Q&A
Investment in preserving rent-stabilized housing units affected by Signature Bank collapse
0:31:43
·
174 sec
Comptroller Lander discusses a recent investment by the New York City Employees' Retirement System (NYCERS) to preserve rent-stabilized housing units affected by the Signature Bank collapse.
- NYCERS will invest up to $60 million to preserve 35,000 rent-stabilized housing units.
- The investment is part of a collaboration involving Community Preservation Corporation, Related Funds Management, and Neighborhood Restore.
- The initiative aims to prevent these housing units from being acquired by vulture investors who might prioritize returns over tenant welfare.
- The investment is expected to yield an 11% internal rate of return (IRR) net of fees, meeting the pension fund's return thresholds.
- Lander describes this as a win-win situation, securing retirement benefits for city employees while preserving affordable housing in New York City.
Justin Brannan
0:31:43
So yesterday, you announced along with the mayor and public advocate that NYSERs will invest up to $60,000,000 from the pension access to preserve 35,000 rent stabilized housing units that were impacted by the collapse of Signature Bank last year.
0:31:59
Could you talk about why that decision was made to utilize the funds to preserve those housing units?
Brad Lander
0:32:04
Absolutely.
0:32:05
This is such a great I mean, this could have been such a disaster, and I feel proud not just of NYSERs and and our office, but of the whole housing community that came together, which is why we really had such a good group there yesterday.
0:32:18
So a year ago when Signature Bank collapsed, there was a lot of attention on the deposits, as, of course, there should be, and it was quickly made clear that were insured.
0:32:26
And New York Community Bank, part of Flagstar, took over their deposits and liabilities.
0:32:32
But they did not want to take their rental housing loan portfolio, and that raised a lot of questions be because people knew that Signature had been reputed to, essentially do sloppy lending, and there was real concern about what that would mean.
0:32:47
So the FDIC took over receivership for all of Signature's loan portfolio, real estate loan portfolio, and, you know, announced a process of putting it in 14 different pools and bidding it out.
0:33:03
We immediately all got to work, those of us that, you know, have care a lot about housing investment, to talk about how that could go because you can't have those things just grabbed by vulture investors who might look to maximize returns, but at the expense of the tenants or the buildings or the conditions of people living in them.
0:33:21
Fortunately, the FDIC, their mission includes attending to housing preservation, and so a great, collaboration came together led by Community Preservation Corporation, led by Rafael Sestero with involving related funds management and neighborhood restore, and they put a partnership together that bid on the 6 of the 14 pools that have the rent stabilized and at risk housing stock, and I had been talking to them for some months making clear if an investment from the city pension funds, could meet our return thresholds, but also help them meet the capital requirements to do it, we would be thrilled to.
0:33:59
It got diligence by our real estate team.
0:34:01
It's got investment returns.
0:34:04
I think the anticipated IRR net of fees there is 11%, so, you know, well above the threshold that we talked about, And it is contributing to preserving 35,000 units of rents, 80% of which is rent stabilized, that really could have been a risk.
0:34:23
This is, like, a real one of those win win examples where you can do something that secures the retirement security of teachers and cops and firefighters and school crossing guards, and at the same time, invest in a way that ensures the stability of New York City's housing.
