Thursday, April 22, 2010
Assembly Committee Approves Ammiano Bill to Stop Pension Funds From Investing in Real Estate Schemes that Displace Tenants
Yesterday, the Socially Responsible Investment Act, AB 2337 (Ammiano), cleared the Assembly Employees, Retirement, and Social Security Committee. The bill would ban predatory equity investments by the state’s public employee pension funds. The Assembly PERS Committee voted 4-2 to advance the bill.
"Today’s vote is vindication for the thousands of tenants who were unjustly evicted with the use of public funds,” said Assemblymember Tom Ammiano (D-San Francisco), author of the bill. “We unfortunately cannot undo what has happened but moving forward, our public pension funds have a fiscal and moral duty to make socially responsible investments and this bill makes those values a reality.”
The legislation is co-sponsored by Tenants Together and the East Palo Alto Fair Rent Coalition in an effort to stop predatory investments that seek to generate short-term profit through the displacement of tenants. Public pension funds have been a major source of funding for these “predatory equity” schemes that have displaced thousands of tenants and squandered hundreds of millions of dollars in retirement funds.
According to Dean Preston, Executive Director of Tenants Together, "Our goal is to make sure not another dime of public employee retirement funds is invested in these mass-eviction schemes. This committee vote brings us one giant step closer to that goal.”
Earlier this week, CalPERS, the nation’s largest public employee pension fund, adopted a policy to ban investments in real estate deals that are premised on displacing tenants. Ammiano and the bill sponsors commended the pension fund for making progress on the issue, but argued that legislation remains necessary to enact a stronger policy with the force of law.
SEIU State Council’s Terry Brennand testified in support of AB 2337. SEIU’s support is particularly important as the union represents CalPERS members. The California Teachers Association, which had opposed the bill until today, withdrew its opposition at the hearing. CalPERS representatives also testified at the hearing, but took no position on the legislation.
Tenants from East Palo Alto, a city that has been devastated by the investments at issue, came to the hearing in Sacramento to provide powerful statements in support of the bill.
Photo by Daryl Hunt.