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Social and Affordable Housing

Dáil Éireann Debate, Thursday - 2 February 2012

Thursday, 2 February 2012

Questions (4)

Dessie Ellis

Question:

5Deputy Dessie Ellis asked the Minister for the Environment; Community and Local Government his plans for the use of social housing from the National Assets Management Agency stock; the estimated cost; and the way these will be paid for. [6168/12]

View answer

Oral answers (5 contributions)

The housing agency is working with NAMA to determine the social housing demand for individual properties identified by NAMA. In that context, the agency is contacting the relevant local authorities to consider existing demand in terms of numbers, types and locations of properties required to meet social housing needs in the relevant authorities. The agency will provide a co-ordinated response to NAMA with a view to securing as many of the properties as are suitable as quickly as possible.

The units being advanced through NAMA will, in general, be provided through the social housing leasing initiative under the standard terms and conditions that apply in that scheme. A local authority will have the option of leasing the properties directly from the relevant borrower or receiver. Alternatively, an approved housing body may secure the properties through direct leasing or, in some cases, by purchasing using private or HFA finance and leasing them back to the State.

It is not possible at this stage to estimate the cost of leasing these properties. Lease costs are determined by negotiation using a standard discounted market price which may vary to reflect the circumstances of a particular case and the terms of the contractual agreement. The current average annual cost of units leased from the private or voluntary sector under the leasing scheme generally is approximately €7,400.

Just before Christmas, NAMA announced it had approximately 2,000 properties available for local authorities and housing associations and that funding would be made available through the social housing leasing scheme, which the Minister of State mentioned.

NAMA bought the debts at a reduced rate. It did not buy the properties. Would it not make more sense to call in the debts and have the properties returned to the State fully owned if the property developers cannot deliver? It does not make sense for local authorities to rent from developers who, in turn, will use the money to pay NAMA. Will the money go directly to NAMA or to the property developers who, in turn, will pay off NAMA? Since the scheme is a lease scheme, does this mean the properties will be returned to the developers? If so, they will have it both ways in that they will get their properties back and the local authorities and housing associations will pay the debts. This is a matter of the State paying on the double. It does not make sense. Could the Minister of State address some of these points?

The proposal is to achieve value for money for the State. The capital budget has been reducing considerably in recent years and is quite low at this stage. We are obtaining good value for the State in that we are accommodating a sizeable number of people under leasing arrangements. Approximately 20,000 households are accommodated under leasing and RAS arrangements. NAMA properties will be under the scheme.

We must operate according to the law. NAMA has been given a legal role and, although we may wish local authorities could acquire properties for nothing from NAMA, the reality is that this cannot be done. The properties in NAMA are there because the owners concerned cannot pay their debts. This is a way of using the properties available under NAMA to house families who need housing in a way that represents value for money and which will work for those concerned.

The Deputy stated approximately 2,000 units have been made available. We must assess whether they are suitable and in appropriate areas. There are a number of elements that must be determined but what will happen in effect is that approximately 2,000 units will be made available for social housing in various parts of the country. They will provide homes for people. While we might wish to obtain the properties for nothing, this simply cannot happen; it is not a realistic proposal. They must be acquired at market values and in a way that works under the regular leasing systems already in place.

We are not requesting the properties for nothing. We have paid for them. We have certainly bailed out many people in doing so. We have helped to get many developers out of hot water. I do not accept we are asking for the houses for nothing.

The Minister of State said the scheme may result in a short-term gain, but in the longer term it is not in the best interest of the country. It is certainly not in the interest of the State that we are paying developers to pay off NAMA. It does not make sense. We should consider another way of doing business. The Minister of State is saying there is a legal requirement based on the approach we have taken. It appears as if we are helping developers who got themselves into trouble and paying them on the double.

This is essentially about providing homes for families who need them. NAMA has been given a job by the State to get the best possible value for taxpayers' money with regard to the properties that have come under its remit. It has a social element and this is in the legislation. It is in accordance with this element that houses are being sought for those in need of them around the country. The State is ensuring this will be done in a way that represents value for money and which provides good homes for the people who need them. This work is ongoing.

Under the legislation, NAMA must operate in a way that provides some return to the taxpayer. Ultimately, the taxpayer must be protected. I am very happy as Minister of State responsible for housing to stand over what we are doing in this regard. The people who will ultimately be accommodated because of this will also be very happy.

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