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Sunday 30 April 2017

Bailed-out banks stymie social housing scheme

John Drennan

John Drennan

Banks that are waiting to be bailed out by Nama are refusing to co-operate with a major new government-backed re-housing scheme.

Under the proposal, the State and a mix of voluntary housing bodies are prepared to enter "long-term leasing arrangements'' involving over 2,500 houses that developers are unable to sell. The State would not purchase the houses but they would provide a guaranteed rent to the owners or developers.

But Fine Gael frontbench TD Fergus O'Dowd has told the Sunday Independent that the "social housing leasing initiative was being stymied by the refusal of the credit committees of certain banks to acquiesce in the scheme''.

In the first phase of the scheme, over 2,000 houses have been leased from struggling builders by local authorities and housing agencies.

But Mr O'Dowd said such has been the extent of the "road-blocking being put up by the banks'' to the current proposal to add a further 2,500 houses to the scheme the Department of Finance has been asked to intervene to resolve the impasse.

Mr O'Dowd said: "Given that these banks are being bailed out by the taxpayer it is astonishing they are failing to co-operate with a social housing scheme that is guaranteed by the State."

It is believed that one of the key factors behind the delay is that banks are hedging their bets to see if they can get a better deal under the Nama legislation.

But Mr O'Dowd said: "Banks cannot be allowed to postpone decisions in the hope that Nama will take these properties off them."

Significantly, given the prevalence of 'ghost estates', it is believed Housing Minister Michael Finneran also plans to include houses that "builders have not been able to finish off". Mr O'Dowd said: "The Government should name the banks that refuse to facilitate a State-backed scheme.''

Minister Finneran said his department was aware "a lot of these properties'' that the housing associations are anxious to acquire "are tied up in housing loans".

He added that the department was anxious to "engage with the banks as part of our long-term leasing scheme that will give such developments a long term income stream".

But Mr Finneran noted that while "his department did not wish to be over-critical of the banks, he was anxious for a higher level of engagement to take place than what was currently occurring".

Sunday Independent

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