I would refer the Deputy to my response to Parliamentary Question 72 of 10th December 2015, among others, on the same topic.
In that response, I pointed out that NAMA is not a property developer. NAMA's role is, like the owner of any non-performing loan, that of a secured lender which makes a commercial decision to advance funding to maximise its return. As a secured lender, NAMA provides funding to its debtors and receivers where it is shown that this will increase the overall recovery for NAMA from the security being funded.
The Minister for the Environment, Community and Local Government has responsibility for planning legislation. Part V of the Planning and Development Act dictates the required provision of social housing as part of new residential developments. Residential projects delivered by NAMA debtors and receivers, which may be funded by NAMA, are subject to the same planning requirements as all other applicants in the planning process, including Part V legislation which requires the provision of 10% of housing units for social housing. The Government recently amended Part V to remove the ability of developers to account for their social housing commitments through cash payments to local authorities and furthermore to ensure that the social housing will be located predominantly on the site of the original developments, not off-site as had been a feature of Part V since its introduction. NAMA debtors and receivers will fulfil their Part V obligation to deliver 10% of residential units in the form of on-site social housing units.
Similarly, I have recently explained that NAMA cannot subvent the supply of social housing. Section 10 of the NAMA Act requires NAMA to act in a commercial manner to obtain the best financial return for taxpayers. In line with NAMA's obligations under Section 10, all residential projects will be required to pass a stringent commercial viability threshold before NAMA approves funding and funding will only be made available if it is expected to increase the overall recovery for NAMA from the security being funded. NAMA must act akin to a private sector commercial entity. In essence any funding that NAMA may provide must be expected to enhance NAMA's overall recovery on its loans. More specifically, any funding provided by NAMA must be provided on commercial terms to its debtors and any resulting units constructed must be sold at the prevailing market rate to ensure that NAMA is maximising the recovery on its loans.
With NAMA estimating that 20,000 residential units may be delivered under its Residential Funding Programme between 2016 and 2020, the corresponding Part V contribution of 2,000 social housing units should not be forgotten. As with any delivery of housing, the Part V contribution is a meaningful contribution to social housing supply.
Furthermore, NAMA has already played a very important role in facilitating, on a commercial basis, the supply of houses and apartments for social housing from within its existing portfolio. By the end of this year, NAMA will have facilitated the supply of 2,000 houses and apartments for social housing through its debtors and receivers. This equates to more than one-third of total social housing provision under Part V (Social Housing) legislation in the years between 2002 and 2011. It should also be noted that NAMA originally made over 6,500 houses and apartments available for social housing under this commercial initiative but local authorities confirmed demand for just over 2,500 of these.
Therefore, NAMA's contribution to the housing market and, by association, social housing, is ongoing, timely and welcome. The core housing issue that we currently face is that of insufficient supply across all types of housing including social housing. It is only by substantially increasing housing supply generally, particularly in the greater Dublin area, that we can deliver a sustainable solution to the current housing situation. By increasing the level of housing output, Part V will ensure the direct supply of a certain amount of social housing. An increase in the level of housing output will also increase the affordability of housing generally, which in turn will have a positive effect on the ability of local authorities to provide social housing directly.
NAMA will continue to play a role in addressing this shortage but, for the reasons outlined above, it is not feasible to expect the Agency to be a panacea or to provide units on anything other than commercial terms.
The Government has a number of strategies in this regard, which I have previously remarked on - namely our Social Housing 2020 strategy, which will provide 35,000 new social housing units over the period to 2020, a significant increase in funding for addressing social housing and homelessness to tackle more immediate issues facing families, and the recently announced amendments to rent reviews.
