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There are a lot of speculators (domestic and foreign) buying US houses because of their appeal to corrupt foreign officials who need to reinvent themselves as l
by michaelochurch 12y ago
There are a lot of speculators (domestic and foreign) buying US houses because of their appeal to corrupt foreign officials who need to reinvent themselves as legit corporate execs under new identities (and it takes 2-3 years to get the fake jobs and references in place; during that time, a person is living out of his house, which is what makes the Valley so appealing).
I'm completely OK with the US as a place where people from all over the world can reinvent themselves and tell a second chapter of their stories. That's what it's been for hundreds of years, and what made it great. Almost every one of us has at least once ancestor who came here to escape trouble in the old country. I'm not OK with it when it means that Americans are priced out of their own housing, especially now because these corrupt foreign officials aren't even coming here, but just buying real estate just in case things go bad in their home countries. Not only does it make housing unaffordable for us, but there's the moral hazard angle as well: by allowing nonresident foreigners to buy so much of our best real estate, with a great proportion of those being corrupt officials or people seeking resale to them, we're effectively subsidizing corruption in the rest of the world.
(Is it correct that every foreign investor buying real estate is a corrupt third-world ultra-HNWI? No, that's only about 1 in 4. The other 3 are speculators banking on the resale value to corrupt officials abroad.)
- jacques_chester 12y agoI've seen you say this a few times now. Do you have a source?
- michaelochurch 12y agoThere are millions of sources on the use of high-end real estate for foreign money-laundering operations. Like this one: http://nymag.com/news/features/foreigners-hiding-money-new-york-real-estate-2014-6/ http://nymag.com/news/features/foreigners-hiding-money-new-y... The question is: why are we allowing foreign speculators in our real estate market, prices where they are, in the first place? Once an average house costs more than 8 times the average income, you have to protect the homeland. Unless you've stopped caring about your own people.
- jacques_chester 12y agoI'm not referring to buying real estate. I'm referring to your specific accusations that Chinese (edit: foreign) nationals are launching fake identities in Bay Area companies. I'm a foreign national, incidentally. I contribute to the high rent in NYC. I'd say tech money is ruining the city but the fellas down in FiDi got in ahead of us 30, 15 and 5 years ago.
- jessriedel 12y agoThat's a very long article. Does it make the claim that the fradulent fraction of the foreign investor (which I predict is small) is large enough to have a significant impact on the housing price?
- onethree 12y ago8 times? the median house price in Sydney just hit 800k. The median wage is 57k. I wish house prices were only 8 times the median wage...
- enraged_camel 12y agoHe said average income, not median income. There's a huge difference between the two when you talk about the Bay Area, since the income gap is so huge there.
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