A STRATEGY TO STOP THE FLOW OF OUR MONEY TO BILLIONAIRES
San Diego families are feeling the squeeze from rising rents and stagnant wages, even as our own retirement savings help fuel the problem. Public pension dollars and, increasingly, 401(k) plans are being steered into private equity funds that profit from tactics like aggressive rent hikes. Here’s how that pipeline works, why it matters locally, and what San Diegans can do about it.
What’s happening with our retirement money
Pension funds are one of the largest pools of worker capital in the country—$6.1 trillion in state and local defined-benefit plans alone as of early 2024. Private equity firms, hedge funds, and venture capital managers tap those dollars, charge layers of fees, and pursue extractive strategies that prioritize short-term profits. These same firms are pushing to access workers’ 401(k)s, after a 2025 executive order opened the door to “alternative assets,” including private equity and cryptocurrency, in retirement accounts collectively valued at over $12 trillion.
When companies like Blackstone, Apollo Global Management, TPG, and Valor Equity Partners control vast streams of worker savings, they wield outsized power over housing and essential services. Their leaders are among the ultrawealthy, and their firms have used strategies—like rapid rent increases in buildings they own—that generate gains for investors while burdening communities.
Why this matters in San Diego
Reporting in 2024 found that California public pensions invested in funds managed by Blackstone that were responsible for gouging rents in San Diego. That means some of the very public workers whose retirement money is in these funds are also facing steeper housing costs because of them. Meanwhile, managers collect fees from pension funds for the privilege.
For San Diego, the implications are immediate: less stable housing for workers and retirees, displacement pressures on neighborhoods, and an ever-widening gap between investor profits and local well-being. The dynamic layers on top of an already tight housing market, making affordability solutions harder to achieve.
How unions and pension holders are pushing back
A growing movement of workers and retirees is demanding that their capital stop funding harm in their own communities. Recent examples include:
• Oregon labor organizations calling for divestment from a fund that owned Israeli spyware company NSO Group.
• AFSCME 3299, representing University of California service workers, demanding divestment from Blackstone and “housing corporations” that won’t commit to responsible landlord standards—rent freezes, no “no-fault” evictions, and safe, healthy properties—and calling for investments in truly affordable, social housing for students, employees, and the community.
• SEIU 1021 members passing a resolution to divest from weapons manufacturers, surveillance tech for military use, private prisons, border contractors, companies profiting from apartheid and colonization, and fossil fuels.
• The International Union of Painters and Allied Trades announcing pension disinvestment from the Gaza genocide.
Three strategies San Diego can use now
1) Activate members with clear information
Share plain-language summaries of where pension and 401(k) dollars are invested, what fees are paid, and how investments affect local housing and services. Identify alternatives that align with worker and community needs.
2) Organize around decision windows
Track when pension boards, trustees, or plan administrators approve managers and mandates. Mobilize members to testify, submit letters, and demand that worker capital not be funneled to firms driving rent hikes or community harm.
3) Build and fund community-benefit vehicles
Use existing labor, civic, and institutional infrastructure to create investment options that deliver stable returns while addressing local priorities—such as social and affordable housing with clear standards: fair rents, no “no-fault” evictions, and safe, healthy properties.
Two paths for San Diego’s retirement dollars
| Investment path | What it looks like | Who benefits | Likely local impact | Fee transparency |
|---|---|---|---|---|
| Status quo: private equity/housing funds | Short-term gains tied to aggressive rent hikes and financial engineering | Ultrawealthy managers and investors | Rent burdens, displacement pressures, weaker housing stability | Often complex and opaque; multiple fees |
| Community-benefit investments | Capital into social/affordable housing with clear landlord standards | Workers, students, retirees, local residents | More stable rents and safer properties; community wealth-building | Designed for accountability and mission alignment |
What San Diego residents can do
• Ask your union, pension board, or HR for a simple list of current managers, fees, and housing-related holdings.
• Request a public report on how investments affect San Diego’s housing market.
• Urge trustees to adopt responsible landlord standards and divest from managers driving rent gouging.
• Support union resolutions that prioritize community-benefit investments, including social housing.
• Attend pension board meetings; submit comments during manager selection and renewal cycles.
What to watch next
• Continued efforts by private equity to enter 401(k) menus and the response from employers and plan fiduciaries.
• New union-led resolutions tying pension dollars to housing standards and local outcomes.
• Pension board votes on manager mandates, especially those linked to rental housing in San Diego.
• Whether large institutions shift capital toward affordable, community-owned, and mission-driven housing projects.
FAQs
- Are San Diego pensions linked to rent hikes?
Reporting found California public pensions invested in Blackstone-managed funds responsible for rent gouging in San Diego. - How much money is at stake?
State and local defined-benefit pensions total about $6.1 trillion; firms are also targeting workers’ 401(k)s, collectively valued at over $12 trillion. - Which unions have taken action?
Examples include AFSCME 3299, SEIU 1021, the International Union of Painters and Allied Trades, and Oregon labor organizations pushing divestment and stronger standards. - Does divestment mean sacrificing returns?
Performance varies by strategy and manager. The movement focuses on transparency, fee discipline, and investments that align with members’ long-term interests and community well-being. - What housing standards are being proposed?
Freezing rental rates, no “no-fault” evictions, and safe, healthy properties—paired with investments in truly affordable, social housing.
Practical takeaway: Ask your plan for a plain-language investment and fee report, then push for a timeline to divest from rent-gouging managers and reinvest in San Diego–centered housing that meets responsible standards.
