London mayor targets ghost mansions and zombie flats

[octoberlib]

LONDON — They are not hard to spot, if you know where to look, especially at night — the floors of swanky new apartments, most of the windows dark, almost all the time.The zombie flats. Owned, but empty.

And on this cobbled mews in Chelsea? On that private walk in Kensington? No one home, either. There’s enough empty property here to be given a name in the British news media: the “ghost mansions” of “lights-out London,” the streets where it is alleged that seven in 10 addresses are second — or third or fourth — homes.The blight of conspicuous empty homeownership is a big story in London — and around the globe.




In Manhattan, the New Yorker magazine had a look at Census Bureau numbers, which revealed that in Midtown — from 49th to 70th streets, between Fifth and Park avenues — nearly 1 in 3 residences are unoccupied at least 10 months a year.

Newsweek estimated that in Paris, “one apartment in four sits empty most of the time.”In Jerusalem, the deputy mayor said the number of ghost flats is triple the official estimate, and bemoaned the impact on young families searching for a bit of living space.But how to stop or slow or tax the empty units is uncharted territory — including whether it is even possible or desirable.

https://www.washingtonpost.com/world/europe/london-struggles-with-ghost-mansions-and-zombie-flats-the-empty-units-in-city-bereft-of-affordable-housing/2017/09/18/253d67fa-97c4-11e7-af6a-6555caaeb8dc_story.html?hpid=hp_hp-more-top-stories_london-housing-400am%3Ahomepage%2Fstory&utm_term=.46725a8a267d


London Mayor Sadiq Khan's proposal is to jack up taxes on them but experts doubt that will have any effect. . They should investigate the shell companies that own these properties for money laundering. That will produce better results.

[Dustlawyer]

1. The most obvious symptom of growing wealth inequality.

Political systems around the world are caving under pressure from the corrupting influence of money which allows the wealthy to get even more. Imagine the Game of Life or Monopoly where one player gets to write the rules as they go and change them on a whim. This is what we have.

[sharedvalues]

2. Good point

We need a 1% wealth tax

[Achilleaze]

6. + 1,000

republican-style, pee-on-the-proles-economics up the global wazoo.

[gratuitous]

9. And once you start seeing them, it's hard to stop

For example, you probably think campus student groups are struggling little bands of the like-minded getting together to plan one big event. Well, the Young American Foundation at Cal Berkeley is spending more than $8 million this year on bringing speakers like Ben Shapiro to campus. If the groups I was involved with in my undergrad days had $800 to spend on stuff we would have thought we were the campus kings!

[Orrex]

3. My small town has a great many unoccupied homes and empty store fronts

A lot of them are owned by management companies based hundreds of miles away with no interest in the community or the properties beyond the ability to write them off as a loss.

I would imagine that this sort of thing is widespread here in the greatest nation on Earth, and apparently in ol' Londontown as well.

[Scarsdale]

4. London real estate

is VERY expensive. Just out of curiosity, we checked real estate listings while we were there. Mind boggling! Beautiful houses. Some small apartments were more expensive than some homes in my area here. We went to a restaurant across the street from Harrod's department store. Rolls Royces drove up frequently, chauffers(sp?) got out to hold the doors open for women in burquas going shopping there. We went in and all we could afford were some golf balls, towels and tees.

[octoberlib]

8. A British commenter on this article over at WaPo said that

central London is now a dead zone. The city wide shortage of homes for people that actually do things to keep any city running means that there is no business for area retail shops, bars, restaurants, music venues etc.

[JCMach1]

5. Money laundering through real estate

Has been the rage for the last 30 yrs. Add Miami to the list as well.

[octoberlib]

7. FinCEN issued an advisory about this. Whether title ins. companies comply, is another matter

FinCEN Targets Shell Companies Purchasing Luxury Properties in Seven Major Metropolitan Areas

WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) today announced the issuance of revised Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used to pay for high-end residential real estate in seven metropolitan areas. Following the recent enactment of the Countering America’s Adversaries through Sanctions Act, FinCEN is revising the GTOs to capture a broader range of transactions and include transactions involving wire transfers. FinCEN also expanded the GTOs to include transactions conducted in the City and County of Honolulu, Hawaii.

In addition, FinCEN today published an Advisory to provide financial institutions and the real estate industry with information on the money laundering risks associated with real estate transactions, including those involving luxury property purchased through shell companies, particularly when conducted without traditional financing. Such transactions are vulnerable to abuse by criminals seeking to launder illegal proceeds and mask their identities. The Advisory provides information on how to detect and report these transactions to FinCEN.

“Through this advisory and other outreach to the private sector, FinCEN, industry, and law enforcement will be better positioned to protect the real estate markets from serving as a vehicle to launder illicit proceeds,” said FinCEN Acting Director Jamal El-Hindi. “FinCEN also thanks Congress for its modification of the Geographic Targeting Order authority, the first use of which will enable FinCEN to collect further information to combat the potential misuse of shell companies to purchase luxury real estate.”

In January 2016, FinCEN issued GTOs to require U.S. title insurance companies to report beneficial ownership information on legal entities, including shell companies, used to purchase certain luxury residential real estate in Manhattan and Miami—specifically, luxury residential property purchased by a shell company without a bank loan and made at least in part using a cashier’s check or similar instrument. In July 2016 and February 2017, FinCEN reissued the original GTOs and extended coverage to all boroughs of New York City, two additional counties in the Miami metropolitan area, five counties in California (including Los Angeles, San Francisco, and San Diego), and the Texas county that includes San Antonio.

Within this narrow scope of real estate transactions covered by the GTOs, FinCEN data indicate that about 30 percent of reported transactions involve a beneficial owner or purchaser representative that was also the subject of a previous suspicious activity report. This corroborates FinCEN’s concerns about this small segment of the market in which shell companies are used to buy luxury real estate in “all-cash” transactions. In addition, feedback from law enforcement indicates that the reporting has advanced criminal investigations. The expanded GTOs will further help law enforcement and inform FinCEN’s future efforts to assess and combat the money laundering risks associated with luxury residential real estate purchases.

https://www.fincen.gov/news/news-releases/fincen-targets-shell-companies-purchasing-luxury-properties-seven-major

[JCMach1]

10. These peeps love to deal in cash though

http://www.miamiherald.com/news/business/real-estate-news/article69248462.html

But... Literally got in the middle of this with Armenian mafia in Dubai one time. Coming back from Armenia was seated away from family and dressed like and was in the aisle with the made men. Mid- flight someone comes by handing out huge was of 100s ... Knowing the law I suspect it was about 100k... The legal amount of cash to bear through airport customs.

I smiled and handed it back to a surprised gangster.

Money was for buying Dubai real estate.

This stuff goes down all the time.

[EL34x4]

11. The WP article says most of London's empty flats are owned by the middle and lower classes.

Not the rich.

And they are uninhabited because of inheritance squabbles or they are in need of repair.

[octoberlib]

12. The article is all over the place and contradicts itself.

LONDON — They are not hard to spot, if you know where to look, especially at night — the floors of swanky new apartments, most of the windows dark, almost all the time.

“Affordable” here being a relative term, where the average price for a flat last year was $713,143. It is especially brutal for young people, those in the middle income range and first-time buyers.

I doubt the poor and middle class are living in 800,000 dollar ghost mansions and flats. It's a problem in many US cities too, as stated in the government report above.