Developer calls for for Nama to invest in housing

Noel Smyth urges Minister for Environment to take steps to boost construction

Noel Smyth,  of  Fitzwilliam Real Estate Capital, argued  that as many as 25,000 housing units could be developed within three years. Photograph: Dominic Lipinski/PA Wire

Noel Smyth, of Fitzwilliam Real Estate Capital, argued that as many as 25,000 housing units could be developed within three years. Photograph: Dominic Lipinski/PA Wire

Thu, Aug 21, 2014, 01:00

A property developer has called on the Government to direct the National Asset Management Agency (Nama) to take new steps to settle the housing shortage in Dublin and boost the construction industry.

Noel Smyth, managing director of property firm Fitzwilliam Real Estate Capital, argued in a paper submitted to Minister for Environment Alan Kelly that as many as 25,000 housing units could be developed within three years.

Mr Smyth, who is also a solicitor, said the Nama Act has “emasculated” the agency from being able to ensure that assets which it controls and for which there is huge demand “can be properly developed and built out”.

Nama should now be told to make direct arrangements for institutional and other investors to build new homes on sites it owns, he said.

The aim was to bring property already owned by taxpayers – via Nama – to the market in a “creative and opportunistic way” of using existing sites to get development under way quickly.

This would help fill the gap in the housing market and provide a kick-start to the construction industry, Mr Smyth said.

He called for Nama to enter licensing arrangements under which sites would be offered to the market in open competition with the proviso that developers or investors receive title on the sites only on “practical completion” of the individual houses in question.

Practical completion

In sum, developers or investors would build on, but not own, the site until completion of the houses.

Mr Smyth also said developers or investors should be obliged to enter positive covenants to complete the houses within 12-24 months of entering the licence in question.

The licences would be acquired at an average price of €100,000 per site, with 25 per cent payable on the granting of the licence and the balance payable on the achievement of practical completion.

Mr Smyth said the initiative would be a refinement of the manner in which local authority housing was developed in the 1960s and 1970s.

“In those days, local authorities identified a particular site, anything from six to 50 houses, and then invited various builders to tender for the building work in respect of those houses,” he said.