Pay Dirt is a weekly foray into the pigpen of political funding. Subscribe here to get it in your inbox every Thursday.
On the campaign trail, GOP Senate candidates J.D. Vance and Blake Masters have bemoaned the housing crisis, blaming investment firms for making the United States a “nation of renters.”
But they may want to be careful about what they say; their biggest and most famous benefactor is heavily invested in the kinds of strategies that both candidates blame for driving up prices—and they both have ties to real estate investment as well.
Vance and Masters have specifically targeted BlackRock and Blackstone for scooping up homes and driving price increases across the country. Both men also have deep personal and business connections to billionaire tech mogul Peter Thiel, who has invested millions of dollars in their candidacies.
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.
Additionally, Vance himself—who last July singled out rising housing prices in his candidacy announcement speech—has helmed a fund that puts money into real estate startups, including an app that allows users to speculate on white-hot urban markets. And Masters, who worked for Thiel for years, saw his fortunes rise and fall with the man who was investing millions into these real estate startups.
Both Vance and Masters also hail from states racked by the housing crisis—Ohio and Arizona, respectively—and both men have also received campaign donations from executives playing in the same investment space they now decry. Among their benefactors? BlackRock and Blackstone.
But it’s no surprise that two men whose ideological and professional trajectories are so similar would deliver such strikingly similar rhetoric on the campaign trail.
In a Twitter thread from June 2021, Vance bashed BlackRock for “pursuing an investment strategy that will make it harder for young Americans to own homes,” adding that a realtor in his home city of Cincinnati told him the market rates there made it “nearly impossible” for first-time home buyers.
And at an Ohio campaign event in April, Vance told a Youngstown crowd that “you cannot have a real country if the most powerful Wall Street firms in the world are turning your citizens into a nation of renters, and people don’t have a stake in their own country.” Vance has also repeatedly singled out BlackRock and Blackstone’s financial ties to China.
That same month, Masters tweeted a campaign speech, captioned, “BlackRock buying up houses, China and Bill Gates buying up farmland—that is not a good future my friends.”
In the speech, Masters called prices “crazy” and “depressing,” blaming the Chinese or “someone from California” swooping in. (Masters lived in San Francisco for years before running for Senate.)
Firms like BlackRock, he said, want to create “a generation of renters.”
“This is how Wall Street thinks,” Masters added. “This is how the left thinks.”
Want a closer look inside the pockets of the government’s most powerful players? Subscribe to the Pay Dirt newsletter here for exclusive reporting every Thursday.
Typically, Wall Street is associated with corporate-friendly Republican politicians and policies. But Masters and Vance style themselves as part of an outsider conservative movement that casts corporations as antagonists, albeit with varying degrees of success.
While those firms aren’t entirely to blame for the ongoing affordability crisis, they 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 do.
“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.
“That’s a significant impact,” Dworkin observed. “When we see the single-family home first-time buyer market shrinking, and people moving into rentals, that’s a problem.”
That might not be a problem for Thiel, however.
Masters and Vance both owe good chunks of their professional and financial successes to Thiel.
When Vance graduated from Yale Law, he moved to San Francisco and worked for Thiel’s Mithril Capital. Later, Thiel ponied up seed money for Vance’s own Ohio-based investment firm, Narya Capital.
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 investment strategy as the chief operating officer at Thiel Capital, and also led the Thiel Foundation. Masters has cited Thiel not just as a mentor, but, at a November campaign event, as a “best friend—top five friends, certainly.”
Thiel has put $15 million apiece into 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.)
Over the same time period, Thiel has made multiple investments in the real estate startup sphere.
Last August, Thiel’s Founders Fund chipped in for a $75 million round of funding for Bungalow, an online residential real estate marketplace focused on rentals. Bungalow, which helps landlords raise their rental income, as Bloomberg reported, planned to put the money towards expansions into new cities, including Phoenix and Atlanta.
“Bungalow helps landlords obtain higher rental income, in part by recommending light renovations such as the insertion of walls to create additional bedrooms. Some have even bought new homes specifically to list on Bungalow, its CEO told Bloomberg.
In February, Thiel led a $17.4 million round of financing for Ember, a “real estate proptech company” for buying, owning, and renting luxury vacation property. One of its “core pillars” includes purchasing vacation homes in destination locations.
Another Founders Fund investment, Up&Up, bases its business model solely on increasing housing prices. In November, Thiel upped his stake in the startup, which uses a profit-sharing model to help tenants cash in on rising home values while they rent. According to Forbes, at the time of the new round, Up&Up had spent $50 million buying up properties in two markets—St. Louis, and the market with the most corporate investment, Atlanta.
The company’s CEO told Forbes they planned to use Thiel’s money to buy more single-family homes.
Another Thiel endeavor, Cadre, crowdfunds commercial real estate investment, and enjoys financial backing from Jared and Josh Kushner. Cadre’s founder told Fortune that the company had to make some early sales after its data system revealed that rental demand was being “driven off of the crazy spikes in [prices for] single-family homes,” forcing residents to renew leases “instead of graduating from renting to buying.”
The most well-known of these investments, however, is Airbnb. Thiel reportedly poured $150 million into the company in 2012, when it was valued at $2.5 billion. A decade later, the startup’s valuation topped $113 billion. Research has confirmed suspicions that Airbnb properties contribute to higher prices, as well as to housing shortages in stressed markets.
And another major Airbnb stakeholder is one of Vance and Masters’ top offenders: BlackRock.
While both candidates have received donations from firms or individuals engaged in real estate investment, Vance’s committees have seen more—about $40,000 so far, according to Federal Election Commission filings. Masters only has received about $15,000. About half of those Vance contributions came from executives at Blackstone, one of the firms Vance has knocked on the campaign trail for taking money from China.
That may be because Vance himself has had one eye on real estate investment.
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 nurture tech startups in underserved areas beyond the coastal meccas.
The fund has made moves in the real estate sector, including reports that ROTR would target “Opportunity Zones”—a Trump-era tax incentive that offers capital gains breaks to investors in economically distressed communities.
The jury is still out on whether Opportunity Zones increase the type of economic activity they promise, or displace residents and spur further gentrification. But the ROTR fund’s web portfolio doesn’t appear to show such investments. And the phrase “Opportunity Zones” appears absent from its most recent pitchbook and annual report.
However, at least two ROTR-backed entities appear to be focused on real estate offerings—industrial coworking startup Loloft, and Placemakr, a sort of long-term Airbnb. The fund also supports an app called Nada, which aims to democratize real estate investing by allowing anyone to speculate on the hottest city markets in the country.
According to Vance’s financial disclosures, he collects a $125,216 salary from ROTR.
Neither the Vance nor Masters campaigns replied to a request for comment.