New York City is turning to its $320B pension funds as it seeks ways to accelerate development amid a prolonged housing crisis.

Five pension plans serving the city’s firefighters, teachers, law enforcement and public employees plan to invest $1B a year over the next four years in affordable housing, NYC Comptroller Mark Levine announced Thursday. The Comptroller's Office manages the pension funds' investments in real estate.

The $4B commitment will more than double the size of the city's five public pension funds’ housing investment exposure, which was around $2.8B at the end of 2025. The pool of potential developments has grown since the passage of the City of Yes citywide rezoning in late 2024.

“Too many New Yorkers are struggling just to keep a roof over their heads,” Levine said in a statement. “We’ve advanced critical zoning changes, but without financing, housing doesn’t get built.”

The NYC Housing Investment Initiative will deploy capital from the city’s five pension funds to develop and preserve affordable housing and support office-to-residential conversions. The pension funds have helped create or preserve 199,000 affordable housing units since the 1990s, the Comptroller's Office said.

Levine announced the initiative’s first investments, which span a combined $1.25B.

He directed the comptroller's Bureau of Asset Management to bring $750M of investments in preservation, mixed-income affordable housing development and office conversions to the pension funds’ boards for approval.

Another $500M would go toward expanding the Public Private Apartment Rehabilitation program, with nonprofit Community Preservation Corp. administering the program and acting as a servicer. Those funds, geared toward housing construction, preservation and rehabilitation, would have a 36-month interest rate freeze and 40-year amortization.

The initiative will also seek out additional investment opportunities financing large multifamily and affordable housing developments to recommend to the AFL-CIO Housing Investment Trust.

“Comptroller Levine’s $4 billion commitment represents a historic step in mobilizing the pension funds to address New York City’s housing crisis,” CPC CEO Rafael Cestero said in a statement. “This initiative sets a powerful model for how public capital can drive real impact.”

Some previous affordable housing investments by the pension funds have turned sour. In 2013, the pensions invested $500M, including $300M in a fund managed by Related Cos., in repairing affordable housing in the aftermath of Superstorm Sandy.

While the investments targeted a 9% to 12% return, losses from the Related investment alone totaled more than $127M as of last year, a Bisnow analysis found. The losses didn't wind up impacting retirees because of soaring profits from the stock market.