The AFL-CIO Housing Investment Trust (HIT) has announced the first project under its $1 billion Bay Area Investment Initiative for jobs and affordable housing launched earlier this fall.
The company will provide $19.1 million to help finance the new construction of 96 efficiency apartments for extremely low-income and homeless residents, in San Francisco’s South of Market neighborhood.
The HIT’s investment will fund part of the total construction costs of 53 Colton, projected by officials to be $52.5 million. The site is part of a broader, two-acre redevelopment plan known as 1629 Market Street, spearheaded by the United Association Local 38 Plumbers and Pipefitters. The project will include a new union hall for Local 38, market-rate housing, retail development and a publicly accessible park.
“The loss of construction jobs is one of the worst economic impacts that the pandemic is having on this great city,” HIT CEO Chang Suh stated. “COVID-19 has put even more people at risk and in need of affordable housing.”
“As we begin to emerge from the COVID-19 pandemic, new investments like this in San Francisco are going to be critical to our economic recovery,” San Francisco Mayor London Breed stated. “We all know we need to build more housing, because even while rents have dropped recently, they will begin to rise again as our economy recovers, unless we create enough new homes to keep up with demand. By investing in housing, we not only create the homes our city needs, but we also create new, well-paying jobs that will help get our economy back on track.”
The HIT is a mutual fund which invests union and public pension capital into multifamily housing nationwide. In September, the HIT announced it would stand ready to invest up to $500 million over the next five years to develop market-rate, workforce, and affordable housing in the Bay area.
Through its Bay Area Investment Initiative, the HIT expects to join forces with the public, private and nonprofit sectors to leverage up to an additional $500 million of investments from other sources. The HIT estimates that the effort could create approximately 4,000 union construction jobs, 12,000 total jobs, and 4,000 housing units in the Bay Area by 2025.