Plan to free up land to build homes for families squeezed out of market
Land taken over by the State during the banking crash will be freed up to build new homes as the Government seeks a solution to the country's property crisis.
Hard-pressed workers, including nurses, teachers, gardaí and specialists across the IT and financial sectors, are being priced out of the market in large parts of the country.
However, in a bid to tackle the escalating housing shortage, Finance Minister Michael Noonan intends to turn the State’s bad bank, Nama, into a housing development agency to deliver homes for families unable to purchase a property.
In a radical shake-up of Nama's role, it will be told to start building houses and releasing key sites in areas of high demand so that construction of new homes can begin.
Mr Noonan will include a package of measures on housing in next month's Budget – but he does not want to simply give tax breaks to developers.
Instead, he is focused on changing Nama’s remit from a debt management agency into a home builder – a move called for in many quarters, given the large tracts of land it controls and its access to finance.
Mr Noonan has indicated he will make Nama into a housing executive, charged with building both affordable housing for families, and social housing aimed at reducing council waiting lists.
The minister signalled his intentions at the recent Fine Gael parliamentary party 'think-in' where he told party members he hopes to overhaul the bad bank's mandate as part of concerted efforts to address the housing shortage before the General Election.
The Irish Independent has learned the move will involve Mr Noonan changing Nama's remit to give it more scope to develop homes, using its capital resources, land banks and relationship with developers.
Under the new proposals, Nama resources will be utilised to provide both social and affordable housing.
Similar to the manner in which it has identified property for commercial development and offices, it will now be told to find similar sites for housing in areas of high demand - in particular Dublin, Cork and Galway.
Yesterday, Mr Noonan briefed a group of potential investors in Ireland who asked about Government policy in relation to the property crisis.
In response, he said he was looking at Nama to see if proposals could be developed to resolve the issue.
"By creating a bit of competition, it would kick-start the market again," one source said.
"He wants to do it without going down the route of tax breaks for developers. So it's about freeing up land. It's about making more affordable housing available for first-time buyers, particularly around Dublin.
"What Noonan is proposing is changing the mandate so they have to build housing. They currently only have to supply housing to local authorities."
The Government is also continuing to look at planning regulations amid complaints that the planning phase is taking up too much time.
Officials in the departments of Finance, Public Expenditure and Environment are closely examining the issue ahead of the Budget, with a focus on quicker delivery of housing.
Among Nama's objectives is to contribute to the wider social and economic development of the economy, which includes a responsibility to provide land and property, including houses.
The agency has previously said it will deliver 1,500 residential units this year, and another 2,000 in 2016.
However, it has recently emerged that while it has sold residential land sufficient to build 11,000 new units, just 700 have been delivered.
The move to involve Nama comes after the Ireland Strategic Investment Fund, which is part of the National Treasury Management Agency, said it would provide €500m in home-building finance to developers to help deliver 11,000 new units.
Global investment fund KKR Credit will contribute €175m of the amount, which will be directed at developers building medium- or large-scale housing developments.
The move to change Nama's remit is among a number of proposals being considered by Government.
The Labour Party wants €170m for roads and water.
'Lot of cash'
Minister for Health, Leo Varadkar, commented this morning and said the agency has significant land banks and “a lot of cash”.
“It is one of the things under consideration. This government only has another few months left in office but we would hope to continue into a second term,” he said.
“No matter who is in power in the next couple of years, housing is going to become a real issue because really for seven or eight years almost no houses were built either by the government or the private sector because of the recession. So there is a big job to catch up on that and have a sustainable and adequate supply of housing.
“So one of the things that’s under consideration - and it’s only under consideration - at this stage is using Nama to build housing, and Nama has significant land banks and it also has a lot of cash as well. So it’s an option that’s under consideration.”