Nama promises over 2,000 properties for social housing

Gnasher1970

http://www.irishtimes.com/newspaper/breaking/2011/1221/breaking45.html

If 2,000 properties is 20%, then 10,000 properties is 100%.

If they paid €31 billion for loans relating to 10,000 properties, then that works out at €3.1 million per property – with the original valuation of the loans being €7.2 million. When, even in 2006, was the average value of a property €7.2 million, or even €3.1 million?

Now, maybe there are 100,000 unfinished properties, or something, to explain the gap. However, we’ve been told in other coverage that the bulk of ghost estates have nothing to do with Nama – presumably the lenders were non-Irish banks or the loans were too small to transfer. We don’t know, because our journalists are pretty useless.

Or maybe the figures are just plain wrong. Well, clearly the figures are just plain wrong. But the main point is a glaring gap in information is presented without comment. Is the contention that Nama reckoned the average value of a residential property was €3.1 million? Or is €31 billion what Name paid for all its loans, only a small fraction of which relate to residential property?

BornToKill

That's just the residential portfolio. It fails to take account of the commercial property and all the other bits and pieces.

hmmm

Have they announced which estates and apartment blocks full of negative equity homeowners will be welcoming these new recipients of free houses? I wouldn't be in a rush to buy a property in any NAMA estate knowing that my neighbours could be social housing - not after my experience living alongside other recipients.

Between Priory Hall, NAMA holding back thousands of properties and now vague promises of future social housing, no-one in power seems to have the slightest understanding that all this uncertainty is killing the property market.

thebman

hmmm wrote: »

Have they announced which estates and apartment blocks full of negative equity homeowners will be welcoming these new recipients of free houses? I wouldn't be in a rush to buy a property in any NAMA estate knowing that my neighbours could be social housing - not after my experience living alongside other recipients.

Between Priory Hall, NAMA holding back thousands of properties and now vague promises of future social housing, no-one in power seems to have the slightest understanding that all this uncertainty is killing the property market.

It might be making it slightly worse, maybe but the property market has so many other issues that I wouldn't rank it too highly in the list.

If the people in the property market worked on fixing that buying a property in this country is about the only thing you can do that is more dodgy than buying a car then maybe people might believe anything they say about the market. At the moment, it is home of the snake oil salesmen and people who think ethic are something that holds you back in business.

mikemac1

hmmm wrote: »

Have they announced which estates and apartment blocks full of negative equity homeowners will be welcoming these new recipients of free houses? I wouldn't be in a rush to buy a property in any NAMA estate knowing that my neighbours could be social housing - not after my experience living alongside other recipients.

It was already in place though, happy to be corrected
Wasn't there something called Section V where the twenty per cent was allocated to the local authority.

The developer had the option to buy their way out of this and cash hungry councils often took the money instead of the housing.

But anyway, it's not new for buyers to settle in a new estate that has a section allocated to social housing.
Sometimes they are in one block and in a corner of the estate but not always

I seem to remember uproar about some fancy estate in Dublin called The Grange and people giving out that the council was going to allocate people from the housing list there
I forget what happened in the end but it was big news at the time

EDIT: Went looking to see what happened

WHEN they first came on the market in 2005, apartments at the Grange in the fashionable south Dublin suburb of Stillorgan offered location, luxury and lifestyle to rival anything found in Paris or New York.

Boasting a 24-hour concierge service to take care of matters such as dry cleaning, ironing, or ordering a taxi, the Grange promised an exotic lifestyle for residents of the development near Stillorgan in south Dublin. With prices for one-bed apartments starting at €435,000 and €575,000 for two-bedroom units, the mortgage payments alone were enough to put paid to the dreams of many.

Three years on, some of those who once had their noses pressed against the polished windows are daring to dream again.

But in the cruelest of ironies for those who secured an expensive foothold at the Grange at the height of the boom, it is the fallout from the bust that will let their new -- and poorer -- neighbours in.

Having failed in their legal challenge to prevent the imposition of Part V of the 2000 Planning Act which insists that 20 per cent of any development must be devoted to social and affordable housing, the Grange's developer, Glenkerrin Homes, have agreed to sell 75 apartments to Dun Laoghaire-Rathdown County Council at a massive discount. The Sunday Independent understands 38 of these units will be placed on the market by the developer under the terms of the Affordable Housing scheme with prices ranging between €213,755 and €305,000 depending on the size of the apartment. All apartments will come with one parking space included in the price.

While the cut-price apartment offer may well upset those Grange residents who paid through the nose for their homes they will at least console themselves with the knowledge that their prospective neighbours are contributing to the economy, as mortgages will have to be taken out on these units. Under the terms of the scheme, anyone earning up to €58,000 as a single person is entitled to apply. For couples submitting a joint application, the income limit is €75,000.

The Council's plans for the 37 other units it intends to purchase at the exclusive development will be reserved for social housing . According to a spokesperson for Dun Laoghaire-Rathdown County Council, these units will be used "for the purpose of providing rental accommodation to persons on the council's social housing list". The Sunday Independent understands that a number of residents -- many of whom paid in excess of €620,000 for their homes in 2006 have contacted Glenkerrin Homes to express their anger at the news of the impending arrival of social and affordable housing.

A journalist should do a follow up story to see what's the situation today

n97 mini

mikemac1 wrote: »

A journalist should do a follow up story to see what's the situation today

Anyone who bought "affordable" housing back in 2006 is looking at negative equity now.

Also, there seems to be some confusion between affordable housing and local authority housing.

FreudianSlippers

I actually think this would be a good "write off" move by NAMA. Sure, the books wouldn't look as positive when viewed alone, but since NAMA is the government and the government needs to build more social housing, simply cancelling the two out and using NAMA-fied residential properties as new social housing is win-win IMO.

johnnyskeleton

FreudianSlippers wrote: »

I actually think this would be a good "write off" move by NAMA. Sure, the books wouldn't look as positive when viewed alone, but since NAMA is the government and the government needs to build more social housing, simply cancelling the two out and using NAMA-fied residential properties as new social housing is win-win IMO.

But what price do they pay? Since it is one part of the government paying another part, they can pay however much or however little they can agree upon. So they can pay 2006 prices and NAMA posts a 100% profit and the politicians claim that they have successfully changed NAMA to make a profit. Similarly, they can sell them to the local authorities for nominal amounts and NAMA posts a massive loss ("look at the millstone the last government have hung around our necks" etc").

More interestingly, NAMA has promised certain developers a % of the profits over the amount NAMA paid for their loans. So if a block of 100 apartment blocks sells for €20m and NAMA paid €15m for the loans, part of the €5m will be diverted to these developers for "successfully" negotiating a higher price with the local authorities. Similarly since NAMA is a private SPV any ultimate profit will be shared among the investors in it, and AFAIK it was never entirely clarified whether these investors were just the banks and DOF or if there were others involved in it.

On the other hand, if they sold them below or at what NAMA paid or at a nominal value, then I suspect these groups would be up in arms demanding the share of the profits that they are so obviously entitled to, and the government will probably pay them for their silence.

So in the end, dumping these houses as social houses seems unworkable to me, given the nature of NAMA and how it is run.

Moreover, I suspect that these houses won't actually be used because people who receive social housing often reject houses that don't "suit their needs". Meanwhile, people with cash money looking to buy a house are not offered the chance to buy somewhere because NAMA would rather give the houses away (at taxpayer's expense) rather than sell them for less than what they are worth.

So it has "yet another fiasco" written all over it.

mistermouse

Looks like another mess waiting to happen.

Along with Rent Supplements I think the whole Social Housing thing needs review. Its been open to political involvement for years and doesn't represent great value to the tax payer in any case.

The whole NAMA involvement will most likely be a disaster. Interestingly a lot of the smaller ghost estates in Ireland belong to developers who were not big enough to be included in Nama

FreudianSlippers

johnnyskeleton wrote: »

But what price do they pay? Since it is one part of the government paying another part, they can pay however much or however little they can agree upon. So they can pay 2006 prices and NAMA posts a 100% profit and the politicians claim that they have successfully changed NAMA to make a profit. Similarly, they can sell them to the local authorities for nominal amounts and NAMA posts a massive loss ("look at the millstone the last government have hung around our necks" etc").

More interestingly, NAMA has promised certain developers a % of the profits over the amount NAMA paid for their loans. So if a block of 100 apartment blocks sells for €20m and NAMA paid €15m for the loans, part of the €5m will be diverted to these developers for "successfully" negotiating a higher price with the local authorities. Similarly since NAMA is a private SPV any ultimate profit will be shared among the investors in it, and AFAIK it was never entirely clarified whether these investors were just the banks and DOF or if there were others involved in it.

On the other hand, if they sold them below or at what NAMA paid or at a nominal value, then I suspect these groups would be up in arms demanding the share of the profits that they are so obviously entitled to, and the government will probably pay them for their silence.

So in the end, dumping these houses as social houses seems unworkable to me, given the nature of NAMA and how it is run.

Moreover, I suspect that these houses won't actually be used because people who receive social housing often reject houses that don't "suit their needs". Meanwhile, people with cash money looking to buy a house are not offered the chance to buy somewhere because NAMA would rather give the houses away (at taxpayer's expense) rather than sell them for less than what they are worth.

So it has "yet another fiasco" written all over it.

Excellent point, I was alluding as well to the negative sheet aspect of selling them cheap, but didn't expand the full picture.