AFL-CIO HIT Reaches Milestone: Union Pension Capital Helps Create More Than 10,000 New Construction Jobs in Two Years

AFL-CIO HIT Construction Jobs initiative is a Huge Success

WASHINGTON, July 13, 2011 /PRNewswire-USNewswire/ -- At a time when unemployment in the union construction trades is at levels not seen since the Great Depression, the AFL-CIO Housing Investment Trust (HIT) has reached a milestone by creating more than 10,000 union construction jobs during the past two years.  With investments of $963 million in 34 projects across the country, HIT union pension capital leveraged nearly $2 billion of development activity, while creating or preserving 12,752 housing and healthcare units.

With its Construction Jobs Initiative, the HIT has put union workers from the hard-hit construction industry back on the job.  Development projects financed under the initiative have further stimulated local economies by creating and supporting thousands of jobs in other sectors, such as suppliers and service providers to the projects.

"This is a remarkable accomplishment," said John J. Sweeney, the HIT Board Chairman and President Emeritus, AFL-CIO, noting that the construction industry lost two million jobs since the start of the recession, more than any other sector, and has lagged in the recovery. "The unemployment rate for construction workers remains at Depression-era levels. The HIT is helping put these men and women back to work. We have financed real estate developments that are providing affordable housing, jobs and economic activity in cities from coast to coast."  

The Construction Jobs Initiative, adopted in mid-2009 with the support of the AFL-CIO and the Building and Construction Trades Department, AFL-CIO, invests union pension capital to help address the nation's unemployment crisis.  Using union pension capital, the HIT specializes in high credit quality fixed-income investments. Its projects are 100 percent union built, and 60 percent of the 9,932 housing units produced under the jobs initiative will be affordable to low- to moderate-income families.  

"The HIT's investments are a win-win for working people and their communities," said AFL-CIO President Richard Trumka. "At a time when construction activity has been at a virtual standstill because many lenders have withdrawn from real estate development, the HIT is financing new projects that will help cities and towns spur economic development and strengthen their communities."

Since it was established in 1965, the HIT has invested more than $6.2 billion in developments that have created more than 101,000 housing units and 68,000 union construction jobs.

"The HIT is investing union pension capital to create jobs for union construction workers on projects that help communities grow," said Mark Ayers, President of the Building and Construction Trades Department, AFL-CIO.  "It's one of the ways unions are supporting America's economic recovery."

It's noteworthy that while many Wall Street investors suffered significant losses during the housing crisis, particularly on private market mortgage backed securities, the HIT avoided risky investments enabling the company to continue making socially responsible investments that benefit communities and bring competitive returns to its investors.  

"Our investments help union pension plans earn competitive returns, while also getting union members back on the job," said Stephen Coyle, Chief Executive Officer of the HIT.  "Those workers are not only putting food on their table now, they are also making contributions to their pension plans again, so the pension plan has more money to invest.  It's a cycle that benefits everyone."  

Examples of the HIT's recent job-generating investments include:

• In Boston, $124 million for four projects to build or rehabilitate affordable housing units.  The Charlesview Apartments, Franklin Park, Old Colony and Washington Beech projects represent a combined development investment of more than $268 million. They will produce 632 affordable housing units and generate more than 1,500 union construction jobs.  
• In Chicago, $32 million for two projects that will revitalize a public housing development and convert a downtown office building into mixed-income housing.  The office conversion project, Randolph Tower City Apartments, will produce 310 in-town housing units.  The two Chicago projects, with a combined development investment of $167 million, are generating more than 500 union construction jobs.
• In Minneapolis, $62 million for two projects creating nearly 1,400 housing units, $140 million in development activity and 730 union construction jobs.  The FloCo Fusion apartments project is developing new housing near the University of Minnesota, and the Riverside Plaza project will finance major rehabilitation work on a historic mixed-income development.
• In New York City, $289 million for six investments in the metro area, including construction of two affordable housing developments in Harlem, a university housing facility, a health care facility in neighboring Yonkers and rehabilitation work on a major Manhattan housing development and five Housing Authority properties.  These recent projects, with a total development value of over $380 million, will create or preserve approximately 7,000 housing units and generate more than 1,900 union construction jobs.
• In San Francisco, $105 million for three developments, known as 333 Harrison, Arc Light Co. and Potrero Launch, that will help the city attract renters and businesses to in-town neighborhoods.  The three projects have a total development value of $233 million and will create 616 housing units and more than 1,300 union construction jobs.
• In St. Louis, $124 million for three projects that will create more than 660 housing units and 2,200 union construction jobs. Total development value is $303 million.  The Park Pacific and Laurel projects are part of the city's comprehensive downtown redevelopment plan, and Council Tower Senior Apartments will help meet the city's need for senior housing.

About the HIT

The AFL-CIO Housing Investment Trust is a fixed-income investment company registered with the Securities and Exchange Commission. It manages nearly $4 billion in assets for approximately 350 investors, which include union and public employee pension plans. The HIT invests primarily in government and agency insured and guaranteed multifamily and single family mortgage-backed securities.  The HIT is one of the earliest and most successful practitioners of socially responsible, economically targeted investing, with a 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 $6.2 billion to finance more than 101,000 units of housing nationwide, generating over 68,000 union jobs.

Investors should consider the HIT's investment objectives, risks and expenses carefully before investing. A prospectus containing more complete information may be obtained from the HIT by calling the Marketing Department at 202-331-8055, or by viewing www.aflcio-hit.com. The prospectus should be reviewed carefully before investing.

For the 1-, 3-, 5-, and 10-year periods ended May 31, 2011, the HIT's net returns were 5.74%, 6.76%, 6.62%, and 5.90%, respectively. The performance data quoted represents past performance and is no guarantee of future results. Investment results and principal value will fluctuate so that units in the HIT, when redeemed, may be worth more or less than their original cost. The HIT's current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end is available from the HIT's website at www.aflcio-hit.com. Gross performance figures do not reflect the deduction of HIT expenses. Net performance figures reflect the deduction of HIT expenses and are the performance figures investors experience in the HIT. Information about HIT expenses can be found on page 1 of the HIT's current prospectus.

Contact: Michael K. Frisby, 202-625-4328

SOURCE AFL-CIO Housing Investment Trust