Nama may be forced to deliver on social housing
THE GOVERNMENT is considering plans to amend legislation that would oblige the National Asset Management Agency (Nama) to deliver more social housing and public amenities.
Nama, created to purge banks of toxic property loans, has purchased some €31 billion of loans connected to thousands of residential properties – loans valued at over €72 billion at the height the property bubble.
There is frustration in some circles of Government that the agency is not under any formal obligation to provide a “social dividend”.
Minister for Housing Willie Penrose is understood to have written to the Attorney General in recent weeks seeking clarity on how Nama’s terms of reference could be changed to give it a broader remit that goes beyond securing the best achievable financial return for the State.
Officials fear the agency is too focused on its commercial remit to generate profits and feel the State is at risk of losing out on opportunities to maximise the social benefit of large landbanks and thousands of residential properties. However, a spokesman for Nama yesterday insisted the agency was mindful of meeting social needs where it made commercial sense.
He pointed out Nama had facilitated the purchase of almost 60 apartments in Sandyford recently by a voluntary housing association which are being made available for social and affordable housing.
In addition, Nama’s spokesman said the agency was reviewing its portfolio of residential units to identify others that may be suitable for social housing purposes.
Nama is linked to an estimated 10,000 residential units, the majority of which are apartments or duplex units.
Latest figures show the scale of the need for social housing has reached a record high of 98,000 households, as the Government says it does not have funds to buy or build local authority housing.
In addition, pressure is growing on homeless services, while demand for social housing is set to increase as the State moves to close outdated institutions which house thousands with disabilities or mental health problems.
The Act which established Nama requires the agency to obtain the “best achievable financial return for the State” having regard to the cost to the exchequer of acquiring and dealing with bank assets. While it is a listed functionto “contribute to the economic and social recovery of the State”, there is no reference in the legislation to a social dividend or supporting the planning and sustainable development of the State.
Any attempt to make Nama’s remit broader is likely to require legislative change. While the Minister for Finance is able to confer additional functions on the agency, he does not have the power to impose additional objectives, such as the delivery of social housing, education, public transport or public health dividends.
Government sources say that if its remit was changed, Nama could transfer land or housing developments to local authorities or other bodies who would be in better position to get the best long-term outcome for the State as a whole.
They say how Nama disposes of its properties will be crucial to the State’s long-term development.