Mr McDonagh’s name will likely be brought to Cabinet for approval in the coming days.
The news comes as the new figures showed the Government missed its social housing targets last year by more than 1,400.
A total of 10,595 social homes were added last year, which included 7,871 new-builds, 1,501 acquisitions and 1,223 homes through leasing programmes.
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Since 2009, Mr McDonagh has been the chief executive of the National Asset Management Agency, which was set up to deal with the non-performing loans of property developers after the banking and property collapse.
Prior to that he was the director of finance, technology and risk at the National Treasury Management Agency from 2002.
Heading up the new Strategic Housing Activation Office (SHAO), Mr McDonagh will be the so-called ‘fixer-in-chief’ of the new unit, which will be tasked with “kicking open doors” to activate housing delivery.
The new unit will be crucial to tackling the inertia around getting shovels in the ground, a government source said.
Speaking in an interview with the Sunday Independent earlier this year, Minister Browne said the activation office will be the “boots on the ground” and tasked with “troubleshooting”.
The office will be “looking into every single area where housing has not been delivered and ask why is it not happening and what do we have to do to rapidly sort delivery”, he said.
“It is not going to be another departmental office. It is going to be external. It’s going to be people who are experienced at kicking open those doors to get that delivery,” the minister said.
The SHAO will include key staff from utility providers who will be seconded full-time to work as part of the unit.
The office will also work closely with a new “accelerated infrastructure taskforce” which will be set up by Public Expenditure Minister Jack Chambers.
Like the SHAO, the taskforce will have experts from Uisce Éireann, Eirgrid, ESB and Transport Infrastructure Ireland (TII) seconded in to work on infrastructure delivery.
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