Last year, Mr Noonan set Nama a target of building 20,000 homes, mainly in the greater Dublin area.
Now, in a letter released in response to a Freedom of Information request, Nama chairman Frank Daly and chief executive Brendan McDonagh have said achieving the 20,000 target “will require Nama to maintain and enhance its infrastructure and expertise”.
They said there are a number of major issues to be addressed if Nama is to help the Government meet its target to build new homes.
In their joint letter to the minister dated September 28, they said that one of the most important issues is staffing.
“If Nama is to undertake a major residential programme involving the construction of up to 20,000 units over the next five years, it must have the flexibility, in terms of remuneration, to retain and recruit the necessary expertise required to plan, fund and manage a programme of this scale across the organisation.
“Otherwise, there is a significant risk that it will lose expert staff to a recovering market. That would compromise its ability to fulfil any commitment that it makes at this stage in relation to this major economic and social initiative and, indeed, to the other strategic initiatives of deleveraging and the development of the Dublin Docklands SDZ,” they warned.
They also said “it will not be possible to deliver on the scale envisaged unless we secure the co-operation of a number of our existing major debtors, including, in particular, about 30 of these who are house builders”.
Mr Daly and Mr McDonagh also said that the agency would expect to utilise developers with no current involvement with Nama. The two stated that there is no doubt that the achievement of the delivery targets would be extremely challenging.
“The scale of the challenge is illustrated by the fact that Nama would need to have at least 100 sites concurrently active — there are about 40 sites active at present — and that it would need to deliver houses at an average run rate of 80 per week, or 4,000 per annum, compared to 30 per week, or 1,500 per annum, at present.”
Nama said its board considers it could commit funding for the development of sites capable of delivering 14,000 units before the end of 2020.
The letter added that “sites capable of delivering another 7,500 units appear to be commercially marginal to develop at current sales prices.
If these sites become commercially viable before 2020, Nama will commit funds to develop some or all of them.
In this way Nama would aim to reach or exceed by end 2020 the 20,000 unit target that you indicated.”
Mr Daly and Mr McDonagh said that “it will be necessary for Nama to review its output on an ongoing basis, taking into account the market’s absorption capacity and economic conditions generally”.
“If, for instance, mortgage availability were to act as a constraint on sales in the coming years and thereby leave us with substantial unsold stock, it would be necessary for us to reduce output pending recovery of the market’s capacity to absorb supply.
They also stated it is crucial sufficient resources are available in the planning authorities and An Bord Pleanála to deal with planning issues expeditiously.