A 33-story mixed-income high-rise in Midtown Manhattan, with rents as low as $1,000 for one-bedroom apartments. A 30-unit apartment building in the Bronx for survivors of domestic violence who have struggled with homelessness. A Brooklyn building for formerly incarcerated women and their families.<\/p>\n
These are some of the affordable housing projects that have been financed in the past several years with money from New York City\u2019s public pension funds, which provide retirement benefits for the city\u2019s police officers, teachers, firefighters and more.<\/p>\n
Now, the funds are set to invest more than $4 billion in affordable developments over the next four years, the city comptroller, Mark Levine, will announce on Thursday.<\/p>\n
The significant infusion of money, which will more than double the funds\u2019 current real estate portfolio, could help build or rehabilitate thousands of homes in and around the city, Mr. Levine said.<\/p>\n
\u201cIt\u2019s a pretty dramatic expansion in investment of housing in New York City \u2014 far beyond what we\u2019ve been able to do historically,\u201d said Mr. Levine, who is the legal custodian of the funds.<\/p>\n
The city has five separate pension funds, totaling around $320 billion<\/a> in assets. In addition to investing in real estate across the city and around the world, the funds invest in stocks, bonds and private equity.<\/p>\n The $4 billion would help pay for mixed-income projects, conversions of offices to apartments, renovations to aging buildings and new middle-income apartments built by union workers, among other types of development.<\/p>\n Mr. Levine, a Democrat, said the city had made progress on getting new projects approved. The next step was figuring out how to pay for them.<\/p>\n \u201cThe big fight now is to actually get that housing built,\u201d he said. \u201cThat\u2019s going to require a dramatic increase in the financing available. This really is our No. 1 battle right now.\u201d<\/p>\n New York City remains one of the most expensive places to live in the United States. The median household of renters spent more than half of their annual income on rent, according to the city\u2019s most recent housing survey<\/a>, which was conducted in 2023. It is also incredibly difficult to find a rental apartment \u2014 the vacancy rate was 1.4 percent<\/a>, a 50-year low, the survey showed.<\/p>\n City officials in recent years have increasingly sought to remove barriers to development, either through zoning or government bureaucracy, to fight the housing shortage.<\/p>\n It has traditionally been harder to drum up investments for affordable housing, in part because tenants pay lower rents and investors are unlikely to receive returns as high as they would from market-rate projects.<\/p>\n That leaves many affordable developments in limbo for years, even if they have political support and regulatory approval.<\/p>\n Pension funds are essentially required to make investments that maximize income, making affordable developments an unlikely fit. But that might be changing. The Federal Reserve Bank of New York released the results of a survey in 2024 that found pension funds in recent years had increased investments<\/a> in affordable housing, in part because it could be more stable over the long term than market-rate housing.<\/p>\n Mr. Levine said he thought some affordable housing projects could be good investments.<\/p>\n \u201cWe believe there\u2019s a sweet spot where we can meet our investment goals and help a project through that might otherwise not get built,\u201d he said.<\/p>\n The $4 billion infusion in New York City will be split across three different types of investments. The boards of trustees for each pension fund will need to sign off.<\/p>\n In the first year, about $750 million will be invested in a variety of real estate projects, including housing for older people.<\/p>\n Another $500 million will be invested in the Public Private Apartment Rehabilitation Program, through which developers or building operators borrow money from the pension funds and pay it back at a fixed rate over 40 years.<\/p>\n Past projects that have gotten funding through the program include the building for domestic survivors in the Bronx, the Lily House, which opened last year<\/a>, and the building in Brooklyn for formerly incarcerated women, called the Rise<\/a>.<\/p>\n Rafael Cestero, the president and chief executive of the Community Preservation Corporation, a nonprofit that helped create the apartment rehabilitation program in the 1980s, said his group always had a pipeline of projects that could use more money.<\/p>\n \u201cThis expands access, creates more dollars in the system, to finance affordable housing,\u201d Mr. Cestero said.<\/p>\n The final portion of the pension fund investment will go to a fund, known as the A.F.L.-C.I.O. Housing Investment Trust, that specifically finances middle-income housing built and run by union employees.<\/p>\n