Cirrus, Builders' Unions Join NYC to Launch $500M Housing Fund

The Building and Constructions Trades Council (BCTC) and Cirrus Real Estate Partners are joining forces with New York City in a public-private partnership to launch a $500M fund to build new affordable workforce housing in NYC.

BCTC, an umbrella organization representing more than 100,000 buildings trades workers, has made an initial pledge of $100M from a pool of union pension funds. Cirrus, an NYC-based investment firm with a portfolio encompassing an estimated $150B of commercial real estate loans, has pledged to raise more than $400M for the initiative.

The fund, which seeks to build new affordable and workforce housing using unionized labor, is the first of its type in the nation, according to Mayor Eric Adams.

“As the blue-collar mayor of America’s biggest union town, I have been clear that our mission is to create good-paying jobs and make our city more livable for hardworking New Yorkers,” Adams said, in a statement.

“This partnership will lead to the development of affordable workforce housing under negotiated Project Labor Agreements that will create family sustaining union careers for New Yorkers,” said Gary LaBarbera, the BCTC president. “We believe that the union funds investing in this program have demonstrated tremendous vision and we look forward to building the housing supply for the city’s working class.”

BCTC is pooling pension funds from 11 union funds to support the initiative.

According to NYC’s release, the goal of the partnership is to invest in New York City-based housing projects that will be located near transit, that advance sustainable building goals and that will deliver affordability at 80% to 140 % of area median income.

Each project funded by the initiative will be built under a negotiated project labor agreement with BCTC “reflecting responsible contracting policies to advance fair wages, health and retirement benefits, and apprenticeships and other job training programs,” the release said.

Last month, NYC released data showing that only 1.4% of rental units in the city were vacant and available in 2023, the lowest vacancy rate in 56 years. The data from NYC’s Department of Housing Preservation and Development also underlined the affordability crisis: the vacancy rate for lower-cost apartments was only a fraction of the overall 1.4% rate.

The vacancy rate for apartments priced less than $2,400 per month was below 1% in the city’s latest tally, which is known as the Housing and Vacancy Survey. Apartment rents in Manhattan have been averaging median rents of more than $4,000 per month.

The overall vacancy rate translates to 33,000 units, the lowest number of available apartments in NYC since 1968, a year before rent stabilization was introduced limiting rents on more than 1M units. The survey also found that more than 41K housing units in NYC are not available for rent because they are undergoing or awaiting renovation.

The last time the survey was conducted, in 2021, the vacancy rate for apartments was 4.5%. NYC officials say any vacancy rate that is less than 5% constitutes a housing emergency; a rate between 5% and 8% is considered “healthy,” the report said.

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