Canada has just prohibited non-Canadians from investing in residential property for the next two years in an effort to temper an overheated housing market that saw the average Canadian home price increase by 20% in 2021. Meanwhile, Florida Governor Ron DeSantis wants to prohibit “hostile” Chinese corporations from selling homes and property in his state.
Can you envision such restrictions in New York City? Our “global capital” status necessitates that we accept as many British pounds, euros, Chinese renminbi, Japanese yen, Israeli shekels, Moroccan dirham, and Saudi riyals as possible in the five boroughs.
Our wonderful city remains, with London, the most potent global magnet for investment from everywhere. Most New Yorkers are aware of and proud of this fact. There has been periodic hostility toward strangers in the past. In 2019, for instance, a new “mansion tax” was implemented, mainly as a result of anger against absentee foreign owners who were leaving entire residential complexes vacant.
In a city with three million immigrants from other countries, however, political schemes to keep foreign buyers out of New York would be illogical. Even in the much simpler Canadian market, where, unlike the Florida proposal, the new law has a purported dollars-and-cents rationale, the restriction “kills economic opportunity” and “has done nothing to solve the affordability challenge in Vancouver,” according to Jim Costello, chief economist at Morgan Stanley-owned investment research firm MSCI.
In an effort to rein in out-of-control housing costs, Canadian Prime Minister Justin Trudeau has enacted a restriction on foreign ownership of Canadian real estate.
But the Canadian and Florida measures, while unfathomable in New York, are wake-up calls to a heretical question: may New York City become TOO globalized, especially when its political and commercial institutions lose their vigor and its social fabric frays?
According to MSCI, foreign net investment in New York City commercial real estate posted a deficit of $350 million in the fourth quarter of 2022. It may only represent a minor portion of the worldwide commercial market, but any drop in global capital is cause for concern.
Foreign riches is embedded not merely in our physical structures but also in our national character. It is part of what sets us apart from the rest of the country. Manhattan was appropriately described by Spalding Gray as “an island off the coast of America.”
The governor of Florida, Rick DeSantis, has proposed a ban on Chinese entities purchasing homes or farms in his state.
AP
Foreign wealth is important to the city’s coffers and soul. The sight of the Nigerian flag flying above its government-owned mission tower on East 44th Street makes me proud to reside in a location where the entire world is concentrated on a single, narrow island.
The office building at 1211 Sixth Avenue that houses the New York Post is owned by a Canadian pension fund. Neighboring skyscrapers are wholly or partially owned by Japanese, Korean, Qatari, and German corporations, as well as a number of adversarial nations.
Townhouses and condominiums are owned by tycoons from Ireland, China, Nigeria, Brazil, and Qatar, among other countries. Joe Tsai, who is a citizen of Taiwan, Hong Kong, and Canada, paid $157 million for a penthouse at 220 Central Park South last year. Tsai is a billionaire and founder of Alibaba.
As foreign wealth permeates our economy and culture, the city has been detached from the political, economic, and social foundations that once characterized us — and our power. Without them, Gotham risks to degrade further into a “open city” in which buyers utilize empty apartments to conceal illicit riches from their governments, while our own institutions and neighborhoods wither.
The Waldorf Astoria is now embroiled in an ongoing refurbishment and conversion plan begun by its relatively new Chinese owners. Foreign purchasers are generally a good thing for New York, especially when construction projects never seem to get finished.
ZUMAPRESS.com
After 9/11, a contested yet collectively formidable endeavor brought about rehabilitation and rejuvenation. Following the pandemic, there has been no such all-out vigor. In terms of immigration, criminal justice, school curricula, ethnic and racial identity, and even bike lanes, New Yorkers are more divided than ever.
Some of our biggest donors to hospitals, arts institutions, and other deserving charities are moving for warmer, less-taxed locales. Financial institutions including Goldman Sachs and Citadel are experimenting with faraway satellites.
Despite widespread complaining, the city’s real estate business, which had long been a driver for municipal renewal and neighborhood revitalization, has lost much of its political influence. Despite the fact that they are still functioning, dynastic real estate families have been superseded by publicly traded behemoths more attentive to shareholders and worldwide expansion than to local requirements.
Millions, if not billions, of dollars in underused real estate is typical in New York’s most affluent neighborhoods, frequently as a result of foreigners attempting to conceal ill-gotten gains from their own governments.
As a municipality, New York City, which has always been a state creation, is today an abused captive of the state. With “progressive” laws designed to empower criminals and emasculate the police, Albany legislators even usurped the mayor’s long-held authority over the city’s streets.
Even I, a devoted lifetime New Yorker, can lose patience with the unfettered excesses of foreign “investors” due to the persistent concern that New York City is in decline. According to historical evidence, outsiders are always the easy targets during times of crises.
Foreign investment in New York’s commercial real estate decreased by $350 million in the fourth quarter of 2022, a concerning indication for what is generally the city’s busiest investment time.
Getty Pictures
I am disturbed by murky absentee ownership that allows iconic homes such as 23 Wall Street, where JP Morgan was born — and which is today held by a Hong Kong-Angolan corporation — to slip into disrepair.
I despise it when foreign oligarchs, rubber magnates, and computer moguls purchase these beautiful, half-empty towers as toys, while thousands of homeless New Yorkers endure the cold.
I lament the casual apathy and stupidity of the Chinese insurance companies that, after six years of construction, have left the “reimagined” Waldorf+Astoria a barren, incomplete shambles.
But whenever I’m tempted by “alien” encroachment, I’m also reminded that without a nearly $500 million investment from Belgium-based DTH Capital and a loan from a Chinese bank, local developer Rose Associates would not have been able to convert the vacant office landmark at 70 Pine Street into 600 rental apartments. The Barclays Center might not exist if Russian billionaire Mikhail Prokhorov had not spent $200 million in the Brooklyn Nets.
We need each of them. Therefore, while Justin Trudeau and Ron DeSantis engage in economic xenophobia, foreign money bags may purchase as many properties as they choose. And let’s get our own house in order before we close our doors to the rest of the world.
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