Thursday 25 April 2019

'Bad bank' to take the lead in new homes plan

Cabinet considering new role for Nama as property developer

Nama chairman Frank Daly.
Nama chairman Frank Daly.

John Drennan and Ronald Quinlan

Talks are under way at the highest level within Government on a new plan that could see Nama being put in charge of delivering a massive house-building programme aimed at addressing the deepening housing crisis.

The Sunday Independent has learned that Taoiseach Enda Kenny has discussed the matter with Tanaiste Joan Burton, Finance Minister Michael Noonan and Public Spending Minister Brendan Howlin in the course of meetings of the powerful Economic Management Council.

The housing crisis and Nama's potential role in dealing with it has also been the subject of discussion at Cabinet in recent weeks.

Aside from the real and pressing need to deal with the severe shortage of family homes in Dublin and the Greater Dublin area, the Government is understood to be considering Nama's involvement on the basis of its ability to raise finance without adding to the national debt.

Commenting on the proposed new direction for Nama, a senior government source told the Sunday Independent: "We haven't been able to find a workable model to raise the finance for social housing. It's a plan that involves investment in the billions, which the Government cannot borrow.

"Now the light bulb is going off in everyone's head. Nama is available; and it's off balance sheet so the Europeans can't give out."

The source added: "It helps that Nama are credible in the foreign markets. They are seen as having run down Ireland's property debt very efficiently."

News of the high-level discussions comes just days after Nama chairman Frank Daly delivered a presentation on his agency's performance and potential future role to the Labour Party think-in in Wexford.

In the course of a question-and-answer session at the meeting, Mr Daly told Labour TDs and senators the agency could play a key role in addressing the current shortfall in housing if its remit were modified. As it now stood, Mr Daly said his agency expected to fulfil its current legislative remit by 2017.

One Labour TD noted: "He [Mr Daly] told the meeting that the construction of new housing was a major challenge that could be addressed, but that under current legislation he did not see how they could be diverted into the building of new housing units."

When asked if Nama could possibly be converted into a special purpose vehicle (SPV) for the construction of such units, another source said Mr Daly smiled before saying that this was not a matter for him to decide.

A source close to the Cabinet told the Sunday Independent: "These are clever boys. They [Nama] made a very nuanced pitch at the Labour think-in. It was quite the love affair. Labour used to be the great enemy of Nama. It looks like that's all over now."

The source added: "It's very simple, [Environment Minister] Alan Kelly wants the legacy of having solved the housing crisis. It's a case of get the cash, get the bulldozers in and get building. Nama appears to be the speediest way of getting there."

Sunday Independent

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