|AFL-CIO HIT Construction Jobs Initiative Continues to be a Huge Success
WASHINGTON, Sept. 1, 2011 -- At the Labor Day holiday, unemployment among union construction trades remains at levels not seen since the Great Depression. But the AFL-CIO Housing Investment Trust (HIT) is putting construction workers back on the job: The HIT created more than 10,000 union construction jobs during the past two years, and set a new goal of reaching 15,000 jobs by year-end 2012. It is already on its way to meeting this new objective with more than 11,000 jobs created to date.
With investments of $963 million in 34 projects across the country, the fixed income investment company has utilized union pension capital to generate nearly $2 billion of development activity, while creating or preserving 12,752 housing and healthcare units.
"This is a remarkable accomplishment," said John J. Sweeney, the HIT Board Chairman and President Emeritus, AFL-CIO, noting that the construction industry lost two million jobs since the start of the recession, more than any other sector, and has lagged in the recovery. "The unemployment rate for construction workers remains at Depression-era levels. The HIT is helping put these men and women back to work. We have financed real estate developments that are providing affordable housing, jobs and economic activity in cities from coast to coast."
The HIT has implemented a Construction Jobs Initiative to put union workers from the hard-hit construction industry back on the job. Development projects financed under the initiative have also stimulated local economies by creating and supporting thousands of jobs in other sectors, such as suppliers and service providers to the projects. The Construction Jobs Initiative, adopted in mid-2009 with the support of the AFL-CIO and the Building and Construction Trades Department, AFL-CIO, utilizes union pension capital for high credit quality fixed-income investments. All of the projects are 100 percent union built, and 60 percent of the 9,932 housing units produced under the jobs initiative will be affordable to low- to moderate-income families.
"The HIT's investments are a win-win for working people and their communities," said AFL-CIO President Richard Trumka. "At a time when construction activity has been at a virtual standstill because many lenders have withdrawn from real estate development, the HIT is financing new projects that will help cities and towns spur economic development and strengthen their communities."
Since it was established in 1965, the HIT has invested more than $6.2 billion in developments that have created more than 101,000 housing units and 69,000 union construction jobs.
"The HIT is investing union pension capital to create jobs for union construction workers on projects that help communities grow," said Mark Ayers, President of the Building and Construction Trades Department, AFL-CIO. "It's one of the ways unions are supporting America's economic recovery."
It's noteworthy that while many Wall Street investors suffered significant losses during the housing crisis, particularly on private market mortgage backed securities, the HIT avoided risky investments enabling the company to continue making socially responsible investments that benefit communities and bring competitive returns to its investors.
"Our investments help union pension plans earn competitive returns, while also getting union members back on the job," said Stephen Coyle, Chief Executive Officer of the HIT. "Those workers are not only putting food on their table now, they are also making contributions to their pension plans again, so the pension plan has more money to invest. It's a cycle that benefits everyone."
Examples of the HIT's recent job-generating investments include:
- In Boston, $124 million for four projects to build or rehabilitate affordable housing units. The Charlesview Apartments, Franklin Park, Old Colony and Washington Beech projects represent a combined development investment of more than $268 million. They will produce 632 affordable housing units and generate more than 1,500 union construction jobs.
- In Chicago, $32 million for two projects that will revitalize a public housing development and convert a downtown office building into mixed-income housing. The office conversion project, Randolph Tower City Apartments, will produce 310 in-town housing units. The two Chicago projects, with a combined development investment of $167 million, are generating more than 500 union construction jobs.
- In Minneapolis, $62 million for two projects creating nearly 1,400 housing units, $140 million in development activity and 730 union construction jobs. The FloCo Fusion Apartments project is developing new housing near the University of Minnesota, and the Riverside Plaza project will finance major rehabilitation work on a historic mixed-income development.
- In New York City, $289 million for six investments in the metro area, including construction of two affordable housing developments in Harlem, a university housing facility, a health care facility in neighboring Yonkers and rehabilitation work on a major Manhattan housing development and five Housing Authority properties. These recent projects, with a total development value of over $380 million, will create or preserve approximately 7,000 housing units and generate more than 1,900 union construction jobs.
- In San Francisco, $105 million for three developments, known as 333 Harrison, Arc Light Co. and Potrero Launch, that will help the city attract renters and businesses to in-town neighborhoods. The three projects have a total development value of $233 million and will create 616 housing units and more than 1,300 union construction jobs.
- In St. Louis, $124 million for three projects that will create more than 660 housing units and 2,200 union construction jobs. Total development value is $303 million. The Park Pacific and Laurel projects are part of the city's comprehensive downtown redevelopment plan, and Council Tower Senior Apartments will help meet the city's need for senior housing.
About the HIT
The AFL-CIO Housing Investment Trust is a fixed-income investment company registered with the Securities and Exchange Commission. It manages over $4 billion in assets for approximately 350 investors, which include union and public employee pension plans. The HIT invests primarily in government and agency insured and guaranteed multifamily and single family mortgage-backed securities. The HIT is one of the earliest and most successful practitioners of socially responsible, economically targeted investing, with a track record that demonstrates the added value derived from union-friendly investments. The investment objective of the HIT is to provide competitive returns for its investors and to promote the collateral objectives of constructing affordable housing and generating employment for union members in the construction trades and related industries. Since its inception, the HIT has invested over $6.2 billion to finance more than 101,000 units of housing nationwide, generating over 69,000 union jobs.
Michael K. Frisby