Dec 6 Financing for the rebuilding of housing
and infrastructure after Superstorm Sandy could come from New
York City's public pensions, the city's comptroller said on
New York City Comptroller John Liu said that he would
present a plan to board members of the pension funds in the
coming weeks to put some of the funds' nearly $127.8 billion
into infrastructure projects, as well as housing.
Possible proposals to help people recover from the storm
include investments in single-family mortgages and offering
small-business loans, as well as teaming up with other investors
to finance multifamily residential real estate, according to a
Liu, who is the investment adviser and custodian for the
city's five pension funds, did not disclose other details of the
plan. The funds cover about 581,000 active and retired members.
"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 vital and
necessary," Liu said. "It can be done in a way where we gain a
good return for our pensioners and taxpayers."
Sandy damaged or destroyed homes, businesses, tunnels,
roads, trains, water treatment plants and other infrastructure
across New York, New Jersey, Connecticut and beyond when it
swept ashore on Oct. 29.
New York City Mayor Michael Bloomberg has said that private
and indirect losses to the city from the storm totaled at least
Of that, private insurance is expected to cover $3.8
billion, with Federal Emergency Management Agency reimbursements
to cover at least an additional $5.4 billion. Bloomberg has
asked Congress for $9.8 billion to pay the rest.
New York's Metropolitan Transportation Authority, operator
of the country's largest mass transit system, has proposed
financing $4.8 billion of repairs and upgrades with the proceeds
from bond sales, until the debt can be paid off with
reimbursements from FEMA and insurance.
Like other public pension funds across the U.S., New York
City's funds have already been making some investments in real
estate and other hard assets.
Since the 1980s, the city's pension funds have allocated up
to 2 percent of their assets to so-called economically targeted
investments like low- to middle-income housing.
Currently, about 1 percent of their $127.8 billion in
combined assets are in such investments.
In September, for example, Liu announced that two of the
five funds would invest $19 million to provide a 30-year,
fixed-rate mortgage for a housing project in the city's South
Bronx that could not find financing elsewhere. The mortgage is
insured by a state mortgage agency.
"The rebuilding efforts in the aftermath of Sandy will
require much larger amounts of capital financing," Liu said.
As of June 30, the one-year return for the pension funds'
portfolio of economically targeted investments was 7.09 percent
and the 10-year overall return was 6.31 percent, according to