Five New York City pension funds are investing in the city’s affordable housing sector.
The New York City Employees’ Retirement System, the Teachers’ Retirement System of the City of New York, New York City Police Fund Subchapter Two, New York City Fire Department Pension Fund Subchapter Two and the New York City Board of Education Retirement System have committed $150m (€132m) to the AFL-CIO Housing Investment Trust.
Capital will be used to build housing units.
Including the latest allocation, $788m of investments have been made in the HIT.
Returns on previous investments with HIT have beaten the Barclay’s AGG Benchmark across all of time periods.
The most recent time period generated a net return of 3.33%, which beat the benchmark by 51 basis points.
The latest investment – part of an existing relationship the five retirement systems have with the HIT, is part of the group’s Economically Targeted Investments programme that generates risk-adjusted market rates of returns, while providing economic development within the five boroughs of New York City.
Scott Stringer, New York City comptroller, said: “When it comes to promoting affordable housing and generating new jobs in our city, Economically Targeted Investments are a crucially important tool, and working with the HIT is a fiscally smart marriage of resources and housing policy.”
The HIT is expanding its efforts in New York City.
Over the next seven years, it aims to preserve the affordability of 12,500-15,000 housing units and construct 5,000-7,500 housing units.
Steven Coyle, chief executive at the HIT, said: “The HIT has invested union and public pension funds to provide market returns, while increasing the supply of affordable housing and creating union jobs across the country.
“This new investment will help us continue our substantial work in New York City.”