Can NYC Pension Funds Help Fix Our Housing Crisis?
PLUS I'm hosting events on Jan 5 and Jan 6!
I’m hosting a couple events in the new year to help YOU get more involved in local politics and policy.
Community Board 101
✨ RSVP HERE ✨
On January 5, Open New York is hosting a Community Board 101 training/info session. I’ll be presenting, as well as two other current community board members. If you’re thinking of applying for your Community Board, the applications open in early 2026, so this info session is great timing! We plan to cover:
What Community Boards are and why they matter
What it’s like to be on a Community Board
The application process
When: Monday, 1/5/26, 6-8PM
Where: Open New York office or online. We will have food.
✨ RSVP HERE ✨
I’ve written a lot about community boards, including what they do, how to influence them, and my firsthand experience serving on a particularly dramatic one.
An Intro to County Committee
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On January 6, Rep Your Block, Locally Sourced NYC, and NYC Politics 101 are partnering to help you learn about County Committee!
The County Committee is the ground floor of the Democratic Party.
Consider County Committee if you want to get more involved in local politics, but 3 community board meetings a month is too much of a commitment.
Consider County Committee if you want to pick the winning candidate in your next special election.
Come learn all about this position, why it matters, and how you can run in 2026!
When: Tuesday, January 6, 2026, 6:30 PM - 8:00 PM
Where: Fabrik Dumbo. We will have food.
✨ RSVP here ✨
For more info on County Committee, here’s my explainer post from last year.
I’m sharing the topics I’m exploring to build a stronger foundation for serving on the NYC’s Comptroller transition committee. I’m sharing what I learn along the way, so thanks for joining me in my research on Comptroller-related topics!
In his campaign for NYC Comptroller, Mark Levine proposed a “NYC Affordability Fund” which would build or preserve 75,000 affordable units over the next decade. One pillar of the plan is to invest pension funds in local affordable housing projects.
NYC’s pension funds are huge and it’s the Comptroller’s job to manage them. NYC pensions total $295 billion, and are invested in a diverse array of assets, from stocks and bonds to real estate and infrastructure. Well-managed pensions matter to every New Yorker because if pension funds fall short, the City must make up the difference- potentially leading to cuts to city services.
For a deeper dive into what these pension plans are and how they’re doing financially, check out my post here.
Since NYC is in a housing crisis, it sounds like a no-brainer to invest pension funds in affordable housing. But because the pension manager’s primary responsibility is to earn strong financial returns, it’s worth investigating whether affordable housing investments meet that objective.
This post will cover:
How will affordable housing investments be decided?
What returns can we expect from investments in affordable housing?
What types of affordable housing are most likely to fit?
My conclusion
How will affordable housing investments be decided?
Affordable housing investments would be made through the city pension systems’ existing Economically Targeted Investments (ETI) fund.
ETIs currently make up about 2% of the city’s pension investments, but only roughly half of that allocation has been used—leaving around $2.5 billion still available.
According to the Comptroller’s office, ETIs are designed to deliver a triple bottom line:
risk-adjusted financial returns in line with pension targets and benchmarks (though not necessarily at the very top of those ranges)
measurable public benefits
investments focused on New York City and nearby counties
The Comptroller’s Office aims to report annually on the public benefits that come from the ETI funds.
My take: it’d also make sense for those reports to include ETIs’ financial performance.
What returns can we expect from investments in affordable housing?
Reliable data on affordable housing returns is limited, but investors generally earn money in a few well-established ways:
On the direct real estate operations side, affordable housing projects often target returns ranging from the high single digits to the mid-teens.
Private equity funds in affordable housing typically aim for returns of about 5% to 7%.
While these returns are lower than other alternatives, affordable housing investors emphasize their long-term stability and predictability. That stability comes from persistently high demand for affordable housing that far exceeds supply, a dynamic that becomes even more pronounced during economic downturns, helping insulate these investments from market volatility.
What types of affordable housing are most likely to fit?
Research from the Federal Reserve Bank of New York found that investments have most often gone toward preserving existing affordable housing rather than financing new construction. Preservation projects are generally seen as lower risk and more predictable, which helps explain their appeal to pension funds seeking steady, long-term returns.
The same survey found that pension funds invest across a wide range of affordability levels. On average, about 30% of their affordable housing portfolios serve households earning between 101 and 120% of area median income, while roughly 27% are available to renters earning up to 60% of area median income, including deeply affordable housing. This was frankly surprising to me– I assumed that deeply affordable housing would make up a smaller proportion since it’s less profitable.
About 91% of pension fund affordable housing investments are made through closed-end funds, meaning affordability is not always permanent. When these funds wind down, a new owner may choose to maintain or extend affordability restrictions, shift the income levels served, or convert the property to market-rate housing. This makes sense, given pension funds’ mandate to generate returns.
My conclusion
I agree with Comptroller Levine that the investment manager’s primary responsibility is to generate strong returns for pensioners. Within a balanced portfolio, it makes sense to allocate some capital to more stable, lower-return investments– and affordable housing can reasonably fit into that role. I support Mark’s NYC Affordability Fund and his proposed policy changes to make it easier and cheaper to build affordable housing in NYC.
Don’t forget to RSVP for
✨An Intro to County Committee ✨
See you next week!
Thank you for explaining this. It was very interesting. Is there also the financial benefit for the city of by reducing turnover for city employees if they have affordable housing stock at their salary bands to live in?