John Liu, New York City comptroller, said he wants to let the city’s public pension funds invest millions of dollars to finance or own housing for people displaced by Hurricane Sandy.
Mr. Liu said he intends to submit the proposal to board members of the city’s five pension funds in the New York City Retirement Systems, with a combined $128 billion in assets. If they accept the plan, the specifics would be announced in the next few weeks, he said.
“Now that there is a huge need to rebuild tens of thousands of homes in the city, the use of the city’s pension funds as capital to accelerate these projects is going to be vitally necessary, and it can be done in a way that we gain a good return for our pensioners and taxpayers,” Mr. Liu said Thursday after meeting in Manhattan with the Business and Labor Coalition of New York, a civic group.
Sandy, the biggest Atlantic storm on record, came ashore Oct. 29, pounding New York with winds of as much as 100 mph, killing more than 40 city residents and flooding transit tunnels and underground utilities.
Aside from providing mortgage financing, Mr. Liu said the retirement systems may own buildings as real estate investments. The pension funds may also finance restoration of infrastructure and city properties damaged by the storm, he said.
“The pension funds earn returns on the interest paid on the financing, but there are also opportunities where we go beyond debt financing and actually look at equity ownership,” Mr. Liu said.
Mr. Liu’s proposal represents an expansion of a program the comptroller’s office has managed since the 1980s: City pension funds allocate 2% of their assets for so-called economically targeted investments that provide capital for projects in New York’s poor and working-class neighborhoods.
The pension funds provide retirement benefits for teachers, school administrators, police, firefighters and civil servants. Through the Public Private Apartment Rehabilitation Program, they have financed $757 million in preservation or new construction of 29,694 affordable apartments, according to the comptroller’s office. Almost $2 billion has been invested since the target-investment program began.