Part of 10-Year Initiative by HIT and NYC Retirement Systems to Support Workforce Housing
NEW YORK, Nov. 14, 2012 /PRNewswire-USNewswire/ -- The AFL-CIO Housing Investment Trust (HIT) today announced a $49 million investment of pension capital in Electchester Housing Companies, a 2500 unit housing complex in Queens. The funds will enable the union-developed cooperative to maintain its affordability for working families as well as complete capital improvements to update the property's physical condition.
The investment is part of a 10-year initiative by the HIT and the New York City Retirement Systems to increase affordable and workforce housing in the City. "Electchester is the latest of 35 developments where the HIT has invested union and public pension funds into the preservation or construction of affordable housing," said New York City Comptroller John C. Liu. "The New York City Pension Funds' $600 million investment in the HIT has earned a competitive return while helping to obtain these significant benefits for thousands of hardworking and retired New Yorkers."
The Joint Industry Board of the Electrical Industry, a long-time participant in the HIT, developed Electchester more than 50 years ago as housing for members of Local 3 of the International Brotherhood of Electrical Workers (IBEW). Today a majority of the co-op's residents still have strong IBEW ties.
Electchester's leadership sought out the HIT because they knew of its expertise in financing affordable housing for New York's working families. "The use of pension capital to revitalize the Electchester Housing Companies fits well with the pro-active philosophy of IBEW Local Union No. 3," said the union's Business Manager, Christopher Erikson. "I am pleased that we are able to find innovative ways of raising the standard of living in the community."
The Electchester Housing Companies will use the HIT investment to help restructure existing financing and to provide capital for needed improvements that will meet York City's Green Building Code. The savings will help reduce operating costs for the five cooperatives that comprise the Electchester community. All of the rehabilitation work at the 38-building project will be performed by members of the building and construction trades unions.
Chang Suh, HIT Executive Vice President and Chief Portfolio Manager, called the financing "a sound investment for our portfolio, first and foremost, while it also advances our shared housing goals here in New York." Noting that the investment marks the 10th anniversary of the HIT's housing investment initiative in New York City, he added, "The HIT has invested more than $700 million of pension capital here since 2002 to build or preserve over 26,000 units of housing. In keeping with our commitment, 96% of those housing units are affordable to low- and middle-income New Yorkers."
Electchester was built in the post-World War II era, when visionary IBEW leader Harry Van Arsdale, Jr., sought to create well-located, affordable housing for members of IBEW Local 3. He worked with the Joint Industry Board of the Electrical Industry to purchase 103 acres of a former golf course in Queens that would later become the Electchester Housing Companies. The development was built with 100% union labor, creating jobs to address the building trades' high post-war unemployment rates.
"The HIT's ability to invest in the Electchester owes much to Harry Van Arsdale's leadership and innovative thinking on pension capital," said Stephanie Wiggins, HIT's Executive Vice President and Chief Investment Officer. "He laid the foundation for the investment work the HIT does today."
Mr. Van Arsdale played a key role in creating collectively bargained pension funds, and he was one of the first to advocate investing pension capital in job-generating union-built construction projects. In fact, under his leadership in 1965, the New York City Central Labor Council became the first investor in the HIT's predecessor fund, one of the earliest investors of union pension capital to achieve the socially responsible objectives of jobs and housing.
"New York's limited supply of workforce housing makes projects like the Electchester an important priority for the HIT," said Carol Nixon, Director of the HIT's New York City Office. "We are glad we can help keep this community viable for the 5,500 New Yorkers who call it home."
About the HIT
The AFL-CIO Housing Investment Trust (HIT) is a fixed-income investment company registered with the Securities and Exchange Commission. It manages over $4.5 billion in assets for more than 350 investors, which include union and public employee pension plans. The HIT invests primarily in government and agency insured and guaranteed multifamily mortgage-backed securities. The HIT is one of the earliest and most successful practitioners of socially responsible, economically targeted investing, with a 45-year track record that demonstrates the added value derived from union-friendly investments. The investment objective of the HIT is to provide competitive returns for its investors and to promote the collateral objectives of constructing affordable housing and generating employment for union members in the construction trades and related industries. Since its inception, the HIT has invested over $6.5 billion to finance over 105,000 units of housing nationwide, generating over 70,000 union jobs. More information is available on the HIT's website, www.aflcio-hit.com.
Michael K. Frisby
SOURCE AFL-CIO Housing Investment Trust