Misdirected Investment: What New York City's Glut of New Luxury Apartment Buildings Tells Us about the Economy

By Morris, Charles R. | Commonweal, November 11, 2016 | Go to article overview

Misdirected Investment: What New York City's Glut of New Luxury Apartment Buildings Tells Us about the Economy


Morris, Charles R., Commonweal


Over the past decade or so, the New York City skyline has been radically transformed by the erection of Empire State Building--size residential towers. The needle-shaped towers, which top out at about ninety-five stories, each cost more than $1 billion to erect, and incorporate huge individual living spaces that, in their heyday, sold for up to $100 million apiece. Amazingly, many of them are nearly empty.

A 2015 New York Times series disclosed that many of the apartments are owned by murky networks of holding companies that conceal the identity of the real owners. Digging deeply, the Times identified a rogue's gallery of Russian, Chinese, Malaysian, and other far-flung tycoons, people with powerful political connections at home, and extraordinary wealth that is likely the fruit of corruption.

People are divided on the aesthetics of the towers--some of them, even to my jaundiced eye, are beautiful--but as an investment, they represent nearly total waste. Granted they have provided a terrific stimulus for the local construction trades, but that is a one-time thing. The recent downturn in global energy and other commodity prices has cut into the loose change available to emerging-market autocrats and their friends, and some of the apartments in newer towers are having trouble selling for the expected prices. But because of the long lead times required for their construction, one can count a half-dozen or so projects still underway or just starting. (Real-estate developers, as Donald Trump has taught the world, take out their fees from a finished project, while another legal entity undertakes the risk of the actual sales.)

The towers were not built as places for people to live, although, to be fair, some of them have been purchased by American executives who made their pile from doing useful things, like launching software companies. But the high rate of foreign ownership suggests that the apartments' primary function is to serve as a safe asset--a magnet for high-end money laundering. The Chinese billionaires who made their money through party connections need to get it to a place where there is due process of law, so a change in government won't put their fortunes at risk.

The sad truth is that the high-end New York towers--as well as their siblings in London, Singapore, and other major financial centers--are just a particularly egregious example of the warping of the modern investment economy. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Misdirected Investment: What New York City's Glut of New Luxury Apartment Buildings Tells Us about the Economy
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.