Disclaimer: Growing up, I lived in and around Baltimore for eleven years. So, you can imagine, when I came across a piece in the New York Times which was speaking on spurned, unjustly treated residents of Baltimore, I took great interest.What made the story even more intriguing was the subject of the investigative piece – Jared Kushner.
On May 23, Alec MacGillis, contributor to NYT and ProPublica, published a feature titled “Jared Kushner’s Other Real Estate Empire.”
In it, he speaks to the pain of Baltimore renters who’ve found themselves on the wrong side of a sue happy, unresponsive home provider – Jared Kushner, former CEO of Kushner Holdings. Although, he’s a man of few words publicly, look no further than his actions to make your determination on who he truly is.
As many of you know by now, Jared Kushner is a senior advisor to the president of the United States and is the husband of Ivanka Trump. What many of you may not be familiar with is his extensive background in real estate, the Harvard degree he boasts, and of his unapologetic focus on lower income American renters as one of his primary, proven areas of generating consistent revenues.
Understand, in the world of capitalism, the rules are very clear: make money. And, the reality is, many truths exist all at once. Being a shrewd business person is lauded and rewarded within the system. But, at the same time, at what cost? It’s entirely possible to do something that’s not illegal but still shirks any ethical responsibility in the process. Below, I’ve outlined Kushner’s standing on the business side, while also including the lived experiences of the residents in which his companies service.
- In August 2012, through $371 million in financing from the US government-backed Freddie Mac, Kushner’s investment group purchased 5,500 multifamily units in and around Baltimore, MD
- In 2014, he bought three more apartment complexes for $37.9 million
- Kushner’s JK2 Westminster, property management firm, operates 15 Baltimore apartment complexes which figure to be around 20,000 residents
- Many residents receive Section 8 assistance as Baltimore County has no public housing for its more than 825,000 population
- Kushner’s thesis on why home providers should focus on the lower income portion of the market: “It’s proven over the last few years to be the most resilient asset class, and at the end of the day, it’s a very stable class.”
- Under Maryland’s District Court database, JK2 Westminster is listed as the plaintiff in 548 cases, not including the hundreds of other cases filed by the individual company complexes
- Kushner stepped down as CEO of Kushner Companies in January but is still a stakeholder (his shares are estimated to be worth around $600M – because he still owns shares, he’s recused himself from policy decisions on Section 8 as many of his tenants rely on it for their rent)
The Baltimore Experience:
- After acquiring the properties, JK2 Westminster has been retroactively going back in records, predating its ownership of the residences, and sending out unpaid rent summons to folks who sometimes haven’t lived there in years
- The company’s litigious grievances often highlight anything from patently false withheld rent claims to bogus old repair costs, or even frivolous items like unreturned laundry room key cards
- Through court order JK2, a multi-million-dollar company has garnished wages directly from the bank accounts of single mothers and of people who can barely afford to cover their monthly bills (some of which have even elected to forgo opening bank accounts because they’re fearful the company will come after them next)
- MacGillis took a survey in which he found that 90% of cases brought by JK2 Westminster resulted in judgments against defendants (who often didn’t appear in court or did not have legal counsel)
- Maintenance is known to be slow in responding to complaints about black mold, faulty fixtures, and holes in the wall (one tenant even had a leaking ceiling, maggots coming from the living room carpet, and raw sewage flowing out of their sink)
- Many of their complexes comprise of hundreds of units but average about four maintenance workers on site
- Some units have severe mouse infestations that have gone virtually unchecked
As an entrepreneur, myself, I get the responsibility a company takes in ensuring it’s maximizing revenue and getting every dollar owed to it. That said, there’s something to be said about the intent behind the moves we make. Our goal as business people should be to provide something of value to a customer with the purpose of making their lives better, in some way, to justify the payment received. The problem here is that one of the essential, basic human needs – shelter – has been made to be an economic game chip in a sector where there needs to be more of a concerted effort to understand the residents who reside in the apartments.
Aggressively preying on lower income people and targeting them due to their lack of legal prowess, capital, and time, to fight long cases is wrong. You can’t capitalize on society’s most vulnerable and then turn around and take a position as senior advisor to the President of the United States, in which you are tasked to uphold the highest level of moral dignity and fervor in protecting the very people you’ve systemically taken advantage of.
Jared Kushner grew up rich and has extended the wealth and footprint of his family in the real estate space. He’s never lived in lower income housing or been subjugated to growing up under these kinds of conditions. I don’t say this to demonize him, as this is true for most. I grew up never worrying about my parents’ ability to put food on the table. I bring this up because it underlines the importance of sympathy, and more importantly empathy.
Jared made it a strategy, a mission to exploit poorer people and the system that governs them, to maximize his profits. Again, while this is legal, there is something fundamentally wrong with this picture. He and his company’s inability to see or willful ignorance in acknowledging that they’re damaging peoples’ lives is problematic for more reasons than one. And, unfortunately, they’re not the only bad actors out here doing this.