Local authorities and housing organisations are facing a rent hike on hundreds of Nama-owned social housing properties in the coming months, documents show.
The houses, which were acquired by Nama from their debtors for use as social housing, are leased out to county and city councils, and housing groups known as approved housing bodies (AHBs). In total, the toxic loan agency has more than 1,300 social housing units leased in this manner.
Former Nama chairman Frank Daly, who retired in December last year, warned Minister for Finance Paschal Donohoe in October last year that upcoming rent reviews were "likely to impact the AHBs and local authorities", but not tenants, whose contribution to rents will not be affected. A briefing note prepared for Mr Donohoe said that the rent review clauses "could give rise to some commentary".
The rent reviews, which will trigger increases as they are indexed to ever-increasing rental indices, are beginning to fall due this year as Nama entered the first of the leases in 2014, and the rent reviews fall every six years under the lease agreements struck.
‘Cautious approval’
A spokesman for the department said the increased income from the Nama social housing units “will form part of the Nama surplus which will begin to return to the State later this year. Even with these index-linked increases, the rents in most cases will still be well below current market prices”.
Nama manages its social housing through a separate entity called National Asset Residential Property Services (Narps). Late in 2018, the agency was considering a sale of the social housing vehicle, according to separate briefing notes released last year under Freedom of Information laws.
They showed that “Nama had expected to bring Narps to the market later this year” and that Mr Donohoe had indicated “cautious approval” for this strategy, if it could be guaranteed that all the housing contained within Narps would be used for the same purpose into the future.
However, such guarantees could not be given, and therefore the Minister decided that Nama would retain ownership of the entity, and that it would be transferred to the State when Nama winds up next year “in order to protect the vehicle’s social housing mandate into the future”.
Allegations
The briefing notes contain lengthy sections on the investigation by the Comptroller and Auditor General into a Nama loan sale called Project Nantes. The sale of loans linked to boom-era property developer Derek Quinlan is under examination by the State's spending watchdog after allegations emerged that the loans were sold to a party connected to Mr Quinlan.
Former Independent TD Mick Wallace claimed in the Dáil that an ex-Quinlan executive, Mark Donnelly, was a director of the company which bought the loans at a discount of 92 per cent in 2012. Nama's legal review of the sale deemed it did not breach rules on sales to parties connected to loans, and the agency has staunchly defended the price achieved on the deal.
While the C&AG has finished its report, it remains unpublished, and the sections in the briefing notes for Mr Donohoe related to Project Nantes are redacted entirely. The final report was sent to Mr Donohoe at the end of December, and he is required to present its findings to the Dáil within three months of receiving it.
