Comptroller Stringer, NYC Pension Funds Announce $450 Million Investment in Affordable Housing
October 5, 2017
NYC’s Pension Funds launch first-of-its-kind initiative that commits millions of dollars to support affordable housing for veterans
Comptroller’s Office and NYC Pension Funds reach new milestone of 100,000+ affordable units created and preserved through funded mortgages
(New York, NY) — Comptroller Scott M. Stringer and the New York City Pension Funds today announced a major new investment of $450 million to purchase and support non-predatory mortgages for everyday New Yorkers and support affordable housing across the five boroughs. In addition to stocks and bonds, Comptroller Stringer and the Pension Funds also invest in funds that finance affordable single-family homes as well as larger, multi-unit buildings in New York City. The investment of $450 million in pension funds will support and create tens of thousands of affordable homes and units citywide. The new investment includes a first-of-its-kind infusion of millions of dollars specifically to support veteran in New York City. Since the Comptroller’s Economically Targeted Investment program began, the Pension Funds have created or preserved over 100,000 affordable units citywide.
The $450 million will be invested through a separately managed account with RBC Global Asset Management’s Access Capital Community Investment Strategy, which invests in non-predatory, agency-backed mortgages from both private and government affordable housing programs, such as those run by a wide variety of federal, state, and city housing and economic development agencies. It includes a renewal of $300 million that had previously been invested and the addition of $150 million in new funds. The
initial agreement is for three years, with the option of two three-year extensions.
By purchasing and owning these tens of thousands of mortgages, the Pension Funds are making stable long-term investments while supplying the capital needed to make more affordable housing loans. This enables and encourages public and private lenders to issue more affordable housing mortgages and promotes lower interest rates that are more favorable to consumers.
Further, the Comptroller’s Office, in partnership with RBC GAM Access Capital, has created a first-of-its-kind program to support affordable housing for veterans in New York City. Each year at least $5 million will finance mortgages guaranteed by the Department of Veterans Affairs to veterans and their families living in New York City, with the goal of 10 percent of all capital invested through RBC GAM Access Capital going to these mortgages.
“We have to work together to make New York City more affordable – and we’re taking action in innovative ways through the Pension Funds. We’re demonstrating that you can simultaneously protect the retirements of hardworking New Yorkers while mitigating one of our city’s long-term challenges. This is undoubtedly a great thing,” New York City Comptroller Scott M. Stringer said. “We’re proud to have helped create and preserve over 100,000 affordable units citywide, and even more thrilled to launch a new effort to support our veterans. Through this initiative, we’re helping everyday families, adding long-term affordable housing, and strengthening our pension funds. This is going to have positive outcomes for many, many New Yorkers.”
The Comptroller’s Office expects investing in mortgages for veterans will encourage more banks to issue VA-backed mortgages, making it easier for veterans to obtain stable housing at better rates. Approximately 210,000 veterans live in New York City.
Since 2007, investments from the pension funds in the separately managed account with RBC GAM Access Capital have totaled $397 million — resulting in 1,887 affordable single-family homes in New York City — as well as $170 million invested in multi-family buildings that delivered 33,390 affordable units across the five boroughs. Historically, the separately managed account has made nearly half of single family home investments with New York City families making less than 80% of Area Median Income (AMI)— currently $77,000 a year for a family of four— and half with moderate and middle income families.
The investment in RBC GAM Access Capital is part of the Comptroller’s Office’s Economically Targeted Investments program, which seeks investments that deliver strong returns while also creating secondary benefits, such as affordable housing and good paying jobs. The Economically Targeted Investment program was launched in 1984, and currently the City Pension Funds have invested nearly $2.5 billion with an additional $500 million in future commitments. These investments have financed 105,000 units of affordable housing.
For information on the New York City Pension Funds’ Economically Targeted Investment program, click here.
“As stewards of our pension funds, we have both fiscal and moral responsibility, which means choosing investments that serve our communities and our pensioners,” said Public Advocate Letitia James. “Our service members put their lives on the line to protect us, and we must do all we can to support them. Too often, veterans face a myriad of obstacles upon returning to civilian life, including difficulty accessing affordable housing and home ownership. By expanding this program, we not only make loans more accessible to veterans and active service members, we are making good on our commitment to serve them, just as they have served us.”
“I’m proud to support this initiative, which will invest public pension dollars in a worthy cause,” said Manhattan Borough President Gale A. Brewer. “No veteran should be left struggling with housing insecurity after serving our country, and these mortgages are solid investments. I’m glad our pension funds can lead the way on this issue, and I hope this will serve as a signal to other banks encouraging more investments in non-predatory mortgages to provide housing to those who need it.”
“Today’s announcement by Comptroller Scott Stringer of a massive investment from the City in affordable housing, in particular his commitment to providing Veterans with increased opportunities to obtain affordable housing throughout the five boroughs, is welcome news. Our City’s Veterans answered the call to defend our nation abroad, leaving their families and their City behind them as they put their lives on the line every single day. Being able to assist them in obtaining affordable housing is a meaningful way we can help repay them for their sacrifice. On behalf of the UFA and all its members we applaud the Comptroller for this investment in our City’s Veterans,” Uniformed Firefighters Association President Gerard Fitzgerald said.
“Solving the affordable housing crisis requires innovative solutions and strong partnerships, and I commend the Comptroller for extending this important lifeline to our city’s veterans,” said New York City Department of Housing Preservation and Development (HPD) Commissioner Maria Torres-Springer. “Creating more opportunities for affordable homeownership, especially for those individuals who have sacrificed for our country, is a critical component of the Mayor’s housing plan. We look forward to our continued collaboration as we work to improve access to homeownership across the five boroughs.”
“The United War Veterans Council commends Comptroller Scott Stringer for his creative solution to a critical issue facing our veterans, affordable housing. This measure will benefit our communities because veterans are an asset to any neighborhood,” United War Veterans Council President Dan McSweeney said.
“Partnerships like this benefit both communities and investors. RBC Global Asset Management has been proudly serving the New York City Pension Fund as an investment manager for 10 years, and we are excited to build on our history of delivering double bottom line results,” said Ron Homer, co-founder of the Access Capital Community Investment Strategy and Managing Director of RBC GAM. “Our aim with the RBC GAM Access Capital Community Investment Strategy is to promote and facilitate the development of stronger communities through targeted fixed income investments, while also earning a competitive financial return.”
Comptroller Stringer serves as the investment advisor to, and custodian and a trustee of, the New York City Pension Funds. The New York City Pension Funds are composed of the New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund and the Board of Education Retirement System.
In addition to Comptroller Stringer, the New York City Pension Funds’ trustees are:
New York City Employees’ Retirement System: Mayor Bill de Blasio’s Representative, John Adler (Chair); New York City Public Advocate Letitia James; Borough Presidents: Gale Brewer (Manhattan), Melinda Katz (Queens), Eric Adams (Brooklyn), James Oddo (Staten Island), and Ruben Diaz, Jr. (Bronx); Henry Garrido , Executive Director, District Council 37, AFSCME; Tony Utano, President Transport Workers Union Local 100; Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.
Teachers’ Retirement System: Mayor Bill de Blasio’s Appointee, John Adler (Chair); Raymond Orlando, representing the Chairperson of the Panel for Educational Policy and Debra Penny, Thomas Brown and David Kazansky, all of the United Federation of Teachers.
New York City Police Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Finance Commissioner Jacques Jiha; New York City Police Commissioner James P. O’Neill (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Louis Turco, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.
New York City Fire Department Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Fire Commissioner Daniel A. Nigro (Chair); New York City Finance Commissioner Jacques Jiha; Gerard Fitzgerald, President, LeRoy McGinnis, Vice President, Edward Brown, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; John Farina, Captains’ Rep.; Paul Mannix, Chiefs’ Rep., and Jack Kielty, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Thomas Phelan, Marine Engineers Association.
Board of Education Retirement System: Schools Chancellor Carmen Fariña; Mayoral: Isaac Carmignani, T. Elzora Cleveland, Vanessa Leung, Gary Linnen, Lori Podvesker, Stephanie Soto, Benjamin Shuldiner, Miguelina Zorrilla-Aristy; Michael Kraft (Manhattan BP), Deborah Dillingham (Queens BP), Geneal Chacon (Bronx BP), April Chapman (Brooklyn BP), and Peter Calandrella (Staten Island BP); and employee members John Maderich of the IUOE Local 891 and Donald Nesbit of District Council 37, Local 372.