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Kushner Companies may be “a prime beneficiary” of mortgage freeze in coronavirus stimulus: report

Firm may be eligible to benefit from a provision intended to help low-income renters — even if it has money to pay



Igor Derysh
April 3, 2020 4:27PM (UTC)

Jared Kushner's family company may be "a prime beneficiary" of a coronavirus relief provision allowing landlords to freeze mortgage payments on certain properties, according to a new report.

Kushner Companies, the real estate firm owned by Kushner's family, may be able to freeze payments on thousands of low- and moderate-housing units partially funded by an $800 million federally backed loan that it received last year, Politico reported.

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The provision, which requires landlords to agree not to evict tenants unable to pay rent amid the coronavirus crisis, was one of multiple provisions in the bill which could benefit companies of both Kushner and President Donald Trump.

The provision was intended to help property owners whose tenants cannot pay rent. Kushner Companies may be able to get federal assistance — even if it has enough money to cover the mortgage payments — because it operates through a series of LLCs, Shekar Narasimhan, a real estate financing expert at Beekman Advisors, told Politico. 

"Could he take advantage of it? Yes, his company could," he said. "They're supposed to have deep pockets, but most owners set each building up to an LLC. So, in theory, he doesn't have an obligation to write a check."

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The provision is one of several in the relief bill that stands to benefit both Kushner and his father-in-law, neither of whom divested from their businesses after entering the White House.

Democrats pushed to bar Trump and Kushner from tapping into the relief funds, but that provision only applies to the corporate bailout fund — not the mortgage provision. It is unclear if the bailout provision applies to Kushner at all as it only bars government loans from going to companies in which government officials or their family members directly have an ownership stake of at least 20%. Since Kushner often splits ownership with family members and other investors, the company may be eligible for relief, The New York Times previously reported.

Kushner and Trump's companies may also benefit from the bill's small business loan program. Individual hotels owned by Trump and the Kushner family may be able to seek loans intended for businesses with fewer than 500 employees, and the loans do not need to be paid back if the company keeps its employees.

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"The ban for the Trump family only applies to one part of that bill," Jennifer Ahearn of the watchdog group Citizens for Responsibility and Ethics in Washington (CREW) told Politico. "And there are questions about how Kushner's interests are structured in his businesses. We don't have visibility into his interests."

But the organization agreed that the funds themselves were necessary to help small businesses and renters survive the economic downturn caused by the coronavirus crisis.

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"While they still may benefit from parts of this bill, on first read it appears only in ways that would benefit many others," CREW spokesman Jordan Libowitz told the Associated Press.

While Kushner Companies stands to benefit from the provision intended to help low-income renters amid the crisis, the firm sent out rent collection notices to residents in New York that did not even mention the coronavirus, Mother Jones reported. Two days later, it sent another email acknowledging the crisis but urging residents to pay up "ASAP" even though the city has banned evictions for 90 days.

"So while the hospitality and commercial real-estate components of the Kushner business empire feel the squeeze, the company is in turn squeezing its New York renters as best it can," The American Prospect's Alexander Sammon wrote. "The priorities of Jared Kushner and his family's real-estate empire are clear: wring every dollar out of their tenants, before cashing in on the bailout plan that Jared himself helped draw up."

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Igor Derysh

Igor Derysh is a staff writer at Salon. His work has also appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.

Tips/Email: iderysh@salon.com Twitter: @IgorDerysh

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Aggregate Coronavirus Covid-19 Donald Trump Jared Kushner Kushner Companies Politics

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