NEW ORLEANS - The AFL-CIO plans to invest $700 million in housing and other projects to help rebuild this city left staggered by housing shortages and other infrastructure problems after Hurricane Katrina.
The money will come from the union federation's pension fund and its lenders - investments that should make money for the fund while aiding a city left hobbled by the enormous disaster, AFL-CIO President John Sweeney said in an interview Tuesday. It also will create union jobs in a region with an enormous number of construction projects.
The union planned to officially announce the investment at a news conference today.
"I was horrified that so little has been done," said Mr. Sweeney, who visited New Orleans about a month ago and saw tracts of housing left in ruin since Katrina struck Aug. 29. "It feels like it's the city that America forgot."
The investment plan includes $250 million in financing for housing construction during the next seven years, with more than 5,000 rental units expected to be built. An additional $100 million will be equity investments for commercial real estate and revitalization projects.
The AFL-CIO already has applied to get title on 200 properties controlled by the city because owners didn't pay taxes on them. Most are in the Treme neighborhood, a predominantly black working-class neighborhood adjoining the French Quarter.
An additional $250 million has been set aside for home mortgages for city employees, union members and residents of neighborhoods where AFL-CIO projects will be located.
As much as $100 million will be used to finance hospitals or nursing homes, using federally insured loans.
"Hopefully, it will jump-start some investment" from other private entities, Mr. Sweeney said.
The investment plans are similar to ones the union has executed in Chicago and New York. The AFL-CIO created a $750 million investment program in Chicago last year, mainly targeting affordable housing, and one in New York after the Sept. 11 attacks.
Such real estate investments have done well in the past, said Stephen Coyle, the chief executive of the AFL-CIO's Housing Investment Trust. They attract other investors into neighborhoods and have turned once-blighted areas into desirable real estate, he said.