Nama's bid to blame land buyers for housing crisis is a bit detached
Nama chief executive Brendan McDonagh's revelation that just 3,000 homes are under construction on land sold by the agency, despite its capacity to accommodate 50,000 units is, he contends, evidence that speculators are holding on to sites without building on them.
It's a shocking statistic. But it shouldn't come as a shock or even a surprise to Mr McDonagh or his officials to find that land is being hoarded in the expectation that it will increase in value. Nama has known this for at least a year.
A closer examination of the numbers shows that some of the most serious cases of alleged land hoarding have their origins in the development land sales Nama engaged in between 2014 and 2016 - a period in which the gravity of the housing crisis became abundantly clear to everyone.
In April of last year, Nama's head of public affairs Martin Whelan let the proverbial cat out of the bag when he revealed to a housing forum convened by the then environment minister Alan Kelly that Nama had sold land with the potential to deliver 20,500 new homes in Dublin, its commuter counties, and the country's other major cities since 2014 alone. Ironically, Mr Whelan provided the figures to the meeting in an effort to counter claims that Nama itself was engaged in hoarding land where housing was needed most.
Asked at the time for a detailed breakdown of the sites' locations, a spokesman for Nama confirmed that they are all to be found where the need for housing is most acute. "Approximately 9,000 of the potential new residential units are in Dublin, 7,000 are in the neighbouring counties of Wicklow, Kildare, Meath and Louth, 3,000 are in Cork, and the remainder are in the other major urban centres, including Waterford, Limerick and Galway."
Asked how many of the 20,500 were being built, Nama's spokesman disclosed that just 1,100 were being developed, with 900 of these in Dublin and the remaining 200 in Kildare.
While Mr McDonagh is entitled to draw the public's attention to the reluctance of the lands' new owners to build housing, he should bear in mind that the private equity giants and other investors Nama sold to are under no obligation to do so. Developer Michael O'Flynn, for his part, believes Nama should have included a development clause, making the building of housing a condition of the land sales Nama engaged in with investors.
Speaking to the Irish Independent, he criticised Nama for its failure, as he sees it, to anticipate the strategy purchasers of its development land might follow in the absence of such a clause.
He said: "Nama sold land to people who either overpaid for it or who are not interested in developing it for now. But that's their right as purchasers. People who buy land don't have to develop it. People can do what they like with land when they buy it. Unfortunately, Nama didn't sell land with a development clause, which is what a lot of land in public ownership should be sold with. Because it didn't do that, a lot of the land sold to investor funds isn't being developed."
With no such condition attached, outgoing Finance Minister Michael Noonan's announcement of the Government's plan to introduce a levy on vacant sites "in the context of next year's budget" to force land owners to build on or sell the sites they control seems just a little desperate. Needless to say, the Government still has to work out the details of how it might impose the charge.