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.
These are some of the affordable housing projects that have been financed in the past several years with money from New York City’s public pension funds, which provide retirement benefits for the city’s police officers, teachers, firefighters and more.
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.
The significant infusion of money, which will more than double the funds’ current real estate portfolio, could help build or rehabilitate thousands of homes in and around the city, Mr. Levine said.
“It’s a pretty dramatic expansion in investment of housing in New York City — far beyond what we’ve been able to do historically,” said Mr. Levine, who is the legal custodian of the funds.
The city has five separate pension funds, totaling around $320 billion 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.
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.
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.
“The big fight now is to actually get that housing built,” he said. “That’s going to require a dramatic increase in the financing available. This really is our No. 1 battle right now.”
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’s most recent housing survey, which was conducted in 2023. It is also incredibly difficult to find a rental apartment — the vacancy rate was 1.4 percent, a 50-year low, the survey showed.
City officials in recent years have increasingly sought to remove barriers to development, either through zoning or government bureaucracy, to fight the housing shortage.
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.
That leaves many affordable developments in limbo for years, even if they have political support and regulatory approval.
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 in affordable housing, in part because it could be more stable over the long term than market-rate housing.
Mr. Levine said he thought some affordable housing projects could be good investments.
“We believe there’s a sweet spot where we can meet our investment goals and help a project through that might otherwise not get built,” he said.
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.
In the first year, about $750 million will be invested in a variety of real estate projects, including housing for older people.
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.
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, and the building in Brooklyn for formerly incarcerated women, called the Rise.
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.
“This expands access, creates more dollars in the system, to finance affordable housing,” Mr. Cestero said.
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.
The trust has invested in a number of New York City developments, including the Ellery in Midtown, which has 330 apartments, a quarter of which are restricted to people with lower and middle incomes. The asking rents on market-rate one-bedroom units in the building are more than $6,000, compared with between $1,000 and $3,500 for the income-restricted units.
Henry Garrido, the executive director of District Council 37, the city’s largest union of municipal workers, described the investments as an example of how to “do good and do well at the same time.”
Mr. Garrido, a trustee on the board of the New York City Employees’ Retirement System, one of the pension funds, said middle-income housing — sometimes called “work force housing” — was particularly attractive to his union’s members.
“I think it’s a win-win situation,” he said. “A win for the workers, a win for the employees and a win for the pension as well.”
Mihir Zaveri covers housing in the New York City region for The Times.
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