On the campaign trail, Republican Senate candidates JD Vance and Blake Masters have complained about the housing crisis and blamed investment firms for turning America into a “renter nation.”
But they may want to be careful what they say. Their biggest and most famous benefactor is heavily invested in the companies both candidates blame for driving up prices, and both also have ties to real estate investing.
Vance and Masters have specifically targeted BlackRock and Blackstone to pick up houses and drive price increases across the country. Both men also have deep personal and business connections to billionaire tech mogul Peter Thiel, who has poured millions of dollars into his candidacy.
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But Thiel has also invested heavily in several real estate startups whose business models include buying homes and putting upward pressure on prices and rents, including BlackRock-backed Airbnb.
Furthermore, Vance himself, who last July highlighted rising home prices in his candidacy announcement speech—He has run a fund that pours money into real estate startups, including an app that lets users speculate on hot urban markets. And Masters, who worked for Thiel for years, saw his fortunes rise and fall with the man who was pouring millions into these new real estate ventures.
Both Vance and Masters also come from states racked by the housing crisis, Ohio and Arizona, respectively, and both men have also received campaign donations from executives who play in the same investment space they are now denouncing. Among his benefactors? BlackRock and Blackstone.
But it’s no surprise that two men whose ideological and professional backgrounds are so similar would utter strikingly similar rhetoric on the campaign trail.
on a twitter thread since June 2021, Vance criticized BlackRock for “pursuing an investment strategy that will make it difficult for young Americans to own homes,” adding that a real estate agent in his hometown of Cincinnati told him that market rates there were making it out “almost impossible” for first-time homebuyers.
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And at a campaign event in Ohio in April, Vance told a Youngstown crowd that “you can’t have a real country if the world’s most powerful Wall Street firms are turning their citizens into a nation of tenants, and people have no interest in their own country.” Vance has also repeatedly pointed out BlackRock and Blackstone’s financial ties to China.
That same month, Masters tweeted a campaign speech, subtitled, “BlackRock buying houses, China and Bill Gates buying farmland, that’s not a good future, my friends.”
In the speech, Masters called the prices “crazy” and “depressing,” and blamed the Chinese or “someone from California” (Masters lived in San Francisco for years before running for Senate).
Firms like BlackRock, he said, want to create “a generation of tenants.”
“This is how Wall Street thinks,” Masters added. “This is how the left thinks.”
Wall Street is generally associated with pro-business Republican politicians and policies. But Masters and Vance present themselves as part of an outside conservative movement that casts corporations as antagonists, albeit with varying degrees of success.
While those companies they are not entirely to blame for the current affordability crisis, have certainly contributed.
David Dworkin, president and CEO of the National Housing Conference, explained that national numbers don’t tell the story as well as local numbers.
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“Ground zero on this is Atlanta,” Dworkin told The Daily Beast, citing an increase in the share of single-family home investor purchases, which he said is now nearly 43 percent.
“Phoenix is top of the list,” he said, pegging the same share for the Phoenix-Scottsdale metro area at just under 37 percent.
“That’s a significant impact,” Dworkin observed. “When we see the first-time buyer market for single-family homes shrink and people move into rentals, that’s a problem.”
However, that might not be a problem for Thiel.
Masters and Vance owe much of their professional and financial success to Thiel.
When Vance graduated from Yale Law, he moved to San Francisco and worked for Thiel’s Mithril Capital. Thiel later provided seed capital for Narya Capital, Vance’s Ohio-based investment firm.
Masters is even closer to Thiel, whom he met while studying at Stanford Law. Thiel took him under his wing and the two co-wrote a book based on Thiel’s Stanford lectures. Masters helped shape the investment strategy as chief operating officer of Thiel Capital and also led the Thiel Foundation. Masters has cited Thiel not only as a mentor, but, at a November campaign event, as a “best friend, top five friends, hands down.”
Thiel has invested $15 million each in super PACs backing Vance and Masters. And until recently, Masters still held his positions at Thiel Capital and the foundation. (He resigned from Thiel Capital in March, following criticism that he had been promoting his own companies on the campaign trail.)
During the same time period, Thiel has made multiple investments in the field of real estate startups.
Last August, Thiel’s Founders Fund provided a $75 million funding round for Bungalow, an online residential real estate marketplace focused on rentals. Bungalow, which helps landlords increase their rental income, according to Bloomberg reportedhe planned to spend the money on expansions to new cities, including Phoenix and Atlanta.
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“Bungalow helps landlords earn higher rental income, in part by recommending light renovations, such as inserting walls to create additional bedrooms. Some have even bought new homes specifically to list Bungalow, its CEO told Bloomberg.
In February, Thiel led a $17.4 million funding round for Ember, a “proptech real estate company” to buy, own and rent luxury vacation properties. One of its “central pillars” includes the purchase of vacation homes in destinations.
Another Founders Fund investment, Up&Up, bases its business model solely on rising home prices. In November, Thiel increased his stake in the startup, which uses a profit-sharing model to help renters take advantage of rising home values while renting. According to ForbesAt the time of the new round, Up&Up had spent $50 million buying properties in two markets: St. Louis, and the market with the largest corporate investment, Atlanta.
The company’s CEO told Forbes that they planned to use Thiel’s money to buy more single-family homes.
Another Thiel effort, Cadre finances commercial real estate investments and enjoys financial backing from Jared and Josh Kushner. The founder of Cadre said Fortune that the company had to do some early sales after its data system revealed that rental demand was being “rejected from crazy spikes in [prices for] single-family homes,” forcing residents to renew leases “instead of going from renting to owning.”
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However, the best known of these investments is Airbnb. Thiel reportedly invested $150 million in the company in 2012, when it was valued at $2.5 billion. A decade later, the valuation of the startup exceeded $113 billion. Research has confirmed suspicions that Airbnb properties contribute to higher prices as well as housing shortage in stressed markets.
And another major Airbnb shareholder is a major Vance and Masters violator: black rock.
While both candidates have received donations from real estate investors or companies, Vance’s committees have seen more — about $40,000 so far, according to filings with the Federal Election Commission. Masters has only received about $15,000. About half of those Vance contributions came from executives at Blackstone, one of the firms Vance called out on the campaign trail for taking money from China.
That may be because Vance himself has had an eye on real estate investing.
In 2017, Vance took over a new investment fund called Rise of The Rest, a massive project led by AOL co-founder Steve Case that aims to foster tech startups in underserved areas beyond coastal meccas.
The fund has made movements in the real estate sector, including reports that ROTR would target “Opportunity Zones,” a Trump-era tax incentive that offers capital gains benefits to investors in economically distressed communities.
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The jury is still out on whether Opportunity Zones increase the kind of economic activity they promise, or displace residents and spur further gentrification. But the ROTR fund web portfolio does not appear to show such inversions. And the phrase “Zones of Opportunity” appears absent from his most recent tone book Y annual report.
However, at least two ROTR-backed entities appear to be focused on real estate deals: industrial coworking startup LoloftY position marker, a kind of long-term Airbnb. The background also supports an app called anywhose objective is to democratize investment in real estate by allowing anyone to speculate in the most popular urban markets in the country.
According to Vance’s financial disclosures, he earns a salary of $125,216 from ROTR.
Neither the Vance nor Masters campaigns responded to a request for comment.
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