Thursday, 18 November 2021
Nithe i dtosach suíonna - Commencement Matters
National Asset Management Agency
I thank the Minister of State for being in the Chamber. We need to talk about the National Asset Management Agency, NAMA, and, more specifically, what the agency is doing to fulfil its mandate to contribute to the economic and social development of Ireland. While the agency may be fulfilling its economic mandate, it has dropped the ball regarding its contribution to the social development of the State. We often hear about NAMA's duty to achieve the best financial return on the lands and properties it controls. In doing so, the agency cannot but neglect its social mandate. The Department of Finance has provided some clarification in recent weeks in the Dáil Chamber. I welcome the data provided that detailed the agency's housing delivery pipeline and the extent and spread of land for development that it controls.
According to its annual statement for 2022, NAMA fulfils its social objective mainly through the provision of social housing in existing housing stock controlled by the agency. The 2022 report further advises that up to July 2021, NAMA had identified more than 7,000 units as suitable for social housing, but almost 5,000 of these subsequently were not required at the time, deemed unsuitable or became unavailable. While NAMA has provided 629 more units for social housing than its initial target of 2,000, the agency could, and should, be much more ambitious. As NAMA has achieved the delivery of 2,000 units for social housing, it is now time to revisit its targets for social housing delivery and develop a more ambitious strategy for the remaining life cycle of the agency, taking into account the agency's position as a debt-free State-owned entity with €1.2 billion in cash reserves and vast parcels of land in its control.In the context of the worst housing crisis that this country has ever seen, I struggle to accept the arguments against doing so. As I mentioned, more than 5,000 NAMA-controlled units were ear-marked for social housing, but later deemed unsuitable, unavailable or unrequired. Given the significant impact that these units could have had on housing lists around the country, I am of the view that we require a more detailed breakdown of the specific criteria by which these homes were deemed unsuitable, unavailable or unrequired. If it is the case that local authorities or housing associations are not purchasing housing stock that has been offered to them through NAMA, we need to know and hear why.
The National Asset Management Agency Act 2009 states that: "In the exercise of its functions NAMA shall have regard to the need to avoid undue concentrations or distortions in the market for development land." At the same time, NAMA is engaging in practice which can be viewed as distorting the property and development markets. It does so by sitting on vacant housing units and swathes of vacant land, and selling land and developments en blocto multinational property funds, often at prices that are inaccessible to domestic finance. At the Committee of Public Accounts in September, the chairman of NAMA advised that only 8.4% of the development potential of sites sold by the agency had been realised as of March 2021. While I understand that NAMA has certain obligations under the EU state aid rules, the European Commission has advised of the potential for Government intervention to preserve a well-functioning and equitable economy. In dialogue with my colleagues in the Dáil, I note that the Minister has advised that it is not the Government's intention to amend the legislation which provides for NAMA at this late stage in its lifecycle. However, the NAMA Act contains a provision enabling the Minister of Finance to confer "additional functions connected with the functions for the time being of NAMA as he or she thinks necessary for the achievement of its purposes..." Has any consideration been given, or can any consideration be given, to conferring additional functions on NAMA to support it in achieving its purpose, namely, to contribute to the social development of the State, in addition to its economic mandate?
I thank the Deputy for raising the issue in relation to NAMA, which has been ongoing for a number of years. NAMA was given a difficult job to do when it was established as an independent commercial body with a very specific legal and commercial mandate, which was approved not just by the Dáil and the Seanad, but specifically by the European Commission, in 2010. It is following its legislative mandate, as established by this House, the Dáil and the European Commission.
NAMA has, to date, made considerable progress toward the achievement of its objectives. Subject to its commercial mandate, but often complementing it, NAMA continues to seek to make a positive social and economic contribution to the State across its remaining activities. In line with this, a key part of NAMA's remaining mandate will be to continue to make a significant contribution to the supply of housing within the State where it is in a position to do so.
NAMA has already made a significant contribution to social housing, including establishing a special vehicle, National Asset Residential Property Services, NARPS, to expedite delivery. NARPS has leased 1,370 units to local authorities and approved housing bodies, AHBs. In total, to date, NAMA has delivered over 2,640 homes for social housing. These figures exclude social housing delivered on NAMA-funded residential developments in compliance with Part V planning obligations. NAMA has directly facilitated the delivery of 13,000 residential units on secured sites and a further 8,900 units have been built on sites which benefitted from NAMA funding but which were subsequently sold by current and former NAMA debtors and receivers. NAMA has also played a key role in the resolution of unfinished housing estates within the State. While NAMA is delivering houses directly, it is also leasing them to local authorities and AHBs. Houses are also being delivered through the Part V planning process. NAMA has directly facilitated the delivery of 13,000 residential units and 8,900 units have been built on sites which NAMA helped to co-fund. I wish to point out that there has recently been some uninformed commentary on the amount of residential units that NAMA can, and has, delivered. It is important, in that context, to set out the factual situation, which I have set out briefly. On this basis, NAMA expects to deliver a further 2,000 units from its secured portfolio.
In addition to that, NAMA has a broader role in relation to other social aspects of Irish life, including employment, which is very important. In terms of its contribution to urban regeneration, NAMA has been critical in driving and supporting the delivery of new grade A office space in the Dublin Docklands area strategic development zone, SDZ. This development has had the supplementary benefit of encouraging foreign direct investment and bringing much-needed employment to the area. When fully complete, the sites in which NAMA originally had an interest will provide 4.2 million sq. ft of commercial space and over 2,000 residential units. It was directly involved in that area. It is not just working on delivering housing, but on bringing employment into key areas, as part of urban renewal and regeneration.
An important part of NAMA's work is to facilitate the sale of properties for social purposes. NAMA has worked closely with Government Departments, State agencies and local authorities. We all know that a number of years ago, NAMA offered many properties to local authorities around the country. Many local authorities felt that they were not suitable for their purposes. I suspect that if they were offered those properties today, they might take a different view. The properties offered were not always taken up by the local authorities. NAMA has delivered a number of properties to State bodies across Ireland for a variety of purposes, including 25 sites for schools and other education facilities; 18 sites for public amenities, such as parks, sports clubs, community centres and historic sites; 15 sites for essential transport and infrastructure projects, such as roads, flood defences and water treatment; ten sites for urban regeneration and housing projects; six sites for civic offices, Garda stations or healthcare facilities; and various sites for Industrial Development Authority, IDA, projects. Therefore, it has been very active within its commercial mandate, helping so many sectors of the economy and delivering housing.
As the Chair of the Committee of Public Accounts, in 2019 the Minister of State himself commented on the unacceptable delay in terms of what NAMA should be doing, yet, according to his presentation today, NAMA is doing all that it can. I am wondering what has changed since 2019. One of the key points is that NAMA states that it will not build the 10,000 units that it could, because they are not viable. I wonder according to whose analysis they are not viable. Could NAMA not work with agencies, such as Ó Cualann, which are saying that they can build viably, to build on those sites? Of the units that the Minister of State mentioned, how many are sold on to private investors?
I am not saying the Senator is unaware of this, but it is important to note that NAMA does not own the development sites in its portfolio. The public does not necessarily know that. NAMA owns the loans; it does not own the land or the properties. The properties are owned by developers who owe money to NAMA. If the developers can clear their debts with NAMA, they are gone. If they clear their debts to the State, they are gone. NAMA does not own the sites over which it has mortgages. It has a financial interest, but it cannot direct issues on those matters.
As I mentioned, NAMA has helped with unfinished housing estates. NAMA expects to transfer a total lifetime surplus of €4.25 billion to the State as a result of its work. To date, €2.75 billion of this surplus has already been transferred to the State. Ultimately, one of NAMA's contributions to the social and economic development of the State will be the full redemption of the €32 billion in debt, thus eliminating any further contingent liabilities to the State. This comprises €30.2 billion of Government-guaranteed senior debt and €1.6 billion of subordinate debt, as well as the payment of €2.7 billion surplus to the Exchequer, with another €1.5 billion planned. The best job that NAMA can do is to get all that money back for the State so that the State has the value of it to do all the things that I have just spoken about.
NAMA has done a lot of good work. When it winds down, I think its main achievement will be to have returned over €4 billion to the State, together with delivering the full list of projects that I mentioned earlier.