Home truths: Viewed in rose tint Nama-rama
As the housing crisis deepens, the lynchpin "solution" contained in this week's Budget was Minister Noonan's promise that Nama would deliver 20,000 new homes by 2020 - for the most part starter houses, and almost all in the Greater Dublin Area (GDA).
Any more homes at all are of course welcome if they are delivered in the right places, but as construction chiefs and housing groups pointed out, this commitment amounts to 4,000 homes a year when Dublin alone needs more than 10,000.
The Budget announcement also follows data published last week by Savills suggesting that Dublin's population is growing much faster than expected. The international agency's research department says recent CSO data suggests a growth of 32,000 per annum - two and a half times faster than previously thought.
Savills believes the acceleration will raise the annual building requirement for the GDA to almost 13,000. To put the current rollout in context, it looks like we will end up with around 3,000 new homes in the GDA for this year with not much more expected to get underway in 2016.
Overall, Minister Noonan's Budget has no aggressive and determined measures required to truly address the housing crisis and get construction moving. These might have included limited incentives to the construction sector to reduce costs and get marginally-viable schemes moving.
There was no hospitality sector-style cut in VAT, no measures to address high local authority levies which are preventing construction (thus not actually making any money for local authorities). There was no announcement of a big national house building drive for social housing. As a result, groups from both sides of the housing divide - housing associations, charities and builders - described Budget 2016 as a "missed opportunity".
Even the Nama promise of 20,000 dwellings in five years comes laden with 'what ifs'. The language of a Nama statement which followed the Budget announcement was borderline reluctant in tone and made it crystal clear that just 16,000 of these promised home starts were actually commercially viable.
It says the other 4,000 will require "measures" to make them possible. The perception is that "measures" means the cost of basic but expensive infrastructure. What Nama is saying is that someone else will have to come up with the millions needed for water, electric, gas and road infrastructure or the additional 4,000 homes won't be going ahead. Where exactly the money will come from to render these schemes thus "viable" remains unanswered.
Therefore it is reasonable to assume that only four fifths of the promised homes are truly guaranteed as it stands.
And then we can cut that remaining 16,000 "new" homes down again by another 2,000 because Nama has already been rolling out homes in accordance to a previous commitment to deliver 4,500 properties by the end of 2016.
It emerges the bad bank has already provided 2,000 of these promised dwellings. Another 500 may or may not be completed by the end of the year. At best, therefore, at least 2,000 remaining homes on Nama's previous list are due to be finished next year. This batch of 2,000 previously promised homes also happens to be included in Mr Noonan's tally. So if we're talking about what's really "new" in the Budget/Nama promise, well now we're now down to 14,000 truly "new" homes.
The next matter we need to consider about the 20,000 pledge is just how many of those Budget promised homes were going to be built by Nama anyway. It was unlikely to cut its current pace of 2,250 homes a year so we can subtract another 10,000 homes from that tally - taking us to 4,000 truly "new" homes.
The bad bank isn't building homes out of the goodness of its heart, but rather because this is the most profitable option for the sites it is handling. Finished homes make more cash than bereft half-done sites.
The supremely well-funded Nama is making a packet building homes at a time when so many other developers can't get finance. Its new homes are a rare commodity in a starved market for low priced semis in particular. Nama's homes will fetch higher prices so long as so many builders can't get credit and aren't building. This also suits the finance minister.
When others start building again in numbers as the economy improves, Nama makes less profit. So not only was Nama unlikely to stop building houses at its current pace by the end of 2016, it would have always been in Nama's interest to increase its pace of its output rapidly and sell the homes at high prices before other builders get back on the job.
Most of Nama's active sites are ones which were getting underway before the crash kicked in. Surely all were going ahead anyway? But 20,000? It just sounds so dang tooting doesn't it?