The labor movement is making a huge investment in the rebuilding of New York City. At a Jan. 17 press conference, the AFL-CIO and its Housing Investment Trust announced a $750 million initiative aimed at expanding home ownership for New York’s working families, helping to finance new commercial investment in the core of the city, and expanding affordable rental residential housing in the city’s neighborhoods.
Scores of elected officials and labor leaders took the podium at the New York City Central Labor Council’s new headquarters, at 31 West 15th Street, to outline the initiative and pledge to work together to multiply its impact.
First was New York State Controller Carl McCall, who thanked the labor movement for providing the leadership and “a vehicle with which we can work together and begin the rebuilding of all of New York – not just the financial center, but all of New York – by providing housing and economic opportunity.”
McCall, the sole trustee of the retirement fund that represents almost one million public employees in the state, announced plans to commit an additional $100 million to the initiative, saying, “The retirees and public employees of New York want to be part of this.”
Gifford Miller, Speaker of the New York City Council, stressed the council’s “commitment to working with you, as partners, to address the needs of the working men and women of this city.” And Manhattan Borough President C. Virginia Fields described the investment as an “incredibly important initiative” that will encourage others to follow suit.
Stephen Coyle, CEO of the Housing Investment Trust, outlined the initiative’s three elements. First is a homeownership program, in partnership with Countrywide Home Loans and Fannie Mae, to finance mortgages to union members and municipal employees. “We hope by Easter or the early part of summer to convert that program to a zero-down-payment mortgage program, so that working families will be able to buy a stake in this great city.”
The second component, a commercial development program, is under way; its first project involves a $75 million investment for which ground has already been broken at Ninth Avenue and 37th Street. The third component is a program to build affordable rental housing in the five boroughs.
A COMMITMENT TO COMMUNITY
Coyle referred to recent news reports of how people entrusted with the management of funds, “like the Enron executives, take the money, put it in their pockets, and escape out the back door – while the workers are left with no pensions. That is almost a metaphor for the culture of greed,” he said. “The culture of greed is a sickness in this country. The alternative is a commitment to the community, a caring community – and no group in this society represents that more than the American labor movement. And no place is it more real and more visible than in New York City.”
As chair of the Housing Investment Trust for the last 12 years, Richard Ravitch has seen the fund’s exponential growth. “We are not only attractive because of the jobs that are created and the social utility of what gets built, but because we have managed to provide a rate of return to the retirees, the beneficiaries of the pension funds, far better than they could get with any comparable investment,” he said.
AFL-CIO President John Sweeney noted that the progress made to date in recovering from the WTC disaster “could only have been accomplished in a highly unionized city where organized, highly skilled workers from all sectors come together so dramatically, with union contractors and union allies, in times of crisis.
“I’m glad that I can be here today to join in announcing yet another unique contribution by labor to the healing and rebuilding process, through its new AFL-CIO NYC Community Investment Initiative. This initiative will focus on critical housing and economic development needs. It will be a good investment of union workers’ pension funds,” Sweeney said. “The shortage of affordable housing was a problem before Sept. 11 and it remains an even greater problem today.”
Mayor Michael Bloomberg thanked the AFL-CIO and its pension funds for making this investment. “First and foremost, you’ve made a good investment. The best days for New York are coming and I think you will find that this is the smartest thing you can do with your pension fund money,” he said. Noting that New York City needs two things – jobs and buildings – he pointed out that “this investment will create both…You are to be congratulated for your forward thinking and your confidence in New York City.”
Declaring that “this administration is going to work with everybody in the city,” Bloomberg said: “The old divisions between management and labor, between business and unions, have to go away. We are in this together.” He, too, referred to the enormous role organized labor has played in recovery efforts since Sept. 11, at the World Trade Center and the Fresh Kills landfill. “All of that is being done with union labor.” Bloomberg stressed “how much has been accomplished in such a short time – and, with all the heavy equipment, there has not been one serious accident yet.”
HISTORY OF THE TRUST
First established 35 years ago, the Housing Investment Trust invests union pension funds in single and multi-family housing development, creating union jobs in the process and generating a solid return for the funds. With more than $2.7 billion in assets, it has created more than 65,000 housing units nationwide, all built with 100 percent union labor.
A companion program, the AFL-CIO’s Building Investment Trust, uses union pension funds to invest in institutional quality commercial real estate, from office buildings and hotels to retail businesses. These commercial ventures use union workers both in their construction and in their later operation. Today the program has more than $1.3 billion invested in or committed to more than 60 projects.