In the wake of its vaporized $500 million equity investment in Stuyvesant Town, the giant California pension California Public Employees’ Retirement System, as of Monday, approved a new policy: No more investing in real estate deals that convert rent-regulated apartments to market rate.
Here’s more from Bloomberg:
The California Public Employees’ Retirement System, the largest U.S. public pension, said it will stop investing in real-estate projects that would eliminate rent-regulated apartments, such as New York City’s Stuyvesant Town-Peter Cooper Village.
The new policy states that Calpers cannot invest in projects that would eliminate rent-controlled apartments or convert them to market rates.
Stuyvesant Town—which also depended on rents rising dramatically—had the highest profile of these failed deals, but is by no means the only one. Thousands of apartments in swaths of Harlem and the outer-boroughs were purchased by private equity firms hoping to convert, and such distressed assets have received much focus from housing nonprofits such as the Association for Neighborhood and Housing Development and the Citizens Housing and Planning Council.