Editorial: ‘Time for a re-think as Nama is adding to housing woes’
Back in a very recent and very grim time, the then-government announced the creation of the National Assets Management Agency, or Nama as it is universally known. It began life in late 2009, described as “a bad bank” which would manage mainly unperforming loans on property suddenly worth a fraction of its original book value.
About one year later, Ireland’s economic woes were complete when the country was forced to surrender financial supervision to the dreaded Troika of the European Central Bank, EU Commission and the International Monetary Fund.
Nama was from the start, and remains to this day, the source of great controversy. Politicians and economists attacked the concept and business people castigated it and went to law against it.
But Nama defenders argue its success, which can be measured in terms of cash. Last summer, Nama chairman Frank Daly told the Oireachtas Finance Committee that the organisation is now in its final phase of activity ahead of a wind-up in 2020.
Mr Daly also expected Nama to hand over in excess of €3.5bn to State coffers by then. Given increasing property prices that surplus could be more.
And Nama has also built houses, some 8,000 units since 2014. The problem is that these houses are in the main rather dear, being well above the €300,000 ceiling deemed by housing experts as “affordable”.
That price tag is not plucked from thin air. It is closely related to what a young couple on decent but modest incomes would be allowed borrow under current stringent borrowing rules.
More worryingly, a significant proportion – almost 20pc – of Nama-built houses have gone to property investors.
The net result of all of this is that Nama is by now clearly part of our housing problem, even as it is getting on with its assigned task of maximising returns on disposing a crocked loan book. There are strong arguments that its function should have been modified back in 2014 when ambitious plans to provide more housing were first unveiled. But that was not done.
So, in concluding all that, we must remember Nama was set up to resolve the glut of property debt, not build social houses. But as an arm of the State apparatus, now hopelessly mired in a crisis of housing shortages and homelessness, it is very disconcerting to find Nama pulling against efforts to address the problems.
On that basis, it may be time to adjust Nama’s remit to ensure it is more in keeping with the ongoing efforts to grapple with our housing woes. These efforts have been slow to show results and every extra house counts.