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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Valuepro who wrote (306845)	10/12/2024 6:55:45 PM
From: Snowshoe	Read Replies (1) of 306849

Plot twist... The Little-Known Factor Driving up Housing Costs: Dirty Money Opinion by James K. Boyce and Léonce Ndikumana 10/12/2024 07:00 AM EDT James K. Boyce and Léonce Ndikumana are economists at the University of Massachusetts Amherst and the editors of ?On the Trail of Capital Flight from Africa: The Takers and the Enablers?(Oxford University Press). The nation’s housing affordability crisis has become so acute that even our presidential candidates are paying attention to it. Former President Donald Trump blames immigrants for driving up prices and vows he will reduce demand by banning mortgages for “illegal immigrants” and deporting them. For her part, Vice President Kamala Harris promises to increase supply by building 3 million new homes. But the number of? housing units in the nation has grown faster than the number of?households since the turn of the century. Something else is happening here. It is not just a supply problem. And it is not just a demand problem caused by an increase in households, whether they are immigrants or not. That’s because demand for real estate is not just about the number of people who need homes, it’s also about the amount of money buyers are bringing into the market. People without money cannot push up prices. It’s the people with money — especially those with a lot of money — who drive up prices for everyone else. The truth is that there are a lot of people buying luxury real estate who have a lot of money. Dirty money. And that money is distorting the market for ordinary homebuyers. In March, federal authorities seized a Manhattan luxury apartment owned by the daughter of Denis Sassou Nguesso, longtime ruler of the Republic of the Congo in central Africa. The forfeiture complaint in U.S. District Court charges that the funds used to buy the $7 million apartment, which overlooks Central Park, originated from “misappropriation, theft, or embezzlement” from the Congo treasury, and traces the layers of shell companies through which the stolen money was laundered. The sums are not small. Nearly a decade ago, The New York Times estimated that anonymous shell companies accounted for more than half of all purchases in Manhattan and Los Angeles, nearly half in the San Francisco Bay area and over a third in Miami. Comparable statistics are not available for more recent years, but this suggests that the amount of hidden wealth invested in real estate in Manhattan alone surpasses $100 billion. Many of these properties sit vacant. They are bought not as places to live but instead as places to park ill-gotten wealth. Sassou Nguesso’s apartment in Trump Tower has been unoccupied since it was purchased in 2014. Full story: politico.com

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