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Justin Brannan wants to focus on constructing affordable housing specifically for city workers in a program modeled after Electchester, while Mark Levine wants to produce 75,000 affordable units by helping private developers finance projects.
If you’re still trying to figure out the difference between the two leading candidates for comptroller, there’s one policy you might want to look into—the specific way they plan on using pension funds to finance affordable housing.
Brooklyn District 47 Councilmember Justin Brannan and Manhattan Borough President Mark Levine, the two Democratic frontrunners for the city’s fiscal watchdog role, propose investing a small share of the city’s $280 billion pension fund to finance the construction of affordable housing. The move, both candidates say, would be a responsible investment for pensioners and contribute to filling the city’s severe housing shortage.
Brannan wants to focus on constructing affordable housing specifically for city workers in a program modeled after Electchester, while Levine wants to produce 75,000 affordable units by helping private developers finance their delayed projects.
“Historically, perhaps commercial real estate was seen as a safer investment, and that’s no longer true. Actually, housing is a safer investment right now,” said Levine at Tuesday’s comptroller debate, the final of the campaign. “So there’s a possible win-win here where we can invest in New York City, we can get housing built that might otherwise be delayed for years, giving affordable homes to people in need, but also producing good, stable returns for our retirees.”
To build the number of units he’s promising, Levine plans on investing $2.5 billion to finance the construction of affordable housing by private developers. The funds would not be a subsidy (which many would likely still need from other government sources) but a loan developers could access at competitive rates. In order to achieve this, Levine says he would designate affordable housing as a “core real estate category,” a designation reserved for high-quality, low risk properties that earn steady returns.
Affordable housing investments typically come from the pensions’ Economically Targeted Investments fund, which is capped at 2 percent by the pension board.*
Brannan’s plan lacks the details of Levine’s, but focuses on a more specific goal: the creation of affordable housing for city workers. This would follow in the tradition of mid-20th century housing development, when buildings were constructed across the city for members of specific unions.
Real estate is a fundamental part of any investment portfolio, he said. Not only would the move help city workers, but also show investors that New York is serious about being a long-term economic powerhouse, argued Brannan, who also chairs the City Council’s Finance Committee
“I hear from folks who are trying to get people to invest in real estate in the city of New York and it’s hard or impossible because they don’t even see the city investing in itself,” he said at Tuesday’s debate.
While both proposals could generate the construction of affordable housing, experts warn that offering financing doesn’t necessarily mean developers will take it. New York City’s financing has historically come with restrictions to access it, which are sometimes too burdensome for developers to make the effort.
“It’s been a longstanding goal to more actively utilize the pension funds to fuel investment in affordable housing. But the increasing cost challenges of building and operating housing make solving the financing puzzle more difficult all around,” said Howard Slatkin, executive director at the Citizens Housing and Planning Council.
He and other experts say both ideas have potential, but their impacts will depend on the details.
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*This story was updated to correct a line about the amount of pension funds that can be allocated to the Economically Targeted Investments (ETI) program. The 2 percent threshold is set by the pension board, not state law.
