Fianna Fáil Finance spokesperson Michael McGrath has called for NAMA to take greater consideration of Ireland’s long term economic and social needs as it works through the remaining loans on its books.
Deputy McGrath pointed out that legislation underpinning NAMA’s establishment includes as one of its purposes ‘to contribute to the social and economic development of the State’.
Deputy McGrath stated, “I welcome the recent commitment by NAMA to deliver housing and high quality office space where they are most needed. However, we need to be acutely aware that, once NAMA sells on a portfolio of loans, it has no further influence over the future development of the assets attaching to those loans. We should be under no illusions as to the nature of many of the purchasers of NAMA loans. Vulture funds will typically take a short term outlook on their investments. While they may be in a position to make handsome returns by flipping assets they acquire this may not be consistent with the long term economic interests of the state.
“It is clear that NAMA is now under considerable pressure to dispose of its loan book as quickly as possible. There needs to be a debate as to whether or not this is the correct course of action for the country. With every passing day we see more and more reports of acute housing shortages particular in the Dublin region. We are also aware that many housing units that are available do not meet the needs of families. We need to learn the lessons of past mistakes and ensure that in future we do not repeat them. The array of sites over which NAMA has control gives the State an unprecedented opportunity to have a positive influence on the future economic and social development of the country, providing both affordable housing and appropriate infrastructure for families and communities.
“As it moves in to the final phase of its work I believe NAMA needs to take into account not just the price it is offered for a particular bundle of loans but also the nature of the prospective buyer and their long term intentions for the assets acquired. The highest bid in the short term for a portfolio of loans may not always be in the best long term interests of the citizens of the State. NAMA should be cognisant of the plans for a site that a potential investor may have.
“It was always envisaged that NAMA would deliver a social dividend as well as an economic return. It clearly has the funds, land and skills to have a major influence in these areas. We know from both the social housing waiting list and the acute shortage of high quality office space in certain areas that the Irish construction market is still not operating in an optimal manner. Through fully exploiting the resources of NAMA, the State can assist in addressing this market failure. This may mean getting involved in more partnership arrangements with long term investors than simply selling assets to the highest bidder. Ultimately this is likely to generate a far greater overall return for the taxpayer than that will come from selling to vulture funds.”