The recent announcement by Comptroller Brad Lander regarding the NYC Employees’ Retirement System investing up to $60 million in affordable housing units has stirred up mixed emotions. While Lander emphasized the positive impact this investment would have on preserving over 35,000 units, there is still lingering skepticism due to the circumstances surrounding Signature Bank’s collapse. The initial fear of a potential disaster when Signature Bank closed last year highlighted the fragility of the financial system and the vulnerability of housing stock in the city.
One of the most significant concerns that arose from Signature Bank’s collapse was the fate of its housing stock. With the bank owning $15 billion of mortgages across four of New York’s five boroughs, the city and state officials were deeply concerned about the impact on rent-regulated housing. Tenant advocates had warned about Signature’s risky loans, given its ties to some of the worst landlords in the city. The move to preserve and maintain the affordability of these units was a crucial step in mitigating potential exploitation of tenants.
The involvement of the Community Preservation Corp. in taking over parts of Signature’s housing loan portfolio was a strategic move to secure and manage these assets effectively. By forming partnerships with organizations like investment manager Related Fund Management and nonprofit Neighborhood Restore Housing Development Fund Corp., the CPC created a platform for responsible management of nearly 35,000 affordable housing units. The link between public and private entities in ensuring the stability and affordability of these units sets a positive precedent for future investments in the housing sector.
The significance of the NYCERS’ $60 million investment in the Community Stabilization Partners venture cannot be understated. Not only does this partnership contribute to the preservation of affordable housing units, but it also signifies a shift towards responsible investing practices within the pension fund. The trustees of NYCERS, along with key stakeholders in the city, have recognized the importance of increasing investments in affordable housing to address the growing demand for such units. The strategic asset allocation adopted by the pension fund aims to maximize returns while upholding social and ethical responsibilities.
The commitment of trustees like Henry Garrido to balance financial success with social impact showcases a harmonious approach to managing the pension fund. By acknowledging the potential to “do well and do good at the same time,” stakeholders in the investment process are aligning their goals with the broader interests of the community. The emphasis on responsible investing and ethical considerations underscores a shift towards sustainable growth and community development.
The celebration of preserving affordable units and preventing them from falling into the wrong hands resonates with housing advocates and community leaders alike. The memories of past financial crises and foreclosures serve as a reminder of the importance of safeguarding housing stock for the well-being of residents. The investment in affordable housing units reflects a collective effort to learn from the mistakes of the past and pave the way for a more inclusive and sustainable future for all New Yorkers.