HUD, AFL-CIO Plan Joint Housing Effort

WASHINGTON — In an unusual arrangement with national labor leaders, the Department of Housing and Urban Development and the AFL-CIO are nearing an agreement to use at least $500 million in union pension funds to build urban housing in 20 U.S. cities, Clinton Administration and union officials said Tuesday.

Under the plan, badly needed capital would be funneled into urban areas for an estimated 5,000 to 10,000 low- and middle-income housing units. About $75 million of the total would go to Los Angeles as part of a commitment that the labor federation made after last year’s rioting, labor officials said. Oakland also would receive an undetermined amount of new housing under the plan.

The proposal, disclosed by Housing Secretary Henry G. Cisneros in a meeting with members of The Times Washington Bureau, was developed by the AFL-CIO as part of its goal to increase the share of its pension funds invested in inner-city housing.

The money would be used to build housing and to guarantee development loans, while Cisneros’ department would provide administrative support and government-backed insurance programs to protect the unions’ investment. The AFL-CIO Housing Investment Trust and the department would jointly staff the program, which would be governed by an advisory board that has not yet been named.

Labor officials said that they pursued the housing partnership out of desire to reverse the decline of American cities and to help create jobs for their members.

“When we realized Clinton was going to be President, we felt it was important to say we were willing to step to the table,” said Marcie Cohen, director of the AFL-CIO’s affordable housing division. “But we have requirements. We have to make sure there is a market rate of return for our investments.”

Last year, the labor group invested $68 million in housing. Without Cisneros’ commitment to urban renewal in general, and to the AFL-CIO plans in particular, the federation would have had difficulty expanding its investment in housing, Cohen said. Housing and Urban Development can provide expertise and organizational support that the AFL-CIO does not have.

Labor officials said their initial pledge of at least $500 million would be used for the development of 5,000 housing units in the next three to five years.

Cisneros, however, said that he believes the number of new units can be doubled in the next few years if labor funds are combined with public and other private funds. He also said that the federation may increase its investment in the years ahead, in keeping with its objective of raising its housing investment to 10% of its pension funds, up from the current level of 3%.

One site already selected is in Opa-Locka, Fla.--an area devastated by Hurricane Andrew last year and suffering a shortage of affordable housing. The AFL-CIO has pledged to redevelop housing, provide child care and job training services and build a police station.

In another major policy shift from previous administrations, Cisneros said that he will announce new initiatives next month to step up enforcement of anti-discrimination housing laws.

By expanding the mission of HUD’s Fair Housing Division, Cisneros said, the agency will conduct national reviews of the banking and insurance industries to determine if some companies are “redlining” poorer neighborhoods by refusing to do business in them, or are “making it impossible” for low-income home buyers to get loans.

In addition to Los Angeles, Oakland and Opa-Locka, the other cities targeted for AFL-CIO housing are Atlanta; Boston; Chicago; Columbus, Ohio; Dallas; Denver; Detroit; Miami; Milwaukee; Minneapolis; St. Paul, Minn.; New Orleans; New York; Philadelphia; Portland, Ore.; St. Louis and Washington, D.C.