NYC Comptroller Lander and Pension Trustees Announce Adoption of First in the Nation Housing Standards for Private Real Estate Investment Portfolio

 

Responsible Property Management Standards will apply to billions of dollars in prospective private real estate equity funds & help ensure residential properties the System invests in are maintained & operated to consistent standard of quality

New York City Comptroller Brad Lander and trustees of the New York City Employees’ Retirement System (NYCERS) today announced the adoption of historic new standards for prospective investments in their private real estate investment portfolios. The Responsible Property Management Standards (RPMS), now a part of the NYCERS investment policy, are designed to ensure that the System’s asset managers are supporting and encouraging fair practices towards residents living in properties asset managers own or fund on behalf of the System.

Today’s announcement is the newest development in NYCERS’ investment strategy. Consistent with investors’ fiduciary duties, the policy aims to improve the long-term quality and sustainability of residential rental real estate investments and reduce housing instability for residents, while providing sufficient flexibility to manage investment risks and attain target financial returns.

“Delivering strong returns for our members and beneficiaries requires that the asset managers responsible for investing our dollars are doing right by the people they serve,” said Comptroller Lander. “Failing to acknowledge the legal and reputational risks brought on by shoddy property management practices in an attempt to make a quick buck is unacceptable and not only threatens the welfare of millions of rental tenants across the country but is inconsistent with NYCERS’ investment objective of achieving long-term, sustainable returns. I’m grateful to my fellow New York City Employees’ Retirement System trustees, my office’s Bureau of Asset Management, and the many asset managers and consultants we worked with to build a set of truly robust and effective standards that should serve as a model for investors across the country.”

The policy was developed in conjunction with For the Long Term with funding from the Ford Foundation. There was an extensive process over the course of nearly two years, in partnership with trustees and many stakeholders, including NYCERS’ residential real estate managers and consultants, tenant advocacy and policy groups, real estate market experts, and industry associations.

There is no set uniform standard or regulation for property management practices in residential real estate across the country. Rather, a set of inconsistent patchwork landlord-tenant laws are in place. The lack of robust standards poses a variety of risks for investors including higher capital and operating costs associated with low resident satisfaction, higher turnover rates, difficulties retaining management employees, and a growing array of regulatory and reputational challenges.

NYCERS has an interest in the living conditions of residents in properties owned or funded by asset managers selected by the System, and implementing a uniform set of standards for quality property management protects the long-term sustainability and profitability of rental housing market investments.

The standards are organized around seven principles, as follows:

1. Implement consistent and fair tenant screening and selection practices;
2. Offer clear and fair leases; reduce undue burdens of security deposits;
3. Maintain safe, quality, accessible housing;
4. Foster positive tenant-landlord relations;
5. Honor tenants’ rights to free speech and free association;
6. Optimize tenant stability; and
7. Minimize evictions and other negative exits.

For a full breakdown of the Standards, please visit our website.

“Real-estate investment cannot succeed without thriving communities,” said Bryan Berge, representative of Mayor Eric Adams, chair of the Board of Trustees of the New York City Employees’ Retirement System. “And communities cannot thrive when tenant harassment, discriminatory screening, and other unethical conduct goes unchecked.  These Responsible Property Management Standards will safeguard the conditions and values—fairness, respect, and equality—that make productive investment possible.”

“As a NYCERS Trustee, I am proud to support the adoption of first-in-the-nation housing standards for our System’s real estate investment portfolio. Many New Yorkers are renters, as are also NYCERS members and a large part of District Council 37 as well. By holding our real estate managers to industry-leading standards of landlord-tenant relations, tenant stability, and other highly desirable measures of excellence, NYCERS will protect the housing security of thousands of people while enhancing the value of its housing investment,” said Henry Garrido, Executive Director of District Council 37.

In addition to Comptroller Lander, the trustees of the New York City Employees’ Retirement System are as follows:

New York City Employees’ Retirement System (NYCERS): Mayor Eric Adams’ Appointee Bryan Berge, Director, Mayor’s Office of Pension and Investments; New York City Public Advocate Jumaane Williams; Borough Presidents: Mark Levine (Manhattan), Antonio Reynoso (Brooklyn), Donovan Richards Jr. (Queens), Vito Fossella (Staten Island), and Vanessa L. Gibson (Bronx); Henry Garrido, Executive Director, District Council 37, AFSCME; Richard Davis, President Transport Workers Union Local 100; and Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.