New York Construction Report staff writer
A new $4-billion housing investment initiative is being launched in New York City to expand affordable housing production and preservation, using public pension capital to address financing gaps that officials say are slowing development amid the city’s housing crisis.
“Amidst the worst housing affordability crisis the city has ever seen, this plan will help expand supply of the housing that New Yorkers so desperately need, said City Comptroller Mark Levine.
The plan will tackle issue of financing new housing construction.
“Right now there are some housing projects, even affordable projects, which are stuck for up to four years in the pipeline, even when they have the property and the zoning and the developer waiting to go,” Levine said. “Sometimes the wait is so long that these projects die and that’s housing that’s never built.
“That’s unacceptable.”
The NYC Housing Investment Initiative will commit roughly $1 billion per year over the next four years to support mixed-income housing development, preserve existing affordable units, and accelerate office-to-residential conversions.
It will also direct pension capital toward projects intended to generate risk-adjusted returns while expanding the city’s housing supply.
“Solving this crisis takes action on all fronts. We’ve advanced critical zoning changes, but without financing, housing doesn’t get built,” Levine said. “The NYC Housing Investment Initiative is about closing that gap, delivering the homes New Yorkers need, and making sound investments for the New York City retirement systems.”
The Community Preservation Corporation will serve as program administrator and servicer. The expansion will also introduce updated financing terms, including a 36-month rate lock and 40-year amortization for eligible projects.
Additional investments are expected through the AFL-CIO Housing Investment Trust to support large-scale multifamily and affordable housing developments, including projects using union labour.
Supporters say pension-backed housing investment has long played a role in expanding supply while meeting return targets.
“Comptroller Levine’s $4 billion commitment represents a historic step in mobilizing the pension funds to address New York City’s housing crisis,” said Rafael E. Cestero. “This initiative sets a powerful model for how public capital can drive real impact by significantly expanding investment in the creation and preservation of our city’s housing stock.”
Labour leaders also backed the approach.
“For our members who have residency requirements, affordable housing is the single most important issue impacting their quality of life and ability to survive in this city,” said Henry A. Garrido, who also serves as a trustee of the NYCERS board. “We need to put our money where our values are, and that means investing our pension dollars into workforce housing that directly benefits the very people who make this city run.”
Since the early 1990s, pension-backed housing investments have helped create or preserve roughly 199,000 units of housing, according to the Comptroller’s Office, and have historically met or exceeded actuarial return expectations.
