NYC Pension Funds Commit $300M to Union-Built Housing

Four New York City pension funds have committed $300 million to the AFL-CIO Housing Investment Trust, becoming the fund’s largest investor while expanding a long-running partnership focused on affordable and workforce housing.

The commitment is the largest allocation the city systems have made to the trust and forms part of Comptroller Mark Levine’s plan to invest $4 billion over four years in housing construction and preservation across New York City, according to the comptroller’s office.

The participating systems are the New York City Employees’ Retirement System, Teachers’ Retirement System, Police Pension Fund and Fire Pension Fund. Along with the Board of Education Retirement System, the city’s five pension systems oversee a combined $326 billion.

The Housing Investment Trust finances housing using 100% union construction, with an emphasis on affordable and workforce units. The new commitment is expected to help create or preserve approximately 10,000 homes during the next five years.

Since 2002, the city’s pension funds have invested a combined $583 million with the trust. Their partnership has already supported the construction or preservation of more than 40,000 units across New York City.

“This investment is a major step toward expanding our city’s crucial housing stock and tackling the rising cost of living,” Levine said. He described the commitment as both a pension investment and a source of housing and union employment.

The systems’ real estate portfolio totaled approximately $21 billion as of June 30 and returned an annualized 4.5%. Officials attributed improving results partly to increased multifamily and industrial exposure and a reduction in office holdings.

The pension systems reported a combined annualized investment return of 13%, underscoring the fiduciary framework surrounding the housing initiative.