Correcting a poor record
SINCE 2009, when the National Asset Management Agency (Nama) was established, its record on social housing has been poor. To date a mere 60 properties have been provided by the agency; by the end of the year the number is expected to have reached only 200. Last year, the Government promised that Nama would make available 2,000 houses or apartments for social housing in 2012. However, both the Government and the agency greatly underestimated the difficulties involved in making the properties available and the numbers have fallen well short of the target set.
Lessons, it seems, have been learned from that embarrassing failure. Nama remains confident that it can acquire some 2,500 vacant properties for social housing by the end of next year. Likewise, Minister for Housing Jan O’Sullivan predicts that by then “the majority of social units will be delivered”. But given the delay and the shortfall in providing social units to date, there are grounds for public scepticism about the 2013 forecast.
Previously, the difficulty lay in the length of time that Nama took to identify suitable properties for acquisition. By last December, when the list of properties was finally complete, almost half of the houses and apartments listed were no longer available. Some had already been sold, or let. And local authorities had rejected others as being no longer suitable for use.
Nama has now made an important change to speed up the delivery of social housing units. It has set up a special company to acquire suitable properties from debtors, which enables them to reduce the amount owing on their loan. Nama Asset Residential Property Service will then lease the property directly to a local authority or housing association. This new arrangement is designed to reduce the complexity of the old system, which resulted in delay and uncertainty and failed to deliver social housing units in the required number, as and when needed.
If, by the end of next year, Nama does deliver the number of housing units promised, it will have achieved a small reduction in the long waiting list for social housing. At present that figure is almost 100,000, up from 58,000 in three years. The sharp rise reflects the economic downturn’s impact, where the slowdown in growth and the rapid rise in unemployment have meant fewer people can afford private rented accommodation.
Nama’s primary function is to take mainly property development loans from the banks and to secure for the State the best possible return from these acquired loans. However, the agency also readily acknowledges the wider contribution that it can make to the social and economic life of the country – social housing being one example. Nama’s altruism in meeting social needs is tempered by the economic reality that whatever it does in this regard must also make commercial sense.
And given that the Government does not have the funds either to buy or build any more local authority housing, Nama’s relatively modest contribution to the provision of social housing will, nonetheless, be greatly welcomed in these straitened economic times.