic development of the State and that it does so successfully within the context of NAMA's overriding commercial mandate, as set out in section 10 of the NAMA Act.

As the Deputy is aware, does not own property.  owns loans.  As a lender, cannot force a borrower to take action which would reduce his or her repayment capacity such as providing a property for social or private housing where that is not economically optimal.  To do so would compromise a borrower's capacity to repay his or her debts to and would constitute a direct breach of the borrower's property rights, as protected under Article 43 of the Constitution.  I am advised that a direction running counter to these obligations is not one lawfully open to me in all the current circumstances.

Mick Wallace (Wexford, Independent)
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Section 2(b)(viii) of the NAMA Act provides that NAMA should "contribute to the social and economic development of the State". At the housing committee, Frank Daly of NAMA stated that "the biggest social dividend we can deliver indirectly is to pay this back as quickly as we can". He was speaking of the debt, much as the Minister was now. If NAMA returned what it called a profit of €2 billion or €2.5 billion over the 11-year period, it would be looking at a return of something in the region of 7%. The vulture funds would not dream of buying from NAMA unless they were guaranteed a minimum of 20%. In most cases, they are getting a lot more.

My point is that NAMA is talking about delivering houses for €330,000 each. If 10% of them were social houses, it means that 90% cost more than €300,000 each. Of those in Ireland that need housing today, 90% of them cannot possibly afford a price north of €300,000 which is what NAMA is seeking. Would the Minister consider getting NAMA involved in providing affordable and not just social housing? At the moment, Dublin City Council states that it can provide a three-bedroom house for €205,000.

Pat Gallagher (Donegal, Fianna Fail)
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We are running out of time.

Mick Wallace (Wexford, Independent)
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With the NAMA price, a huge profit is built in.

Michael Noonan (Limerick City, Fine Gael)
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The issue in the question is whether NAMA is delivering on its social mandate under the NAMA Act. I have already stated that it has delivered 2,370 residential units through NARPS. When it began in 2010, there were 332 unfinished housing estates. There is now 11 because it finished out all those estates. It has, therefore, contributed significantly to housing supply. It is also now committed to facilitating the delivery of 20,000 homes between 2016 and 2020 and it has delivered 4,700 of those already. It has also supplied a quantity of sites for primary and secondary schools. It has provided facilities for sports clubs throughout the country and has worked closely with IDA Ireland to supply premises or sites for companies coming in from abroad that are creating jobs. My point is that NAMA is very strong in fulfilling the social mandate that it was given by this House under the relevant section of the Act.

Mick Wallace (Wexford, Independent)
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I do not think many people in the country would agree with the Minister. Speaking of a social dividend, when Dublin GAA failed to get the Spawell complex from NAMA, the CEO, John Costello, stated, "When the legislation went through the Dáil at committee stage the community development provision was added but I can't find any example of this being taken into account."

We understand the Davy Group is negotiating with and, by all accounts, treating Dublin GAA in a fair manner. If the notion of NAMA providing a social dividend was to have any meaning, the agency would have worked the Spawell facility towards Dublin GAA in the first instance. I do not understand NAMA's approach of selling the asset to someone who would subsequently sell it on to Dublin GAA. While I do not disagree with Westport House being taken out of the NAMA portfolio, I disagree with the political process surrounding the decision. It makes sense to remove assets that should remain in the hands of the State or a sports body. NAMA did not do that, however, and I do not understand the reason the Government stood idly by in this case.

Michael Noonan (Limerick City, Fine Gael)
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While I do not wish to comment on individual cases, I have already cited examples of cases where NAMA is fulfilling its social mandate in an extensive manner. I also referred the Deputy to NAMA's website, www.nama.ie/social-initiatives, where he will find details of the various social initiatives the agency has taken under the Act.