The American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) is using union pension plan cash to help fund a $1bn housing production program.
The AFL-CIO Housing Investment Trust (HIT), the union's real estate investment manager, has joined Lend Lease Mortgage Capital and US mortgage giant Fannie Mae in a $1bn venture to produce 5000 to 7000 rental units in cities across the US. The program is targeting 30% of these units at low and moderate income households.
Over the next five years, AFL-CIO HIT, plans to invest more than $750m in the production program. The real estate manager, which runs $2.7bn in real estate assets, said that it made the investment in order to increase the volume of multifamily housing units and diversify its portfolio.
AFL-CIO president John Sweeney said of the venture: Union pension capital can be a powerful tool to finance housing for America's working families hard hit by the national affordable housing crisis. This is the kind of creative housing production partnership that can make a difference.
AFL-CIO HIT uses pooled union pension fund cash to provide financing for housing development. Its investments provide retirement security for working people while generating union employment and improving the housing supply. All work on AFL-CIO HIT financed projects is completely performed by union labour.
Lend Lease Real Estate Investments is one of the largest real estate investment managers in the world, and currently has $35bn in real estate and commercial mortgages under management for institutional and private clients in the US.
By Geoffrey Ho
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