How Nuveen’s Impact Sector Is Creating and Sustaining Affordable Housing Nationwide

Building on TIAA’s 30 years of supporting affordable housing on the debt side, the company’s Nuveen subsidiary is making major inroads in the sector on the equity side with its new Impact Investing initiative.

This was the topic of a discussion between Jennifer Recine, partner at Kasowitz Benson Torres LLP, and Pamela West, managing director of Nuveen’s Real Estate Impact Investing group, that was recorded at Commercial Observer’s recent State of CRE event as the latest installment of an executive video series hosted by Kasowitz Benson Torres and produced with Commercial Observer.

West said that Nuveen’s Impact initiative focuses on “deeply affordable housing.”

“The mission behind what we’re doing is to provide safe, quality, affordable housing that also helps to improve the quality of life for the residents that live in our housing assets,” said West.

When Recine talked about how Nuveen fulfills the dual goals of serving residents while preserving ROI, West said that Nuveen believes social impact drives returns in several ways.

“We implement sustainable practices across our entire real estate portfolio. When you do that, you can actually lower your expenses,” said West. “Also, a lot of these assets are currently owned by private operators, and we have scale. So we can take advantage of economies of scale and operational efficiencies that were missed over time. We’re better operators. We can drive down expenses without burdening the tenant with increasing rents.”

West then spoke about how Nuveen’s efforts in this area amount to a public-private partnership.

“One thing we’re doing is preserving existing units, because that stock is being depleted significantly,” said West. “There are 750,000 units expiring by 2030, so the first line of defense is, let’s preserve what’s out there. We have to work with local government, cities and states, and the federal government to make that happen, because we do need some sort of subsidy to help keep those rents low. That’s one aspect of it.”

West notes that Nuveen’s two-pronged approach includes not only maintaining existing units but also developing new affordable housing units.

“Our tax-credit program has been wonderful in creating units across the country, but it creates 100 percent affordable housing,” said West. “So we’re thinking about, how do we reimagine housing in a mixed-income format in a way that brings amenities and real necessities like education and health care to communities? And that definitely has to be done through a public-private partnership.”

This program, which West said is building and sustaining affordable housing in 24 states and 47 MSAs, is propelled by Nuveen’s government relations team, which opens doors to ensure that Nuveen can fulfill its ambitious housing goals throughout the country.

“Our government relations team gives us a seat at the table to the federal government, to governors, and to city councilpersons and mayors,” said West. “It’s important, because the political landscape is changing all the time, and it can take 10 years sometimes to bring these projects to fruition. We have to look at the political landscape and [figure out] who can support us throughout a project. So our government relations team makes a lot of introductions for us, and helps us create those relationships.”