A link to The New Yorker from Tim Pawsey: an article with “echoes that resonate.” Some assorted quotes.
.
The Kleptocrat in Apartment B
Will the government’s efforts to pierce the veil of anonymity in real-estate transactions also burst the Manhattan housing bubble?
.
Last year, when consultants from Deloitte surveyed Swiss watch executives, eighty per cent of them indicated that demand was down “due to anticorruption legislation”in China. This question of how one country’s graft might fuel the economy of another arose again last week, when the U.S.Treasury Department announced an initiative to track the secret buyers behind the trade in luxury properties in New York City. …
Sleek and skinny super-luxury buildings spring up around Central Park, and single apartments sell for nine-digit figures, adding credence to the caricature of Manhattan as a club for global plutocrats.
For many New Yorkers, this is not, in fact, a godsend: exorbitant prices in the tens of millions of dollars pull up prices in the lower end of the market, driving working- and middle-class people out of the city. And as a contemporary Jane Jacobs might observe, had she not been priced out of the West Village, billionaires don’t necessarily make good neighbors.
Because luxe Manhattan real estate generates a good return, many people don’t actually live in their investment properties.If they’re not residents, they’re paying no local income tax here, and because of a steep tax abatement on certain luxury properties, they can often pay very little in real-estate taxes. …
On the upside, you won’t actually see these neighbors very often—because they aren’t here. According to the Census Bureau, throughout a sweeping stretch of midtown—from Forty-ninth to Seventieth streets, between Fifth Avenue and Park—nearly one in three apartments is completely empty at least ten months a year.
… real-estate ownership in the city “can be made as untraceable as a numbered bank account,” a developer concludes,“The global elite is basically looking for a safe-deposit box.” …
Today, while banks are obliged to institute “know-your-customer”safeguards against money laundering, real-estate professionals are not. …
The new regulations will oblige them to be interested. The effort will begin by focussing on two real-estate markets—Manhattan and Miami—and requiring title-insurance
companies to identify the “beneficial owners” behind the shell companies and L.L.C.s involved in a transaction, in order to determine who the actual buyers are.This
information would then be reported to Treasury. If officials can definitively establish that any of these apartments or houses were purchased with funds that were misappropriated or otherwise tainted, there could be a basis for seizing the property, through the Kleptocracy Asset Recovery Initiative. …
There’s no reason to think that, on its own,Treasury’s efforts to pierce the veil of anonymity in real-estate transactions might also burst the Manhattan housing bubble.
But if I were a real-estate professional who catered largely to wealthy foreigners,I’d be thinking about the lesson of those Swiss watchmakers.
.
Full article here.
Ownership issues aside, there seems to be a very good urban planning research topic here about the NYC approval process for these very tall buildings. Or, perhaps, in some parts of Manhattan there just isn’t a height limit, much like some of our Metro’s town centres. (Once upon a time this list included Coquitlam, New West, Surrey and Burnaby. Height Regulations may have changed since I last worked in any of these municipal town centres.)
From what I understand the unit costs escalate exponentially above 53 stories in reinforced concrete construction due to the additional engineering and structural measures needed in an active seismic zone. It’s a lot of mass to put so high in the sky. Only the Shangri-la and Erickson’s last work (I am loathe to use the T-word!), both on the same stretch of Georgia Street punch above that height. Most town centres in the Metro will probably level off there at their maximum height …. unless penthouses can one day garner nine figures. After that, the sky’s the limit.