New York City Comptroller Mark Levine, who oversees the city’s five pension systems, announced Thursday a $4 billion commitment to making strategic investments in affordable housing across the city’s five boroughs.
Over the next four years, the systems will commit $1 billion will annually for housing investments, including financing the commitment of new housing, preserving existing affordable housing, and supporting office-to-residential conversion. Pension capital will be used responsibly, according to the announcement, generating risk-adjusted returns while addressing the city’s housing shortage and affordability crisis.
The city’s five pension funds—whose investments are overseen by the Bureau of Asset Management and CIO Monte Tarbox—include the Teachers’ Retirement System of the City of New York, the New York City Employees’ Retirement System, the New York City Police Pension Fund, the New York City Fire Pension Fund and the New York City Board of Education Retirement System. Combined, the five systems managed $319 billion in assets, including an existing $2.8 billion invested in housing investments, which would more than double under the new initiative.
The average rent in New York City in April was $3,600 per month, according to data from Zillow, an increase of $128 from this time last year.
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“I think one of the things that’s very apparent through the last five years: [There is] a supply issue. When you build, housing gets more affordable,” Joshua Scoville, global head of research at Hines, told reporters in January. “New York has a housing shortage.”
According to data from Pew, the city’s housing stock increased by only 4% from 2010 to 2018, while jobs in the city increased by 22%. The city reported in early 2024 that vacancy rates had fallen to a historic low of 1.4%.
“Too many New Yorkers are struggling just to keep a roof over their heads,” Levine said in a statement. “Solving this crisis takes action on all fronts. We’ve advanced critical zoning changes, but without financing, housing doesn’t get built. 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 investments will be part of the comptroller’s economically targeted investments program, which aims to invest in underserved communities, including affordable housing. As part of the pension systems’ asset allocation policy, the city can invest up to 2% of its portfolio into these investments; however, only 1% is currently invested in ETIs.
“We’re only deployed now at 1%, so just going that extra percent[age point] gives us another $3 billion to invest,” Levine told CIO in an interview in February.
As part of the initiative, Levine will direct the Bureau of Asset Management to propose $750 million in investments in mixed-income affordable housing, office-to-housing conversions, and affordable housing preservation to the boards of the city’s pension funds for approval.
Additionally, the initiative will invest $500 million in the city’s Public Private Apartment Rehabilitation program, which would support the construction, preservation and rehabilitation of city housing.
The initiative would also recommend for approval additional investments in the AFL-CIO Housing Investment Trust to finance housing projects built with union labor.
Tags: affordable housing, Mark Levine, NYC Office of The Comptroller, Real Assets, Real Estate