A Simple Way To Launder A Lot Of Money
A report from the Village Voice on New York. “Next month, New York’s mega-priced apartment buyers will get a chance to bid on what’s probably the biggest the biggest luxury apartment foreclosure in the city as a Nigerian energy mogul’s $51 million dollar apartment goes on the block. Kolawol Aluko defaulted on a $35 million mortgage. It’s the second giant foreclosure at One57, the 57th Street tower finished in 2014 . The building itself was funded partly by a subsidiary of an Abu Dhabi company linked to a global money-laundering investigation. Aluko’s full floor apartment was held by a shell company, as are many of New York’s highest-priced condos. Eight figure properties held by LLCs with opaque names–until, as in this case, things blow up.”
“Thanks to permissive laws on shell companies, the United States — and New York in particular — has quietly become one of the world’s money shielding havens. Carolyn Maloney, New York representative, has introduced bills to change this five times, according to Quartz. ‘There are no requirements for anyone involved in real estate, apart from banks, to actually do any anti-money laundering controls or background checks,’ says Heather Lowe, the legal counsel and director of government affairs at Global Financial Integrity, a non-profit that tracks and studies the illicit flow of money around the world. She called the available real estate in places like Manhattan’s Billionaires’ Row ‘a simple way to launder a lot of money at once.’”
From Metro News in Canada. “Vancouver city council remained firm on not exempting owners of second homes from a vacancy tax that went into effect this year, despite a renewal of pleas from people who split their time between Vancouver and other cities. Michael Geller, an architect and city planner who opposes the tax, acknowledged the idea of second home owners crying poor draws ’snickers.’ Tom Davidoff, a University of British Columbia economist who supports the tax, pointed out that Vancouver properties, including condos, have had enormous capital gains over the past few years.”
“‘We’re talking about 50, 60, 80 per cent capital gains, and the number here is like 15-20 per cent after it’s done accruing, so the estate’s going to do just fine,’ he said.”
From The Sun in the UK. “Iain Duncan Smith today called for an end to the building of tower blocks in Britain in the wake of the Grenfell Tower disaster. The ex-minister also suggested slapping extra taxes on foreign investors who buy up properties and leave them empty, in a bid to solve the country’s housing crisis. Discussing the problem of luxury homes which are bought by millionaires from China and Russia who then never use them, he said: ‘Deal with that by taxing them, New York does – I would slap a tax on houses left unoccupied.’”
From Property Guru on Malaysia. “Despite the link between banking collapse and housing bubble, the National House Buyers Association (HBA) has urged the government not to relax guidelines on foreign property buying in Malaysia, reported Free Malaysia Today. The call comes after veteran property expert Ernest Cheong expressed concern that the luxury home glut may ruin banks and eventually lead to a financial crisis. Since most of such homes are owned by developers or speculators, the failure to sell them could result to banks being unable to recover loans taken on such properties, said Cheong.”
“With this, he urged the government to introduce measures aimed at encouraging foreigners to acquire luxury homes within the secondary market, since majority of locals cannot afford such homes. HBA honorary secretary-general Chang Kim Loong said relaxing guidelines on foreign property buying is not the right way to go. This is because the type of properties that usually cause a property bubble to burst are those targeted at lower- to mid-income groups.’There has always been a direct correlation between a housing bubble leading to a banking collapse, which further leads to collapse of the overall economy, which ultimately leads to a recession,’ said Chang.”
The Property Report on Myanmar. “If retail is thriving – and evolving – it is a very different situation when it comes to residential developments. In the little more than 12 months since Myanmar’s first civilian government in five decades finally took up the reins of parliament, the initial rays of promise for the residential market have been obscured by clouds of uncertainty and disillusionment. The current situation is ‘challenging’ at best, according to Richard Emerson, managing director of Yangon-based property consultancy Emerson Real Estate. ‘Things are difficult,’ he says. ‘The residential market is effectively at a standstill because of a range of fundamental issues.’”
“A glut of high-end properties now sit either unfinished or empty as the envisioned influx of wealthy foreigners expected to rent them has failed to materialise due to ongoing concerns about the wider economy and a lack of effective investment legislation. The Colliers report notes that the total completed condominium stock is estimated to have exceeded 6,000 units at the end of 2016 with more than 10,000 units in the pipeline. ‘The reality is that Myanmar requires foreign investment on all fronts – including real estate – in order to get the economy going again,’ adds Dan Davies, managing director of Colliers International Myanmar.”
“The reduction in rental fees will bring long-term benefits to the city and help drive down the cost of living, making it a more attractive base for foreign residents, according to David Ney, managing partner at York Road Realty in Yangon. ‘If you have more inexpensive property on the market, more international companies will see opportunities because they can get more for their dollar and as more open up the overall the cost of living will go down, and that is good,’ he says, adding that high-end rents have fallen by around a third. ‘Properties that were renting for USD5,000 per month are now going for USD3,000 or even USD2,000.’”
The Daily Trust on Nigeria. “Alhaji Murtala Aliyu, Mutawallen Gombe, a former Minister for State, Federal Ministry of Power and Mines, is the newly elected President of the Quantity Surveyors Registration Board. Q: There are many vacant houses across Abuja, is there still need for government to embark on mass housing to cope with the housing needs in Abuja?”
“A: The solution is for government to grow the economy and make it an economic issue as some of the houses unfortunately are built with laundered money. I think for some time we will continue to have houses that are empty. As long as we are still fighting corruption, but when things stabilize and when houses become economic ventures where people need to earn from those houses, there will not be empty houses. They will make sure that they bring them to affordable level for people to occupy them.”
“Q: How can Nigeria’s housing need be met with the rising population and rural urban migration?”
“A: Grow the economy mainly by commoditizing housing. Housing is more a personal and traditional thing as you hardly find housing in towns now where you will hardly go. There are places where you have houses and nobody is occupying them, they are just for occasions. This is where the people are in need of houses and the houses are not there or they are not available despite the increasing demand for shelter. Houses should be commoditized for a buyer can buy a house and if he thinks he wants change, he can sell it and buy another one, if he is moving from one place to another or if he is moving out of town, he can dispose of it and use the money to buy another and to do that, you need to develop the economy.”
