Many of these companies use illicit funds to purchase real estate in North American cities to launder their ill-gotten money.
In New York City, dozens of luxury towers have been connected to global money laundering. In Vancouver, Chinese investors disrupted the city’s housing market so badly that the province of British Columbia established a foreign investor tax and a tax on vacant properties.
With European countries now insisting on more transparency, illicit cash is now cascading into the United States. In fact, the U.S. is now the world’s second-biggest tax haven and secrecy jurisdiction, after Switzerland.
The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has increased its scrutiny over real estate markets in Miami, New York, and parts of California, Texas, and Hawaii.
But that just makes the rest of the country more attractive for secret cash — even far from big cities. In a small Vermont town, I met a Russian investor who lives in Dubai. He was buying up thousands of acres of Green Mountain farmland.
Our communities are being fundamentally transformed by land grabs and luxury building booms. These drive up the cost of land in central neighborhoods, with ripple impacts throughout a community. And this worsens the already grotesque inequalities of income, wealth, and opportunity.