Monday, May 23, 2016

You can't solve the housing problem by just building more nice things for rich people

In addition to offering a supply side canard to developers and politicians who want to avoid the gentrification issue, it often also turns out to be part of a larger scam for parking money.
Half of every completed complex marking Miami’s skyline appears half-empty. At night you can count the dark vacancies, void of any patio furniture, electricity or life.
These units aren’t owned by snow-birds; they are owned but unoccupied.
Foreign investors, we were told, from Brazil and elsewhere. They viewed Miami as a legitimate and safe place to invest. While this might be true to an extent, the recent release of the Panama Papers confirms some things haven’t changed: Miami’s booming high-end real estate market is at least partially used to launder money and a majority of units purchased are through offshore shell companies that hide true ownership and serve as a legal way to evade taxes.
Yet developers keep building at a fast pace, rents continue to increase beyond any local’s affordability, all while small businesses close one after another.
We've talked about this before.  In fact the Treasury Department has already begun monitoring the real estate market in selected cities for just this sort of activity. 
Concerned about illicit money flowing into luxury real estate, the Treasury Department said Wednesday that it would begin identifying and tracking secret buyers of high-end properties.

The initiative will start in two of the nation’s major destinations for global wealth: Manhattan and Miami-Dade County. It will shine a light on the darkest corner of the real estate market: all-cash purchases made by shell companies that often shield purchasers’ identities.
New Orleans-if the press is to be believed- continues to take on more and more of the "luxury travel" character that made Miami a center of parked money condo development. Are we doing anything to keep from being exploited? Or are we actively seeking ways to encourage it?

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