Republican frontrunner Kelly Ayotte is facing criticism from both sides of the aisle over her role on the Blackstone board of directors. Joyce Craig and Chuck Morse blame the global investment firm for soaring rent prices and accuse Ayotte of benefitting from inflated profits.
But experts are shooting down the attacks as economic nonsense, feeding a false narrative from anti-free-market activists.
On Tuesday the Union Leader published a front-page story about Blackstone — “the nation’s largest landlord” — and Ayotte’s $150,000 a year position on the board. The article quotes a prominent socialist who served as UN Special Rapporteur on the Right to Housing claiming Blackstone and other private equity firms are manipulating the housing market.
Ayotte’s opponents pounced.
“Residents across our state are struggling to pay rent and are finding it impossible to buy a home. Rather than work to address this housing crisis, Kelly Ayotte has made millions of dollars profiting off of it,” said Democratic gubernatorial candidate Joyce Craig.
Republican Chuck Morse joined in, releasing a statement regarding “Kelly Ayotte’s deep corporate ties to Blackstone and other multi-international companies.
“Voters deserve to know where Kelly Ayotte’s loyalty truly lies: in a corporate boardroom or with the families of New Hampshire,” Morse continued, adding Blackstone is “one of the key contributors to the housing crisis plaguing communities across the nation.”
Ayotte and her allies dismissed the attack as “Soros-funded, left-wing BS,” as her spokesperson John Corbett called it. Ayotte backer state Rep. Dennis Mannion (R-Salem) said it was proof Ayotte is the clear frontrunner in the race.
“Chuck Morse, Joyce Craig, and Cinde Warmington targeting Kelly with the same false attacks on the same day doesn’t shock me in the least,” Mannion said. “It’s been clear from day one of this race that Kelly is the one to beat, and neither Morse nor the Democrats are playing in the same league.”
While targeting Ayotte and Blackstone may or may not be smart politics, economists tell NHJournal that, either way, it’s lousy math. There’s no connection between Blackstone — or any other private company — and America’s current housing shortage.
“The housing market, like any other market, operates under the laws of supply and demand. For decades, the U.S. has underbuilt housing, resulting in a shortfall of millions of units,” says Tobias Peter, co-director of the Housing Center at the American Enterprise Institute.
Peter acknowledged that “the problem facing renters is real,” but he points to the market disruptions from the COVID pandemic.
“From 2016 until the onset of the pandemic, rents increased at an average annual rate of 4 percent. This trend was significantly disrupted during the pandemic, with rents spiking by an average of 13 percent in 2022,” Peter said.
And then there’s the basic math.
There are about 146 million rental housing units in the United States. Blackstone owns less than one percent of them. In fact, the five largest property investment companies combined own about 330,000 single-family rentals, or about 2.4 percent of all single-family rentals.
The company owns just three properties in New Hampshire.
“Housing inventory is near all-time lows, but big institutional investors like Invitation Homes or BlackRock aren’t to blame,” housing expert Logan Mohtashami wrote at the mortgage news site Housingwire. “There is nothing in the data to show that Wall Street has been the big buyer of homes in the U.S. since 2000.”
Drew Cline, president of the Josiah Bartlett Center for Public Policy, dismissed the attack as “silly.”
“The first question to ask is why institutional investors are attracted to housing markets. That is, why do investors see apartments and homes as a safe investment? It’s because local land use regulations have effectively shielded existing housing from competition by making it so hard for developers to increase supply. Investors are responding to a government-created supply shortage. They didn’t cause that shortage, or the price spike that it created. This is a rather silly attack that shouldn’t be taken seriously.”
Blaming big business for high prices is nothing new in Democratic politics. Both Presidents Bill Clinton and Barack Obama launched federal investigations when gas prices spiked on their watch. Both investigations found the same thing: market forces like the global price of oil were largely responsible for the retail cost.
The Biden-Harris administration has been trying to do the same, blaming “greedflation” and “shrinkflation” for grocery prices that are 20 percent higher than when they took office. But a Fed study released in May found it’s simply not true.
“Data for the current recovery show that the increase in corporate profits is not particularly pronounced compared with previous recoveries,” according to the San Francisco Fed. “Markups also have not played much of a role in the slowing of inflation since the summer of 2022.”
That’s not expected to stop Vice President Kamala Harris from blaming higher prices on alleged corporate “price gouging” when she announces her economic policies on Friday.
And New Hampshire Democrats have a press conference scheduled for Thursday morning where they are expected to continue their criticism of Ayotte.
But Chuck Morse isn’t a progressive Democrat, he’s a conservative Republican. Why is he attacking Ayotte for her work in the private sector and denouncing her “corporate paymasters?”
Mannion thinks he knows.
“This just further proves it’s Kelly Ayotte versus the world,” Mannion said. “And my money is on Kelly.”
