The New York City Retirement Systems will invest $150 million of pension capital in the AFL-CIO Housing Investment Trust for affordable housing initiatives, city Comptroller Scott Stringer said Thursday.
The expenditure is part of a $1 billion strategy by HIT, a fixed-income investment company, to build and sustain such housing across the five boroughs using all-union labor.
“The New York City Retirement Systems have a long and proud history of participating in economically targeted investments,” Stringer said during a news conference at the School of Visual Arts Theatre in Manhattan’s Chelsea neighborhood.
He said the investments have produced a 5.69% return as of July 31. The funds earmark 2% of their portfolio to economically targeted investments, or ETIs. He called the latest move “a smart marriage of resources and housing policy.”
HIT wants to create or sustain 20,000 affordable housing units over the next seven years.
“As we like to say, [$1 billion] is real money,” said HIT chief executive Stephen Coyle. “It may take more than that, but we’re committed to doing it.”
The city’s primary employee pension funds are the New York City Employees’ Retirement System, the Teachers’ Retirement System of the City of New York, the New York City Police Pension Fund Subchapter 2 (police), the New York City Fire Department Pension Fund Subchapter Two (fire) and the New York City Board of Education Retirement System.
Each pension fund is financially independent and has its own board of trustees. Stringer, as comptroller, is custodian and investment advisor to all five boards.
HIT said its commitment should result in $2.6 billion in total economic benefit to the city, 14,700 total jobs across industries and $1 billion in personal income, including wages and benefits.
“The commitment could not come at a better time,” said HIT chairman and former New York lieutenant governor Richard Ravitch.
HIT devised its strategy after discussions with key stakeholders, including Stringer’s staff, developers, labor leaders, government officials and community groups.
“People are being pushed out of the city, but the way we fight back is through smart investments,” said city Public Advocate Letitia James.
The strategy includes preserving 12,500 to 15,000 units at Mitchell-Lama and Limited Dividend developments, built between 1928 and 1978; financing the construction of 5,000 to 7,500 housing units under a partnership with the nonprofit United Clergy Task Force; and a program to finance New York City Housing Authority modernization work.
NYCHA received Federal Emergency Management Agency funding to repair and protect properties damaged by Hurricane Sandy from additional flood destruction.
The agency, though, needs additional capital to make critical repairs to its 30- to 70-year old buildings.
