(Source: Gage Skidmore, Flickr)

Republican frontrunner Kelly Ayotte is facing criticism from both sides for her role on Blackstone’s board. Joyce Craig and Chuck Morse blame the global investment firm for rising rents and accuse Ayotte of profiting from inflated profits.

But experts dismiss these attacks as economic nonsense and describe them as a misrepresentation by market opponents.

On Tuesday, the Union Leader published a front-page article about Blackstone — “the country’s largest landlord” — and Ayotte’s $150,000-a-year board position. The article quotes a prominent socialist who served as the UN special rapporteur on the right to housing, alleging that Blackstone and other private equity firms are manipulating the housing market.

Ayotte’s opponents struck.

“The residents of our state are struggling to pay their rent and are unable to buy a home. Instead of working to solve this housing crisis, Kelly Ayotte has made millions of dollars off it,” said Democratic gubernatorial candidate Joyce Craig.

Republican Rep. Chuck Morse joined in, releasing a statement on “Kelly Ayotte’s close ties to Blackstone and other multinational corporations.”

“Voters have a right to know where Kelly Ayotte’s true loyalty lies: the board of a corporation or the families of New Hampshire,” Morse continued, adding that Blackstone is “one of the primary perpetrators of the housing crisis that is plaguing communities across the country.”

Ayotte and her allies dismissed the attack as what her spokesman, John Corbett, called “Soros-funded, left-wing nonsense.” Ayotte’s supporter, Republican Rep. Dennis Mannion of Salem, said it was proof that Ayotte was the clear frontrunner in the race.

“The fact that Chuck Morse, Joyce Craig and Cinde Warmington attacked Kelly on the same day with the same false attacks doesn’t shock me in the least,” Mannion said. “From day one of this race, it was clear that Kelly was the one to beat, and neither Morse nor the Democrats are in the same league.”

While targeting Ayotte and Blackstone may be smart policy, it doesn’t have to be. But economists tell NHJournal it’s bad math either way. There’s no connection whatsoever between Blackstone — or any other private company — and America’s current housing crisis.

“The housing market, like any other market, functions according to the laws of supply and demand. For decades, too little housing was built in the United States, which led to a shortage of millions of housing units,” says Tobias Peter, co-director of the Housing Center at the American Enterprise Institute.

While Peter acknowledged that “the problem tenants are facing is real,” he pointed to the market disruption caused by the COVID pandemic.

“From 2016 until the start of the pandemic, rents rose by an average of 4 percent annually. This trend was significantly interrupted during the pandemic, and in 2022 rents rose by an average of 13 percent,” Peter said.

And then there is the basic mathematics.

There are about 146 million rental homes in the United States. Blackstone owns less than one percent of them. In fact, the five largest real estate investment companies together own about 330,000 single-family homes, or about 2.4 percent of all single-family homes.

“Housing inventory is near historic lows, but large institutional investors like Invitation Homes or BlackRock are not to blame,” wrote real estate expert Logan Mohtashami on the mortgage news site Housingwire. “There is no evidence in the data that Wall Street has been the largest 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 the housing market. That is, why do investors view apartments and houses as a safe investment? The reason is that local land use regulations have effectively insulated existing housing from competition by making it so difficult for developers to increase supply. Investors are responding to a government-created supply shortage. They did not cause that shortage or the price increase it caused. This is a pretty silly attack and should not be taken seriously.”

Blaming big corporations for high prices is nothing new in Democratic politics. Both Presidents Bill Clinton and Barack Obama launched federal investigations when gasoline prices soared under their watch. Both investigations reached the same conclusion: market forces, such as the world price of oil, were largely responsible for retail costs.

The Biden-Harris administration has tried to do the same, blaming “greedflation” and “shrinkflation” for food prices that are 20 percent higher than when they took office. But a Fed study released in May found that this is simply not true.

“Data on the current recovery show that the rise in corporate profits is not particularly pronounced compared to previous recoveries,” the San Francisco Fed said. “Price premiums have also not played a major role in the slowdown in inflation since the summer of 2022.”

However, this is unlikely to stop Vice President Kamala Harris from attributing the higher prices to alleged “price gouging” by companies when she announced her economic policy on Friday.

And Democrats in New Hampshire have scheduled a press conference for Thursday morning where they are expected to continue their criticism of Ayotte.

But Chuck Morse is not a progressive Democrat, but a conservative Republican. Why is he attacking Ayotte for her work in the private sector and condemning her as a “financial donor”?

Mannion thinks he knows.

“This just proves once again that it’s Kelly Ayotte against the world,” Mannion said. “And my money’s on Kelly.”