Tenants, activists and a state assemblyman gathered in protest last week outside the massive 1,192-unit Riverside Park Community development at 3333 Broadway in west Harlem. The development is one of five projects formerly in the state Mitchell-Lama program bought by the investment groups Urban American and City Investment Fund – together calling themselves Putnam Holding Company, LLC – in May for a staggering $938 million.
“I think it is a shame the city is investing money in preserving affordable housing, but at the same time investing money that is bringing a loss in affordable housing,” Benjamin Dulchin, associate director of the Association for Neighborhood and Housing Development, told the group of around 60 people on Thursday.
Affordable housing advocates are asking city Comptroller William Thompson – whose office manages the city's retirement fund – to review the investment by the New York City Employees’ Retirement System in the purchase of the developments. They seek a similar review from state Comptroller Thomas DiNaopli, who is the sole trustee for the New York State and Local Retirement system.
State Assemblyman Micah Kellner, a Democrat whose Upper East Side district includes one of the purchased properties, criticized the investment of retirement funds for city and state employees in “private equity groups that purchase former Mitchell-Lama developments and make them unaffordable to those same workers.”
The housing groups Tenants and Neighbors and the Urban Homesteading Assistance Board (UHAB) last week documented that the city employees’ retirement account invested $85.9 million in the City Investment Fund, while the New York State and Local Employees’ Retirement System invested $46.6 million in the City Investment Fund and $25.7 million in the Morgan Stanley Real Estate Fund IV. The City Investment Fund and the Morgan Stanley fund in turn provide capital to Putnam Holding Company.
The city comptroller's office, which has heavily invested retirement funds in affordable housing, is concerned about the loss of such apartments through public investments, spokeswoman Laura Rivera said. "The comptroller is sensitive to investments in real estate deals that have a negative impact on affordable housing. In fact, he finds the practice of investing in speculative real estate deals that pressure low-income tenants very troubling and will do everything in his power to protect tenants at risk," Rivera said.
But Thompson did not consider the Harlem portfolio to be an unwise investment, she said. “This does not seem that it would be the type of investment that would have a negative impact on affordable housing,” she said.
In response to that, Kellner said, “I would have to disagree with that. From my firsthand experience I see this investment has a negative impact on affordable housing.” Kellner's district includes residents of a development on Roosevelt Island that was part of the $938 million deal. The assemblyman spoke with the city comptroller’s office late Friday and planned to meet with them further in the coming weeks on the investment.
DiNapoli’s office had had little to say about the deal. “We are constantly reevaluating our portfolio. We look at this and every investment,” said spokesman Jim Fuchs.
