Top public pension boss accused by critic of misleading stakeholders in annual address

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The chairman and CEO of one of Canada’s largest public pension funds has been accused by a US critic of giving false information about a controversial investment at the fund’s annual public meeting last week.

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The allegation comes after more than a year of controversy over the ethics and investment choices of the public sector Pension Investment Board (PSP), the $205 billion Crown corporation that manages the retirement funds of most federal employees.

During the pandemic, critics have attacked PSP management for its continued ownership of the fund of Revera, one of the nation’s largest operators of private long-term care homes. And earlier this year, PSP sold its shares in two US private prison companies following a call from the Public Service Alliance of Canada.

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But in an online meeting with fund stakeholders last week, PSP’s top executive, Neil Cunningham, defended another controversial investment — a $700 partnership with Pretium Partners, a New York hedge fund, to develop single-family rental housing (SFR). million (US) deal. in the United States of America.

Pretium is already one of America’s largest operators of SFR housing, a model that some critics say is inherently biased toward poor outcomes for tenants, especially in minority neighborhoods. During the pandemic, Pretium has been accused of attempting to evict thousands of residents, including a disproportionate number in the majority of Black counties in the US.

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But on the call last Tuesday, Cunningham defended Pretium’s record.

“We were surprised by the controversy that, if you want, was raised here because we see it is very similar to other multi-family apartment rentals,” he said. “We did our due diligence on the business and the operator. And we are confident that best practices have been employed across the board. When controversy arose about high levels of evictions in the portfolio, we explored this with our managers and found no red flags regarding the practices the manager was doing. We did not see any racial profiling. In fact, the manager does not have the racial profile of any of his tenants on his record.”

Cunningham further stated that “there has been no eviction of tenants who had CDC declarations (which are required to prove hardship under eviction for nonpayment of rent under CDC’s national moratorium), either that During the period when eviction was not allowed and subsequent termination.And we are tracking and no eviction notice has been issued during June and July.

That last claim baffled Jim Baker, executive director of the Private Equity Stakeholders Project, an American advocacy group, who believes it to be plainly and outright false.

“I don’t know what planet he was talking to, but it’s completely out of reality,” Baker said. “Pretium filed to evict hundreds of residents in June and July, which they said was no filing.”

Baker’s organization is tracking evictions in several dozen counties in six US states during the pandemic. From that sample alone, they counted 380 eviction filings in U.S. courts by Pretium-owned companies in June and July.

“I just re-heard the audio of Neil Cunningham’s comments and they are completely wrong,” Baker wrote in a followup email.

In a statement, the PSP’s senior advisor, external communications, Verena Garofalo, said Cunningham “did not deliberately mislead participants.”

She did not reiterate Cunningham’s claims that there were no eviction filings at all during June and July or that any Pretium tenants had never been evicted with the CDC declaration.

Instead, it clarified: “With the assurance of the premium, the PSP is confident that from mid-June to the present day, there were no eviction filings on any resident covered by a valid CDC declaration for non-payment of rent.” and no resident is covered by a CDC declaration. Has never been evicted from pretium homes for non-payment of rent. was due to reasons unrelated to non-payment.

The CDC eviction moratorium was only partial. Landlords were still free to evict for reasons other than non-payment of rent, which the Pretium has done and continues to do, which Cunningham initially insisted in the meeting.

“It doesn’t negate the fact that they were evicting people,” said Nemoy Lewis, an assistant professor at Ryerson University who studies the effects of housing policy on black communities.

But Cunningham’s comments on the eviction weren’t the only ones seized by critics after his public gathering.

Martyn August, an assistant professor in the School of Planning at the University of Waterloo and an expert in financial housing, said she was impressed by the way she talked about “racial profiling.”

August said, “Pretending to understand how their business strategy is disproportionately taking money out of black renters is appalling, especially when you have evidence, clear evidence, showing that black renters are being evicted. Used to be.”

According to another study conducted by Baker’s organization, Pretium has filed for evictions of residents in select majority-Black counties at more than seven times the rate of majority-White people.

“I don’t know how you can be told that and then deny that this investment strategy has racist implications,” August said. “I’m not sure how much we expect to suspend disbelief as it may be tempting for PSPs to make money like this, but really they should acknowledge that this is wrong and exit the partnership.” “

Garofalo did not address the essence of Cunningham’s comments on the breed in his statement. Nor did she talk about the allegation that Pretium’s eviction filing had an adverse effect on black tenants. She added that “Pretium is committed to providing equal rental opportunities and support to all of its residents and does not track the race, gender or ethnicity of any of its residents.”

Pretium has long fought against its critics, including Baker and private equity stakeholder Project, which it has accused of pursuing a “definitely biased agenda” based on false information.

“As we have said before, no resident covered by a CDC declaration has ever been evicted from Pretium homes for non-payment of rent, and Pretium residents covered by valid CDC declarations have never been evicted. CDC continues to respect the moratorium,” a company spokesperson said. E-mail. (He did not address evictions for reasons other than non-payment of rent.) “During the Covid-19 crisis, Pretium has provided more than $60 million in assistance to thousands of residents, including rent waivers and resettlement assistance. Despite these false and false allegations, we stand by our commitment and continue to provide more support for residents every day. “

But for Nimoy Lewis, that defense ring is hollow. Even though Pretium has never evicted a single resident with a valid CDC declaration, that doesn’t mean the firm’s companies haven’t tried to evict or successfully evict anyone to be covered by the moratorium. Should have been, he said.

“They might not even know they need to file a CDC declaration,” he said. “If they lose their jobs and can’t pay rent, they probably don’t have access to cable television, maybe they don’t have access to the internet and maybe even that information, isn’t well circulated in the black community. happened. .”

And for Lewis, all talk of best practices and due diligence doesn’t negate the fact that Pretium is still trying to evict residents, even now, 20 months into the pandemic. “Evicting people … regardless of any other circumstance, I think, is cruel,” he said. “But in a pandemic, I think it’s really brutal.”

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Richard Warnica is a Toronto-based business feature writer for Star. Reach him via email: [email protected]
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