Charles Koch funded eviction push while investing in real estate companies | Koch brothers

Billionaire Charles Koch’s Foundation has funded three conservative right-wing groups who led the court battle to lift bans on eviction from tenants during America’s Covid-19 pandemic.

At the same time, Koch’s corporate empire suddenly ramped up its home purchases during the pandemic – including large investments in real estate companies with a potential financial interest in lifting eviction restrictions.

In recent months, the Texas Public Policy Foundation, the Pacific Legal Foundation, and the New Civil Rights Alliance have urged federal courts to crack down the Centers for Disease Control and Prevention (CDC) eviction moratorium, which aims to protect millions of Americans from it from being thrown from their homes during the pandemic. The groups have won two decisions so far.

Between 2017 and 2019, the Charles Koch Foundation donated nearly $ 7.7 million to these three conservative organizations, according to the foundation’s tax returns verified by the Daily Poster.

Koch Industries and the Charles Koch Foundation did not respond to requests for comment.

One of the largest conservative interest and political cause financiers, Koch is one of the richest people in the world in fossil fuels thanks to his stake in Koch Industries, the country’s second-largest private company known for its investments.

But Koch Industries has plowed money into real estate since the Covid-19 pandemic began.

In March of this year, the Wall Street Journal published a report entitled Charles Koch Banks on Distressed Real Estate. The paper reported that the billionaire corporate conglomerate is “becoming a major real estate investor during the pandemic, leveraging its resilient cash reserves to buy properties at run-down prices and looking to a longer-term recovery.”

In April last year, a month after the pandemic started, Koch Real Estate Investments made a “$ 200 million preferential stake in the single-family rental business of Amherst Holdings LLC,” according to the law firm Jones Day, which advised the Koch Industries subsidiary. on the deal. Amherst says that since 2012, “the affiliated funds have purchased and operated more than 30,000 homes”.

As of last May, Koch Real Estate Investments has had a financial relationship with Ladder Capital Corp. which culminated in a $ 32 million stake in December. Ladder finances residential real estate, and the Wall Street Journal recently reported that its subsidiaries’ loans to Donald Trump have been scrutinized by prosecutors.

Koch Real Estate Investments was also part of a group of investors who last month acquired a stake in SmartRent, a technology company for landlords.

Koch’s real estate buying frenzy coincided with Koch-funded conservative groups filing lawsuits against the federal eviction ban.

As of 2017, the Charles Koch Foundation has announced a donation of approximately $ 4.6 million to the Texas Public Policy Foundation, $ 2 million to the New Civil Rights Alliance, and $ 1.1 million to the Pacific Legal Foundation. These groups have been suing since last fall to lift the CDC eviction moratorium, arguing that despite the pandemic, the CDC has no authority to prevent landlords from evicting criminal tenants.

The Koch network’s umbrella organization, Stand Together Trust (formerly known as the Seminar Network), separately donated $ 500,000 to the Texas Public Policy Foundation in 2019.

In February, the Texas Public Policy Foundation convinced a federal judge in Texas to declare the CDC’s eviction moratorium unconstitutional. In March, an Ohio federal judge joined the Pacific Legal Foundation and ruled that the CDC had “exceeded the scope of its authority” in its eviction ban.

Both Ladder and Amherst – and thus Koch Industries – could benefit if the Koch-funded groups succeed in lifting the eviction ban.

Amherst owns Main Street Renewal, which operates 20,000 homes, according to Fortune Magazine. Main Street Renewal’s website lists rental homes in 17 states, including Ohio, Georgia, Tennessee, Texas, and Florida.

In March last year, Amherst Capital researchers warned investors that the pandemic could put disproportionate pressure on tenants.

“While no economic class is unaffected by Covid-19’s silent anger, lower-middle-income households – mostly hourly workers – are likely to bear the brunt of the burden,” they wrote. “A disproportionate proportion of these hourly wage workers affected are tenants who need payment support in these difficult times.”

The following month, Amherst CEO Sean Dobson told Bloomberg News that the company would be lenient to tenants “while we can. But we don’t have the Federal Reserve to borrow. “

The Private Equity Stakeholder Project recently identified 150 eviction cases filed by Main Street Renewal in March and April this year.

According to the latest information from the federal government, Amherst reported on the lobbying congress on “issues relating to the market for single-family homes” in the first quarter of 2021.

In a recent filing with the Securities and Exchange Commission, Ladder warned investors that “Lenders and landlords face challenges in enforcing contracts and initiating proceedings such as foreclosures and evictions due to moratoria” – and therefore “acquiring new property or rehabilitated may not generate significant revenue immediately ”.

In October, days after the Pacific Legal Foundation and the Texas Public Policy Foundation filed their CDC lawsuits, Brian Harris, CEO of Ladder, declared in a call for earnings that “these eviction moratoriums that are in place are accidents waiting to to be happened ”.

“The government takes people who vote and says you don’t have to pay your rent this month, but they won’t be there if they owe six months of rent,” Harris said. “And they didn’t tell the landlord that he didn’t have to make his payment to his lender like I did.”

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