Local authority pension fund investment in affordable housing

This meeting of the APPG for "Local Authority Pension Funds was focused on local authority pension fund investment in social and affordable housing. To address the issue and whether there is a case for doing more, the event heard from four speakers: Cllr John Gray (Vice-Chair, Local Authority Pension Fund Forum); Paddy Dowdall (Assistant Executive Director at Greater Manchester Pension Fund); Helen Collins (Head of Affordable Housing, Savills); and John Butler (Finance Policy Lead, National Housing Federation)". Chaired bt APPG Chair, Clive Betts MP.

Check out YouTube of yesterday's panel debate/Q&A. An interesting panel and some great questions. Hopefully, my "ums" and "ers" were not too annoying (and to my continuel surprise on video my accent is still so northern/scouse after all these years down south). 

My message was that Council pensions funds can invest in so called "Affordable" Housing and get a appropriate return from sub market (60-80%)  rents which are good quality, low carbon, well managed homes but low income families in high rent areas need social rents (40-50% of private rents) or they will spend their lives on benefits and in poverty. 

To provide social rents you need subsidy. In the main, this has to come from the government of the day. You cannot expect tenants to receive inadequate housing services from their landlord in order to provide subsidy to build new homes. 

I posed the question at the end of the debate on whether housing associations, advisors and "for profit" provisors, understand that in all probability, in 18 months time or so, there will be a new government in power (not taken for granted for a moment) which may be quite different from the one in power for the previous 15 years? I think not. 

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.

Hat tip Inside Housing for great picture

ONLINE EVENT – REGISTER HERE

SPEAKERS

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

What does "Just Transition" mean in practice? We cannot deliver on climate change unless we have justice and fairness...?

 

Last Wednesday I attended the launch and first evidence session of the All Party Parliamentary Group for Local Government Pension Funds and its inquiry into ‘Responsible Investment for a Just Transition’. The meeting was chaired by Clive Betts MP. 

From the invite:-

"As you know, climate change is a threat to lives and livelihoods, and presents systemic risks to the economy and financial markets and to our future prosperity. Shifting to a net zero economy has the potential to create new jobs and drive economic growth. However, the benefits may not be felt evenly with some employees and communities bearing the brunt of industrial change. This not only risks creating economic hardship for some but also undermining support for the shift to net zero (my empathises).

Ahead of the UN climate change conference in Glasgow in 2021, the APPG inquiry will take evidence - and then compile a final report - setting out recommendations to UN agencies, national, devolved and local government, policymakers, business and investors, about how the risks that climate change poses can be avoided in a just way. Over the first half of 2021 the APPG will hear a wide range of perspectives on the issue and, in particular, answers to the following questions:

· What is a just transition is and why does it matter?

· What initiatives would help ensure a just transition

· What action you would like to see investors and government take on this agenda?

The APPG for LAPF believes that it has the opportunity to shape the national agenda on the just transition to a net zero future, and wishes to hear from as many voices as possible".

In response to a question what Local Government Pension funds can practically do to support "Just Transition" I suggested that they should support actively engage with companies they own to ensure that they follow the International Labour Organisation (UN) principles on Trade Union recognition and collective bargaining. No justice No Transition.