NAMA has been in the headlines once again in recent days following the launch of the Dublin Docklands Strategic Development Zone (SDZ) last Wednesday and two high profile development projects being released. We’ve written about the background to the SDZ here and here. But with all the talk of office development and international funds buying up assets, what happened to the prospect of a social dividend from NAMA? Four years down the line and there has been precious little by way of anything resembling some kind of social, cultural or public benefit from NAMA’s operations.
Given the complexity of NAMA, any discussion of a potential social dividend has been somewhat confused and marred by a lack of clarity about what the practical possibilities for such a dividend might be. This post looks at these issues, pointing out what could be done and how.
The existing set up
As things stand, the workings of NAMA are governed by the National Asset Management Agency Act (2009). The Act focuses almost exclusively on the objective of saving the banks by acquiring their toxic real estate assets, with little provision made for NAMA’s impact on urban development. And yet, there are possibilities for a more holistic approach to urban development even within the existing set up. First of all, the NAMA legislation stipulates that the Agency have regard to ‘good planning’. Thus far, however, NAMA’s interpretation of what that means in practice has been very limited. The clearest example of this is NAMA’s submissions to the An Bord Pleanala hearing process on the SDZ itself. NAMA was involved in three submissions, each of which echo familiar private sector, pro-development interests. The submissions called for greater ‘flexibility’ a less ‘prescriptive’ approach to planning and ‘intensive development’ in the Docklands planning scheme. Such an approach does not correspond to international best practice in planning which emphasizes the limitations of a purely physical development approach to planning as well as the importance of the social and economic dimensions of planning. Were NAMA to adopt an interpretation of good planning along these lines it would go some way to the delivery of a social dividend. If that doesn’t happen, and there is nothing to suggest it will, the Minster for Finance can issue directives to NAMA to force its hand.
A further issue relates to the role of receivers. NAMA properties are not owned or managed by the agency itself, it appoints receivers firms to undertake these tasks. Several tenants and former tenants of NAMA held buildings have told us how NAMA refuses to engage with them, arguing instead that the receiver is in charge of the building. This has served as something of a shield obscuring NAMA’s responsibility for its impact on urban space. However, the Minster for Finance, again making use of his power to issue directives under the NAMA Act, could direct NAMA to favour receivers who show regard for good planning in the sense outlined above.
Changing the legislation
In addition to the above, however, getting the most out of NAMA for our city requires a change in legislation. Lessons can be drawn here from the Resolution Trust Corporation, a US agency along the lines of NAMA set up following the financial and property crash of the late 1980s. The RTC’s legislation included ‘supporting affordable housing’ as an objective of the agency. This meant that the RTC could not simply flog assets to the highest bidder with no regard for the needs of city-dwellers. A similar clause could be written into the NAMA Act, and even expanded to include support for social and cultural projects as well as affordable housing.
The solutions are relatively straight forward; the real problem is lack of political will. The government are anxious to get NAMA over the line as quickly as possible and are far more concerned with rebooting the property market – as indicated by the construction 2020 strategy – than they are with rethinking urban development. If the last decades have taught us anything, it should be that viewing property as a purely financial asset is a failed model. It has failed in terms of sustainable and socially just urban development, but the property crash shows it has also failed in its own purely economic terms. What is needed is public and political pressure that puts the city and its inhabitants first.