With over a hundred thousand households still in need of social housing the real priorities of the Government and state can be seen in the workings of NAMA. In an extraordinary scandal the state agency continues to fund bankrupted developers who specialise in luxury homes for Irelands wealthy. This coincides with a ‘tsunami’ of house repossessions as the housing crisis worsens for ordinary people
Thirty luxury five bedroom homes, each selling for over €1.5 million have been built in Howth by Cosgrave developers. The landscaped gardens alone cost €40,000 each. The Cosgrave Brothers had loans of over €500 million taken over by NAMA (i.e. paid for by the state’s citizens), yet the development was part funded by NAMA (i.e. us!).
When the property bubble burst in 2008, the Cosgrave brothers had built a property empire that included commercial property worth over €800 million in the UK. Like most of the politically connected developers they were happy to shift their loans to NAMA while simultaneously transferring some of their assets to wives and siblings in an effort to keep their wealth and avoid paying their loans should they be pursued or forced into receivership.
They need not have worried as NAMA looked after them. They continued to earn rent worth millions that was paid by the state for the use of offices in their Blanchardstown development even as they owed the state over $500 million. Now things are truly looking up for the Cosgrave’s and many of the very developers whose greed has left Ireland with the current housing crisis. The Cosgrave’s specialise in “up- market” developments and NAMA are very keen on this kind of housing. Sales of homes worth over a million have jumped to over 117 so far this year as the Irish rich see their wealth increase and “confidence” in the high end of the housing market returns.
In contrast NAMA has handed over a miserable 1,100 housing units for social housing to local authorities since 2012.The agency took control of over 15,000 housing units from failed developers and many more sites and unfinished units that could have been used to house the many people in chronic housing need. Another 5,000 homes offered by Nama were rejected by local councils because of their poor standard and location and a lack of willingness by Local Authorities to commit to social housing even at a time of unprecedented need. One report suggests that some houses offered by NAMA would require thousands of Euros to be spent to bring them up to acceptable standards. But Local Authorities will not be given the funding needed by the Government. The few social houses that NAMA have delivered tend to be small parts of larger developments that the agency has handed over to corporate landlords known as REITs (Real estate investment trusts). These vulture capital firms are making huge profits on the back of the housing crisis as NAMA sells them finished apartment and houses at knock down prices that they can then rent out or sell while paying no tax on their profits.
NAMA’ s remit is supposed to include supporting developments that are in the public interests, yet its slowness in providing significant social housing while bankrolling the very developers that caused the crash shows where its real class interests lie. It is a key part of an agenda that wants to see property prices rise again and has lavished loans and consultancy payments to a few dozen key developers. Its sale of property and land banks is shrouded in secrecy but as the scandal involving the sale of a portfolio worth €1.2 billion in the North shows the agency is enmeshed in dodgy deals that are proving hugely profitable to a well-connected political, legal, and property elite.