How New York's Luxury Housing Market Stashes Anonymous Foreign Wealth

The New York Times focuses on the Time Warner Center near central Park in New York as "the New York archetype of the global phenomenon, reflecting intertwined trends — the increasing sums of foreign money in high-end real estate and the growing use of shell companies."

"Behind the dark glass towers of the Time Warner Center looming over Central Park, a majority of owners have taken steps to keep their identities hidden, registering condos in trusts, limited liability companies or other entities that shield their names. By piercing the secrecy of more than 200 shell companies, The New York Times documented a decade of ownership in this iconic Manhattan way station for global money transforming the city’s real estate market."

The investigative work of the Times team reveals some of the unsavory characters using the New York luxury housing market to stash assets, but also points out the consequences of the trend. For instance, any argument in favor of a "trickle-down effect" is moot when property owners are rarely found in the country.

Moreover, the city implemented generous property tax incentives in its rush to attract billionaires: "As nonresidents, they pay no city income taxes and often receive hefty property tax breaks. A program aimed at new condo development doles out about a half-billion dollars in tax breaks a year, according to the city’s independent budget office. These savings are passed on to owners in the form of lower property taxes. The Time Warner Center was not part of the most lucrative tax break program, but many other buildings around Central Park have benefited."

The article includes a series of graphic visualizations, illustrating the trend of foreign investment in New York City as a whole, the country as a whole, and the Time Warner Center as a case study.

The long article, with a lot more investigative work and storytelling about some of the individuals that own property in Time Warner Center, includes at least one recommendation for what to do about it all: "A proposal from the Fiscal Policy Institute would impose a graduated tax on pieds-à-terre worth $5 million or more. The group estimates it would generate $665 million a year in revenue for the city, mostly from owners of the approximately 445 apartments valued at more than $25 million."