One of the scandals of New York City’s affordable housing crisis is how much of its real estate remains completely empty except for a select few days per year when jetsetting billionaire owners drop in. It can be hard–if not impossible–to even pin down who owns these pied-à-terres. A hefty investigation by the New York Times tracing the ownership of condos in luxury NYC buildings, like the Time Warner Center near Central Park, found an increasing proportion of wealthy foreign owners concealing their identity through shell companies to buy city real estate. The investigation underscores the role that high design plays in hiding and perpetuating the wealth of the global elite.
Behind the companies that own apartments in the Time Warner Center, for instance, the Times found 16 people who have been the subjects of government investigations around the world on charges like insider trading, environmental pollution, organized crime, and more. Behind the building’s dark glass facade (designed by SOM), apartments come with panoramic views, stone bathtubs, custom lighting, and sound systems, and more of the trappings customary of multi-million dollar residences. As of 2014, more than 80% of units in the building are owned by shell companies rather than individuals. Purchases are registered to corporations; sales are made in cash; deeds are signed by lawyers; signatures are illegible. All serve to obscure whose money is really invested in that apartment, and who–if anyone–is using that stone bathtub, protecting the assets of a set of wealthy criminals whose assets might otherwise be seized in legal proceedings. (A shell company controlled by former Colombian governor Pablo Ardila, for example, sold his Time Warner condo for a $2 million profit while Ardila was in a Colombian jail charged with illicitly enriching his personal fortune.)
Even the buildings themselves are designed to shield tenants from prying eyes. The Times describes the Time Warner Center:
The building’s layout and protocols facilitate anonymity. There are multiple entrances to its 192 condos–not just through the two towers’ main doors, but also through an adjacent parking garage and through the Time Warner Center shops. And while the building has a book listing the names of people associated with units, the owners do not have to be listed for them to get access to the building. They could walk in alongside someone whose name is in the book. Or, if they are cleared to visit, they could enter the complex through the shops or the hotel, and then take the secure elevators to the condos.
The enticing anonymity offered by these developments make them alluring for swaths of high-rolling foreign investors, raising prices for people who actually want to live at those midtown Manhattan addresses. And because many of these condo owners don’t necessarily spend any time in them, they’re not pumping money into the local economy by hitting up the opera or swinging by the dry cleaner’s. The rest of us are left scrambling for the poor doors.
Read more about the shady financials of the New York condo world in the the New York Times.