| Pension funds to invest in affordable housing for Los Angeles
Three public pension funds will invest $65 million to develop
affordable housing for Los Angeles' shrinking middle class,
Mayor Antonio Villaraigosa said Tuesday.
The money will be invested in the Genesis Workforce Housing
Fund II, a private equity fund managed by Phoenix Realty
Group. The fund will reach $150 million when fully invested,
financing 2,250 housing units valued at $750 million, according
to the mayor's staff.
"This has to be just the start," Villaraigosa
said at a news conference to announce the $65 million commitment.
"Only 12 percent of Angelenos can afford to buy a
home today," Villaraigosa said. "Los Angeles is
losing its middle class. If we want good schools and safe
streets, we need to commit ourselves to making Los Angeles
a place where a teacher or a policeman can afford to buy
a house and raise a family."
Use of the pension funds is part of an effort to make up
for loss of money with the narrow defeat last week of Measure
H, a $1 billion affordable housing program.
"We just fell short of the two-thirds vote needed
with 62 percent," Villaraigosa said. "I think
voters recognize the importance of this and the need to
build more housing. This is a step to make up for that."
The mayor said he believes another bond measure should
be submitted to voters in 2008.
"It would be too soon to do it next year," Villaraigosa
said. "Also, I think we should wait for an election
where we have a larger turnout."
The next city elections are in March 2007, but there are
no citywide races on the ballot.
Villaraigosa said the priority for the pension funds will
be to make sure the investment generates an adequate rate
of return.
"This has to be responsible to protect the pensions
of our workers," Villaraigosa said. "But we can
encourage them to look at these investments to help our
city and our workers."
Eric Holomon of the Los Angeles City Employees Retirement
System, which has a $10.2 billion fund, said the decision
has two benefits.
"First and foremost, it is a good investment and brings
us a good rate of return," Holomon said. "Secondly,
it will help our members in making more housing available
to get them into housing."
The other participants are the Los Angeles Police and Fire
Pension Fund and the Los Angeles County Employee Retirement
Association.
Villaraigosa said he hopes to persuade the boards of state
employees and teachers pension funds also to invest more
in housing.
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