Joan Burton (Dublin West, Labour)
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294. To ask the Minister for Finance the amount of funding which has been made available through the Ireland Strategic Investment Fund for social and affordable housing provision; if he has satisfied himself with the current rates of interest being charged to borrowers through the fund; if he is reviewing the operation of the mechanisms through which credit is accessed from the fund; and if he will make a statement on the matter. [1669/17]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware policy initiatives in the area of housing must seek to address the challenges faced by the various sectors of the market, including the private owner occupier market, the rental market, and the social housing sector. In line with its statutory mandate, the Ireland Strategic Investment Fund (ISIF) is examining opportunities to make, on a commercial basis, strategic investments that have the potential to support increased social housing output.

In the private market, the Fund is already involved in a number of important initiatives which cumulatively can make a contribution to increased housing output.  This includes its investments in:

- Activate Capital - which is an innovative non-bank financing platform that has the potential to provide funding for substantial numbers of new homes in Dublin and the other major urban centres in which demand is most pronounced;

- Ardstone Residential Partnership - which is a residential equity investment fund that is focused on delivering residential units to the market over the short-to medium-term; and

- Wilbur Ross Cardinal Commercial Real Estate Mezzanine Debt Fund - which has funded a number of residential developments in recent months.

Activate Capital, which has the potential to fund the delivery of up to 11,000 new housing units over the medium term, has already advanced funding for the construction of 1,200 new houses in the greater Dublin area. The Ardstone Fund has to date acquired sites with the potential to deliver up to 1,800 new housing units which will be delivered over a 5-7 year time frame and is targeting a total delivery of up to 3,000 new units. The Wilbur Ross Cardinal Fund, which has a focus on multiple real estate sectors, providing both pure finance and development capital, has already advanced funding for 1,700 new residential units.

In the social housing market, in line with the commitment contained in "Rebuilding Ireland" the NTMA and the key Government Departments are examining the feasibility of establishing a funding vehicle in conjunction with the private sector, which could facilitate investment in social housing. Key factors which must be addressed to facilitate ISIF involvement in such projects include:

1. the commercial viability of the vehicle; and

2. the off-balance sheet structure of the vehicle.  

ISIF informs me that whilst it has made progress in conjunction with other stakeholders in the State and private sectors in respect of potential social housing investment opportunities, there are still considerable hurdles to be overcome before any such proposals can be brought to a successful conclusion. The Deputy will appreciate that whilst ISIF is working closely with all relevant stakeholders to help overcome hurdles to investment in social housing, many of these hurdles are outside the control of ISIF and require strong inputs from other stakeholders. 

In relation to interest rates charged by ISIF, ISIF invests on a risk adjusted basis. In this context, the interest rates applied by ISIF to any given investment relates to the level of risk and other investment criteria, including pricing, and reflects its mandate to act commercially and in a way that contributes to the local economy.

A review of ISIF's investment strategy is due to be finalised shortly. The review includes an appraisal of the success of ISIF's mandate to date. The NTMA (Amendment) Act 2014 provides that ownership of the Fund vests with the Minister for Finance. It also provides that the Fund shall, in reviewing its investment strategy, consult the Minister for Finance and the Minister for Public Expenditure and Reform. The review of the ISIF will be conducted in accordance with these provisions. In addition, the legislation provides that the Minister for Finance may consult with other Government Ministers as appropriate.