The Union-Backed AFL-CIO Housing Investment Trust Is Funding Housing Projects Throughout The Twin Cities
(MINNEAPOLIS-ST. PAUL, MINNESOTA) - At University and Fairview Avenues in St. Paul, developers behind the Morrow Apartments - a two-building, 243-unit affordable housing complex - were able to get construction off the ground at the height of the Coronavirus Pandemic by borrowing nearly $80 million from an AFL-CIO Pension Fund that has favored Minnesota for decades. The same holds true at the Wilder Square apartments on Milton Street, also in St. Paul, where the same fund is financing a third of the $33 million top-to-bottom rehab of a 136-unit affordable housing complex built in the 1970s.
For more than 35 years, an Organized Labor-supported mutual fund has pooled Union pension dollars, institutional investments and other assets to back new real estate construction across the country, with a general focus on housing - nearly half of it affordable housing.
Chaired by former St. Paul Mayor Chris Coleman, the AFL-CIO Housing Investment Trust (HIT) is propping up new development by providing construction financing and buying mortgage-backed securities in 21 cities, including Boston, Chicago, Detroit, San Francisco and Milwaukee - but it holds a special place in its heart for Minnesota, where more than a fourth of its active projects have resided during the pandemic.
The fine print?
One of the requirements for projects financed by HIT is that they employ the Unionized Building Trades, which is not always the favored option for cost-conscious developers.
But neither pandemic nor recession has stopped Union-funded/Union-made apartments from taking root in urban corners where everyday Workers have been hard-pressed to find quality housing they can afford.
The loans are paid back into the $7 billion fund, allowing it to grow.
“For me, it’s a double-bottom line,” said Coleman, in an interview. “You’re investing Union pension funds into creating Union jobs and affordable housing across the country.”
In Boston, where heavy investment in life-science companies has drawn high-paying jobs but gentrified low-income neighborhoods, HIT has focused on adding “workforce housing” for Middle-Income Workers.
In Milwaukee, HIT is backing the Couture, a 44-story skyscraper slated to become Wisconsin’s tallest residential building.
In West Virginia, the fund has backed Teacher housing.
The fund has now backed more than 100 projects in Minnesota, including 10 that are currently under construction: The Morrow Apartments; Wilder Square; The Sundance at Settler’s Ridge townhome community in Woodbury; The Zvago Cooperative at Stillwater senior living; and the 128-unit Gateway Northeast multi-family development in Minneapolis.
Four Minnesota projects secured funding from the HIT this year: Wilder Square; The Amber Union affordable apartments in Falcon Heights; The 68-unit Old Cedar Apartments in Bloomington; and the American Cooperative of Anoka, an 87-unit senior housing cooperative.
At the Morrow, the HIT and Bridgewater Bank took on all of the construction financing - a $50 million commitment - at a low interest rate.
“Morrow is an affordable housing project with a sixteen-month construction schedule and we did not want to take on interest rate risk during that time period, given all the uncertainty from the pandemic,” said Paul Keenan, a Vice President with Reuter Walton, the St. Louis Park-based developer, which expects residents to begin moving into the first building by the end of the year.
To Continue Reading This Labor News Story, Go To: www.twincities.com/2021/11/21/a-union-backed-trust-is-funding-housing-projects-throughout-the-twin-cities/