Lund, Christopher

Christopher Lund is Director of Communications for the Fair Rent Coalition in East Palo Alto.

Investment Policy Changes At California’s Public Pension Funds: Is Internal Reform Enough?

By Christopher Lund

Following the introduction of AB 2337 (the Socially Responsible Investment Act) by Assemblymember Tom Ammiano, CalPERS and CalSTRS recently proposed changes in their real estate investment policies with the goal of avoiding future investments in deals that rely, or result in, the displacement of residents in affordable housing, a practice commonly referred to as “predatory equity”.

Predatory equity is an inherently risky form of real estate speculation in which investors pay more for rent-regulated housing than can be justified by the actual rental income at the time of purchase. The business model is predicated on the eviction and harassment of tenants so that rents can be significantly raised through vacancy decontrol or so that properties can be converted to other uses such as condominiums.