HOUSING WATCH : It’s a Huge Help

After the Los Angeles riots, the AFL-CIO Housing and Building Investment Trusts looked for investment opportunities in affordable housing and economic development projects in the central city. With help from the U.S. Department of Housing and Urban Development, the labor union is now using $51.8 million in pension funds to finance five worthy projects.

This admirable commitment will produce new affordable housing for 250 families, create 500 construction jobs and generate 250 permanent jobs. The housing and the jobs are very welcome indeed in recession-weary and disaster-battered Los Angeles.

The help from HUD takes the form of coveted housing subsidies. “Section 8” vouchers will guarantee market-rate rents and reduce landlords’ risk in accepting low-income tenants. Some of the vouchers will be allocated to each project and will make the deals more attractive to lenders.

Affordable housing is planned for Boyle Heights, Lincoln Heights and South-Central Los Angeles. Two office buildings, considered economic development projects, are slated for Southwest Los Angeles and Watts. More projects are under consideration.

Pension funds are America’s fastest-growing investment resource, but pension managers rightly are afraid to put people’s retirement futures at risk. HUD’s involvement reduces that risk.

Let’s hope this new partnership between pension funds and government is a power engine of low-income housing growth and contributes to the rebuilding of America.