New York Comptroller John Liu said he wants to let the city’s public pension funds invest millions of dollars to finance or own housing for people displaced by Hurricane Sandy.
Liu, a 45-year-old Democrat who may run for mayor next year, said he intends to submit the proposal to board members of the city’s five pension funds, which held assets valued at $128 billion on Sept. 30. If they accept the plan, the specifics would be announced in the next few weeks, he said. The comptroller serves as custodian and investment adviser to the funds.
“Now that there is a huge need to rebuild tens of thousands of homes in the city, the use of the city’s pension funds as capital to accelerate these projects is going to be vitally necessary, and it can be done in a way that we gain a good return for our pensioners and taxpayers,” Liu said today after meeting in Manhattan with the Business and Labor Coalition of New York, a civic group.
Sandy, the biggest Atlantic storm on record, came ashore Oct. 29, pounding New York with winds of as much as 100 miles (160 kilometers) an hour, killing more than 40 city residents and flooding transit tunnels and underground utilities.
About 200 houses were destroyed or damaged beyond repair and 500 have structural problems so severe that they are temporarily uninhabitable, Mayor Michael Bloomberg said today in a speech to the League of Conservation Voters in Manhattan. The mayor, who is founder and majority owner of Bloomberg News parent Bloomberg LP, is barred from seeking a fourth term.
Aside from providing mortgage financing, Liu said retirement systems may own buildings as real estate investments. Pensions may also finance restoration of infrastructure and city properties damaged by the storm, he said.
“The pension funds earn returns on the interest paid on the financing, but there are also opportunities where we go beyond debt financing and actually look at equity ownership,” Liu said.
Liu’s proposal represents an expansion of a program the comptroller’s office has managed since the 1980s: City pension funds allocate 2 percent of their assets for so-called economically targeted investments that provide capital for projects in New York’s poor and working-class neighborhoods.
The funds provide retirement benefits for teachers, school administrators, police, firefighters and civil servants. Through the Public Private Apartment Rehabilitation Program, they have financed $757 million in preservation or new construction of 29,694 affordable apartments, according to the comptroller’s office. Almost $2 billion has been invested since the target-investment program began.
“Building efforts in the aftermath of Sandy will require much larger amounts of capital financing, and it’s money that can be part of the city pension funds’ economically targeted investments,” Liu said.
Funds representing civil-service workers, police, and teachers this year financed a $13 million, 30-year mortgage that enabled construction of Brooklyn apartments for the disabled
Another project, financed by the civil-service and police retirement plans, provided $19 million for a 30-year mortgage on a 1,231-unit affordable-housing apartment building in the Bronx, Liu said.