Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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83. To ask the Minister for Finance his views on the use of NAMA-controlled properties to assist in providing affordable housing to persons; if he will use his powers under the NAMA Act 2009 to this end; and if he will make a statement on the matter. [1751/17]

Michael Noonan (Limerick City, Fine Gael)
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Let me begin by clarifying that I am taking your use of the words "affordable housing" to refer to housing made available to tenants at below market prices.  

Assets often referred to as "NAMA land" or "NAMA properties" are not owned by NAMA.  NAMA owns loans.  Such property is owned by private persons who owe money to NAMA ("NAMA debtors") and serves as collateral for those amounts owed.  It is the income and proceeds generated from this property, via rental or sales, that is used by NAMA debtors to repay what they owe to NAMA.  This is the same relationship as between a mortgage lender and mortgage borrower, where the borrower pledges the purchased house as collateral against the mortgage, but still retains control and ownership of the house.  The lender does not own the property and generally has no rights to influence the borrower's use of that property, beyond the contractual provisions set out in the loan.

The borrower has the right to maximise the value of the property which secures his/her loan.  A lender cannot force a borrower to take action which would reduce his/her repayment capacity, such as providing property for affordable housing where that is not economically optimal.  To do so would breach the borrower's property rights protected under Article 43 of the Constitution.  Specifically relating to your question, NAMA cannot direct its debtors or receivers to use property for purposes where that is not economically optimal.

I cannot accede to your request to use my powers under the NAMA Act in this instance, as I am advised that such a direction is not one lawfully open to me in the current circumstances.

A more relevant question is whether a potential purchaser is willing to pay market value for a property and then offer it for affordable housing at below market prices?  Subsidies that allow for the social use of assets are typically borne by the State in the form of direct provision of accommodation, social welfare payments, rent subsidies and other social supports.  The reality is that providing such subsidies requires the best use of limited Government resources.

Local Authorities are not precluded from acquiring properties for affordable housing purposes, including properties owned by NAMA debtors.  NAMA continuously reviews the assets of every NAMA debtor to establish if properties securing their loans could be utilised for residential development or social housing and with the cooperation of its debtors is willing to make such opportunities available to local authorities and approved housing bodies. 

In fact, NAMA has an established policy of identifying to Local Authorities, properties which may be suitable for their purposes. NAMA has facilitated the sale or lease by its debtors and receivers of properties, on commercial terms, to public bodies for a wide-range of purposes, including social housing; schools; healthcare facilities; and urban economic, environmental and cultural regeneration.  All such transactions are executed at market value. 

However, NAMA can only identify these potentially suitable properties and, ultimately, it is a matter for local authorities to determine which properties are most suitable for their housing needs. This process has seen the delivery of almost 2,400 units to local authorities, with a further 370 in the delivery pipeline.

NAMA also plans to facilitate the delivery of up to 20,000 private residential units to end 2020, assuming commercial viability. 

I would refer the Deputy to NAMA's 2016 Year End review which highlights the significant achievements in delivery of social and private housing as well as many other key performance metrics.

I recognise the urgency of the issues you are seeking to address and believe NAMA does play a part in addressing these issues in line with its mandate.  I believe the NAMA Board has appropriately balanced and is effectively carrying out its mandate, including a significant social and economic contribution.