Sinema Claimed Corporate Investment As Beneficial to Housing, But the Facts Show Corporate Investors Have Fueled Arizona’s Housing Crisis
Today, in a new profile of Kyrsten Sinema in The New York Times, the Senator once again defends her well documented ties to the private equity sector:
Sinema’s rationale for supporting private-equity firms is rooted in the economic growth of Arizona, which, she claims, depends on affordable-housing construction that is underwritten by such firms. “So to me, it makes no sense to disincentivize the supply side of creating that affordable housing in multifamily units,” Sinema told me.
But as the profile makes clear, experts say that argument does not carry water:
I asked Arthur C. Nelson, emeritus professor of urban planning and real estate development at the University of Arizona, whether the carried-interest loophole was crucial to his state’s real estate economy…. “The logic is nonsense,” he said. Closing the loophole and using the revenue on homeowner and builder subsidies “would generate more housing than simply reducing taxes.”
Sinema won’t admit it, but the truth is that private equity has fueled Arizona’s housing crisis. In fact, corporate investors bought up over 30% of Arizona’s available single-family homes in 2021. That’s a higher rate than almost every other state, according to Pew research.
The cost of homes in Arizona, as well as rental rates, are soaring. Democrats and Republicans agree that the housing shortage in the state has reached “crisis levels.” Experts say the housing crisis is a “growing cancer” and cite home purchases by corporate investors as a major factor in the explosion of home and rental prices in Arizona.
Meanwhile, Senator Kyrsten Sinema has received over $1.5 million in campaign contributions from the real estate industry, including $100,000 in the first quarter of this year. This is in addition to the nearly $1 million she raised from the financial industry last quarter, including private equity – much of which is heavily engaged in real estate speculation and is fueling the housing crisis by buying up affordable housing.
These industries’ access to huge sums of cash (helped along by favorable tax loopholes protected by Sinema) has allowed them to profit at the expense of potential homeowners and renters who have seen their American dream pushed out of reach.
“Kyrsten Sinema takes millions from the wealthy real estate developers and Wall Street firms that are driving up housing prices while Arizonans struggle just to find a place to live,” said Luis Avila, an advisor for Replace Sinema and a longtime Arizona community organizer. “It’s no surprise that there’s no end in sight for this crisis when we have politicians like Sinema who side with the corporations getting rich off of everyday people.”
Sinema’s Industry Ties:
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Sinema’s Campaign Accepted Over $100,000 From Employees And PACs Of The Real Estate Industry in Q1 2023. According to an analysis of her first quarter 2023 FEC filing, employees and PACs associated with the real estate industry contributed $100,730 to Sinema’s campaign committee. [FEC.gov, accessed 4/16/23]
- Sinema’s Federal Campaigns Had Previously Accepted Over $1.4 Million From Employees And PACs Of The Real Estate Industry. According to an analysis by Open Secrets, employees and PACs associated with the real estate industry contributed $1,408,000 to Sinema’s federal campaign committees from 2017 to 2022.
- Sinema’s Campaign Accepted Nearly $1 Million In New Contributions From The Financial Industry. According to an analysis of her first quarter 2023 FEC filing, employees and PACs associated with the financial industry contributed $967,962 to Sinema’s campaign committee. [FEC.gov, accessed 4/16/23]
- Sinema’s Federal Campaigns Had Previously Accepted Over $3 Million From Employees And PACs Of The Financial Industry. According to an analysis by Open Secrets, employees and PACs associated with the financial industry contributed $3,106,398 to Sinema’s federal campaign committees from 2017 to 2022.
Arizona’s Housing Crisis Driven By Corporate Investors:
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The cost of homes in Arizona, as well as rental rates, have soared in recent years: “The median sale price for a Phoenix home rose from $325,000 in January 2021 to $404,300 by October 2021, a 24.4% increase. The average rental property, in real dollars, was $1,034 in 2017. Today it’s $1,537 — and that’s expected to rise to $2,475 in five years if demand continues to outpace supply.”
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Experts cite home purchases by corporate investors as a major factor in the explosion of home and rental prices in Arizona. Real estate investors bought up over 30% of Arizona’s available single-family homes in 2021, according to Pew research. That’s a rate higher than in any other state except Georgia.
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“The Sun Belt also appealed to investors because there are fewer statewide restrictions than in a state such as California, which heavily regulates landlord-tenant issues.” [Pew]
Some Of The Investors Buying Up Home And Rental Properties Are Among Sinema’s Top Donors
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Blackstone, the largest owner of commercial real estate in the world, has expanded its portfolio of rental housing.
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Blackstone invests in Arizona real estate via Home Partners of America and other subsidiaries.
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Blackstone previously owned Invitation Homes, which was “accused of providing substandard living experiences, excessive rent increases, and other questionable business practices.” Invitation Homes owns single family homes in Arizona. Blackstone took the property public in 2017 and then sold off its remaining shares for $1.7 billion.
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Blackstone employees contributed $286,850 to Sinema in the first quarter of 2023.
Sinema Saved the Carried Interest Loophole
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Sinema’s efforts to save the carried interest loophole, which primarily benefits private equity, are well documented.
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The carried interest loophole particularly benefits wealthy real estate investors.
Sinema’s Abysmal Record on Housing Costs
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Sinema voted yes on legislation that could lengthen affordable housing waiting lists, and which was opposed by the National Low Income Housing Coalition.
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Sinema supported legislation that made “harmful changes” to the Dodd-Frank Act that would weaken a ban on predatory lending practices and racial discrimination.
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Sinema opposed an amendment that would preserve the CFPB’s authority to protect homeowners from predatory lending.
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Sinema supported a bill that rolled back protections for mobile home buyers, potentially steering those buyers into high-cost loans.