Dáil Éireann Debate, Wednesday - 18 May 2016
10. Deputy Mattie McGrath asked the Minister for Finance his views on the use of compulsory purchase orders to acquire housing stock from the National Asset Management Agency to alleviate the social housing crisis; and if he will make a statement on the matter. [10199/16]
Amharc ar fhreagraAs the Deputy is aware, the National Asset Management Agency does not own or sell properties. NAMA acquired loans and the properties that secure these loans are owned by the agency's debtors. NAMA's legal relationship with these debtors is much the same as a bank's relationship with its mortgage holders where the bank holds a claim against the house as security for the mortgage. On 12 May 2016, NAMA's chairman advised the Committee on Housing and Homelessness that almost all of the 6,000 residential units owned by NAMA debtors are occupied by tenants. I assume the Deputy's question does not refer to the use of compulsory purchase orders, CPOs, for tenanted units, as such action would displace existing tenants. NAMA related residential units which are vacant are available for sale in the market by NAMA's debtors and receivers at market value.
Compulsory purchase orders allow a relevant statutory body to acquire an asset at market value from an otherwise unwilling seller. CPO powers are not necessary in the case of NAMA related residential units as such units are being sold willingly at market value and are, therefore, available to be purchased by local authorities or housing bodies.
CPOs allow a relevant statutory body to acquire an asset at market value from an otherwise unwilling seller. CPO powers are not necessary in the case of NAMA-related residential units, as such units are being sold willingly at market value and so are available to be purchased by local authorities or housing bodies.
Separately, NAMA has made a significant contribution towards social housing supply through its policy of providing first option to State bodies on the purchase of property. NAMA offered 6,637 residential units, the totality of NAMA's vacant housing stock at the time, to local authorities for social housing. Local authorities confirmed demand for 2,540 of these units, of which 2,042 have been provided for social housing at a cost to NAMA of more than €250 million. NAMA has no role in determining which of these units are taken up for social housing. That is a matter for the local authorities and housing bodies. I also understand that NAMA is currently re-examining its remaining portfolio to identify if any additional units may be available to offer to local authorities.
I certainly do not support taking houses from tenants but I want to discuss a particular issue. Edmund Honohan attended the Oireachtas Committee on Housing and Homelessness and what he said was very interesting. We all know how compulsory purchase orders have been used in the case of developing roads and other infrastructure but he put forward an imaginative suggestion that they could be used in the case of NAMA and of vulture funds. He suggested that where houses, with tenants or otherwise, are being sold from under the feet of people, the State should be able to come in and purchase those houses rather than have to add these people to the housing lists and go through the system of rehousing them. It should intervene at the time of the crisis.
We had a presentation on this crisis today in the AV room. The crisis is huge, is escalating and we cannot hide from it. Hundreds of repossession cases per day are lined up for the courts. Legislation in other jurisdictions, in America in particular, ensures the vulture funds and others must take the good with the bad. Interventions are made and properties are bought back from them, despite the fact they bought them at rock down prices in order to make a killing. These other jurisdictions buy these properties back under this kind of legislation. If people are living in them, they can continue as tenants and if not, the properties are provided to people who are homeless.
The difficulty is that if an investment fund buys an apartment block, for example, it is buying an apartment block which is almost fully tenanted because the value lies in the fact the tenants are paying rent. If they were to help in resolving the housing crisis, they would need to be buying vacant properties. They do not look for vacant possession because of, as we can see, the adverse implications of that.
If there was a supply of vacant housing, local authorities should certainly apply that for social housing. However, the supply of vacant and available property is limited. NAMA has some vacant and available supply and offered that to local authorities. Sometimes local authorities do not have money, so NAMA has a kind of special purpose vehicle that leases property to a local authority on a 20-year basis. I believe it is leasing approximately 1,600 houses on that basis currently and there may be further potential in this regard. The CPO route acquires property at market value from an unwilling vendor. NAMA is not an unwilling vendor but wants to sell what it has at market value.
I mentioned the issue of vacant properties in my question and we would like those types of properties to be taken in hand. We need some kind of imaginative examination of the situation to give some indication to people being made homeless that the Government is doing something to find a solution. We want some indication vulture funds are not just being allowed to come in and sweep up these properties. Our nearest neighbour across the pond has proposed legislation in this regard now. Are we just going to wring our hands and accuse people like Deputy Michael McGrath who introduced this type of Bill last night of scaremongering while doing nothing ourselves? We cannot sit idly by any longer. This crisis is going to overwhelm us because action has been put off time after time. Deputy Noonan is as well aware as I am of the situation and that repossession cases are lining up for the courts. There is significant angst, anxiety, sickness and trauma. Indeed, it seems like terrorism from the institutions of State for people in this situation. Surely we can use CPOs or some other imaginative legislation to try to secure properties, especially from vulture funds which are not buying them at market value but trying to make a killing on them, whether vacant or otherwise.
We must think outside the box here. The Oireachtas Committee on Housing and Homelessness is discussing the problem and other groups are also trying to address the problem. What good will that do if the Oireachtas does not legislate imaginatively to create a new solution?
I did not accuse Deputy Michael McGrath of scaremongering but he may have mentioned that I was scaremongering.
The Minister did last night. I was here.
I think Deputy Mattie McGrath has reversed the dialogue. I have great respect for Deputy Michael McGrath and did not do that.
This is the first week the new Government is functioning. A special housing committee, chaired by Deputy John Curran, was set up in response to the emergency. I appeared before the committee and it seems to be that it is doing constructive work and moving quickly through its agenda. At the same time, Deputy Simon Coveney has been given special responsibility as Minister to resolve the housing crisis. He is moving as quickly as possible on that and one of the first Cabinet sub-committees to have been set up is the Cabinet Sub-Committee on Housing and Homelessness. This committee has met already and will meet again this coming Friday. There is a lot happening. Nobody has a monopoly on ideas to solve this problem. I do not contradict what Deputy McGrath has said but his ideas should be fed through the housing committee for analysis.
