Friday, February 03, 2023

Local authority pension fund investment in affordable housing: is there a case for doing more? APPG 22 Feb 23

I am speaking at this virtual APPG event and looking forward to debating this key topical issue. Can local authority pension funds invest in "affordable" homes and still make an appropriate return? 

The terms "affordable" and of course "social" housing are in my view misused and arguably meaningless. Sub market rents are obviously better than market rents but very often they are "unaffordable" to so many in housing need. 

The Government interference into investment decisions and governance by Local Authority pension funds is also of concern. Will they try and force funds to invest into possible vanity infrastructure projects?  

While I believe that residential housing can be a very appropriate asset class (type of investment) for pension funds, if we want subsidised truly "affordable" or dare I say "social" rents (40-50% below most market rents) then we need subsidy from someone to bring rent levels down. This is not rocket science.

It is not only about rent levels but if you provide homes you also have to consider housing management standards, benefit allowances, security of tenure and meaningful resident participation.



Paddy Dowdall (Assistant Executive Director at Greater Manchester Pension Fund)

Helen Collins (Head of Affordable Housing, Savills)

Cllr John Gray (Vice-Chair, Local Authority Pension Fund Forum)

John Butler (Finance Policy Lead, National Housing Federation)

Chair: Clive Betts MP

I am delighted to invite you to attend the next meeting of the APPG for Local Authority Pension Funds which will focus on local authority pension fund investment in affordable housing.

Local government pension funds have steadily increased their investment in place-based impact investments, which include both new and refurbished affordable housing. Most of the investment - from build to rent and shared ownership to temporary accommodation and specialist housing - is through co-investment partnerships and special purpose delivery vehicles with investment companies, charities and private and social housing providers.

Some have called for LGPS funds to further scale up investment in alternative assets and invest more in affordable housing. The Government is also calling on the LGPS to increase local investment and the chancellor has stated that the government will consult on requiring LGPS funds to consider illiquid asset investment opportunities.

This Zoom event will discuss what has been achieved and what more could be done to maximise investment opportunities. It will examine recent experience and best practice and explore the constraints and barriers to investing in affordable housing.

This meeting will be held online, if you want to attend please register here.

Best wishes

Clive Betts MP

Chair, APPG for Local Authority Pension Funds

Sent by the Secretariat of the APPG for Local Authority Pensions Funds which is sponsored by the LAPFF

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