Brendan Griffin (Kerry South, Fine Gael)
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171. To ask the Minister for Finance his views on correspondence (details supplied) regarding social housing construction; and if he will make a statement on the matter. [44137/15]

Michael Noonan (Limerick City, Fine Gael)
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I welcome the announcement by NAMA that, subject to commercial viability, it expects to be in a position to fund the construction of up to 20,000 new residential units, predominantly located in Dublin and the neighbouring counties of Wicklow, Kildare and Meath, over the next five years. NAMA will in this way make an important contribution, on a strictly commercial basis, to increased supply over the coming years and will be part of the overall housing solution, although only one part of the solution. 

NAMA debtors and receivers control about 30% of zoned residential sites in the Dublin area. Accordingly, market participants who control the other 70% of the sites also have a major role to play in addressing the supply/demand imbalance in the years ahead.

This Government is examining what role it can play in supporting increased output by the wider development sector and in particular is examining how to address infrastructure deficits that are holding up the supply of commercially viable new housing in the main urban growth centres.

I am encouraged by the increasingly visible activity of other market participants as demonstrated by the recent announcement by Cairn Homes that their successful acquisition of Ulster Bank's Project Clear portfolio will provide them with the opportunity to build over 14,000 new homes, with an expected net development value of in excess of €2 billion.

The Deputy rightly identifies increased social housing provision as a priority for Government. That priority is reflected in the housing package announced recently by Minister Alan Kelly and in the substantial increases in direct Exchequer funding for social housing over the lifetime of this Government. 

It is important to point out that NAMA cannot subvent the supply of social housing. Section 10 of the NAMA Act requires NAMA to act in a commercial manner to obtain the best financial return for taxpayers. In line with NAMA's obligations under Section 10, all residential projects will be required to pass a stringent commercial viability threshold before NAMA approves funding and funding will only be made available if it is expected to increase the overall recovery for NAMA from the security being funded. NAMA must act akin to a private sector commercial entity.

NAMA has, however, already played a very important role in facilitating on a commercial basis the supply of houses and apartments for social housing from within its existing portfolio. By the end of this year, NAMA will have facilitated the supply of 2,000 houses and apartments for social housing through its debtors and receivers. This equates to more than one-third of total social housing provision under Part V (Social Housing) legislation in the years between 2002 and 2011. It should also be noted that NAMA originally made over 6,500 houses and apartments available for social housing under this commercial initiative but local authorities confirmed demand for just over 2,500 of these.

Therefore, NAMA's contribution to the housing market and, by association, social housing, is certainly both timely and welcome. The core housing issue that we currently face is that of insufficient supply. It is only by substantially increasing housing supply, particularly in the greater Dublin area, that we can deliver a sustainable solution to the current housing situation. By increasing the level of housing output, we will increase the affordability of housing generally, which in turn will have a positive effect on our ability to provide social housing.

NAMA continues to be mindful of commercially attractive opportunities in the social housing sector. However, the reality is that current social housing delivery models require direct Exchequer subvention. The Government is fully committed to delivering on our Social Housing 2020 strategy, which will provide 35,000 new social housing units at a cost of €3.8 billion over the period to 2020.

We are also combining these long terms measures with interim solutions to deal with the immediate issues that families currently face. This is why Budget 2016 increased the current allocation for social housing by €69 million to €414 million. This will enable local authorities to secure accommodation for an additional 14,000 households.

Under the Government's 6 year capital investment framework, "Building on Recovery: Infrastructure and Capital Investment 2016-2021", which was recently announced by Minister Howlin, the current allocation for emergency accommodation for the homeless, has been increased by €17 million. This increase will bring Exchequer support to €70 million, which amounts to a 56% increase since last year. This injection of funding will help the homeless transition to long term sustainable housing.

The Government also recently agreed on a package of measures designed to give certainty to tenants in relation to their rent, to better protect tenants in their homes and to provide clarity to both tenants and landlords as regards their rights and obligations. The primary measure in this package is the amendment of the Residential Tenancies Act so that rent reviews for all tenancies will take place every 24 months, rather than every 12 months as currently is the case. This will provide tenants with a longer period of predictable rent.

Therefore, addressing the issues facing the housing market generally, social housing, and homelessness, particularly among families, are clearly key priorities for this Government. The above measures are tangible evidence of our commitment to tackle those issues head on.