Some of them have places elsewhere too.
Vancouver had to go to vacancy taxes.
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The corruption is a result of the restrictive zoning and NIMBYs. They provide the leverage for the politicians to extract ‘contributions’ from developers. The restrictive zoning and NIMBYs also make it so that only corporate developers can build big residential projects and that those developments have to be expensive. People cling to their single family zoning and the only way you can add units ends up being along commercial corridors. So the land value on those commercial corridors skyrockets and all the buildings have to be luxe to pencil out. Reforms like the ADU legislation at the state level in CA allow non-corporate development by middle class property owners at construction expense levels that are affordable. I’m seeing new builds start to include ADUs a lot more now even if they haven’t been catching on as quickly as they should because people just don’t know about it. A reform like Minneapolis could be a huge win for affordability.
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It’s more of a feedback loop.
The developers are a powerful donor bloc in any desirable city, but they’re often at odds with the NIMBYs. I’m seeing this play out in one of the cities I live in, where neighbourhood NIMBYs are fighting with a developer who wants to put up a mid-rise luxury condo.
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Suppose the “Western” countries got together and shut down all the offshore havens (they are all protectorates of Western countries). Who would benefit? Russia, China and developing countries would not have this drain on their wealth and the West would not have all this cash pouring in. The cash gets spent or invested in the West after it’s through the real estate laundry.
I think this is why there is never a serious crackdown.
Besides, Western oligarchs need the offshores for tax dodging.
And the Imperial system depends on having corrupt dictators who will allow their countries to be exploited on favorable terms. This only works if the dictators can stash their loot safely in the West.
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The perfect environment for beaks-ever-open lawmakers. Who cares. The $$$ is clean… so prove otherwise, all you loser fuckers.
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A lament from a resident of:
New York
San Francisco
Toronto
Seattle
Miami
London…
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The classics are sweet.
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As if Trump didn’t have enough reasons for hating CA.
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So the real problem is that they don’t rent their luxury penthouses and and choose to have them sit empty?
Why don’t they rent them out? Why did they bother overpaying for an asset they don’t use when they could have bought a unit that they could rent out and make even more money?
I know developers who are busy building affordable housing in Denver, Phoenix, and even smaller towns. It’s happening.
There have been waves of foreign buyers in certain markets for years. South Americans inflated the Miami market. Chinese buyers inflated the California market. With strong property rights here and political stability (compared to their countries), the US is a desirable place to invest.
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… Austin
Vancouver
Boston
Los Angeles
San Jose
Oakland
Tokyo
Paris
Hong Kong…
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…Sydney…
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It started with the Asian economic crises where many families in Malaysia and Singapore decided to put their savings into Australia, and did that by buying homes. Then the Chinese started doing it and prices really took off.
My wife’s cousin from KL gets free flights to the Gold Coast, paid for by property developers.
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Here’s an article from a few years ago about why rents are too damned high. It seems they are always too high and never too low. Yet they get rented.
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The rent is too damned high because money-laundering oligarchs bought all the real-estate to clean their oil money.
3 Don’t rush to judgement.
[note sadly the sarcasm]
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fuck me! how do we ever fix this shit
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Yeah it’s definitely a feedback loop.
The developers are constantly fighting the NIMBYs but the NIMBYs sort of create a monopoly for those developers.
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The author here describes how if your motivation is mainly to launder money, then you aren’t very price sensitive when you purchase the apartment building (i.e. you’ll overpay because you need to get your scheme going).
So, wouldn’t the same concept go toward renting these apartment buildings out? You want tenants and rental income to create your facade, so why wouldn’t you be willing to undercut other landlords to get occupants quickly (i.e. lower your asking rents to slightly below what everyone else is charging)?
It seems as though money launderers may be the ideal apartment building buyer. The developer or previous owner gets rewarded because they found a party to overpay and the tenants get rewarded because they have a landlord who cares more about the appearance of running a rental building than actually maximizing rents.
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…Frankfurt, Hamburg, Munich, Zurich…
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