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Comment by jzwinck | Hacker News Reader

About five years ago I saw a chalkboard outside a trendy SoHo NYC apartment. For sale: 2 million euros.

The same story is playing out in London as well, with the consequence that many central flats lay empty most of the time, owned by foreigners who would rather lose out on some rental income than risk the hoi polloi damaging their artwork.

By the way, in NYC it is usually not as hard to find the true, human owner(s) of apartments purchased by "corporations" as the article implies. It takes more than a quick Google search, but the information is usually around if someone wants to know about a particular unit.

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On similar lines, I was in Hong Kong a few months ago and saw quite a few adverts for investing in London property. Global markets really do exist for top tier property.

It's really quite depressing being in the top few % income wise but not having a hope in hell of competing with the global market and the people taking on reckless levels of debt. Our housing markets are broken on so many levels.

It's not enough to be in the top few %, the top 0.1% have orders of magnitude more money than you.

For me, it was even more surprising when I was driving out of Algarve recently (South of Portugal) and saw a billboard about buying and selling Hotels. Not villas, full blown Hotels like it was freaking Monopoly.

It is - with the difference that playing Monopoly doesn't disturb the life of non-players.

The BBC did a feature earlier in the year about London property and Hong Kong investors, it provides a good insight. https://www.youtube.com/watch?v=dINbQGgVEN8

This is also happening in Vancouver, BC since the 1997 era. A lot of money is "parked" there, and asset prices are way out of line with local income levels.

Vancouver and Paris (and their ridiculous ratios between real estate prices and prevailing wages) prove that egalitarian, decent societies can't hold up against the rapacious evil of the global elite. It's sad.

I feel like the global elite are a nasty job being passed around. No country or generation or group of people wants to be the one that stops (possibly with major bloodshed) and ends them, but someone will have to, and it's a world-scale undertaking.

Copenhagen has an interesting bit of accidental resistance against that (at least I think it's accidental): the residence-registry system combined with the common coop-ownership structure conspire to make it unattractive to be a foreign non-resident owner of city-center real-estate. The coop-ownership part is that for historical reasons a huge percentage of central apartments are structured as owner-occupied cooperatives, where the residents own the building. And these typically require the owner to declare it as their residence, except for short-ish (up to 2 years) periods where you can live abroad and rent it out. Now whether you actually spend your nights there people won't check, so you could perfectly well buy a place and actually live in NYC or Paris or Tokyo, only flying in occasionally to eat at Noma. But whether you declare it as your residence is easy to check. And that's where the residence-registry system comes in: to declare it as your residence, you have to declare to the municipality that you live at this address as your main abode. By doing so you've of course also declared that you are a Danish resident. Most wealthy non-Danes don't want exposure to Danish income taxes, so they won't declare this residency, and they therefore can't own these flats, which does a bit to insulate local housing prices from global real-estate speculation.

I think this prevention of value capture is one of the under discussed aspects of socialism. I mean, sure, the market isn't able to discover that a mall or office building the locals don't want would be more valuable, but it doesn't seem to destroy cities.

It destroys people's livelihoods. Regular workers in Vancouver have to pay an absurdly high percentage of their income towards their mortgage payments, because of outside investors that jack up prices and provide no economic growth to the city.

We don't seem to be on the same page. My argument (restated somewhat) is that the ownership controls keep the value distributed among the residents, instead of allowing it to be captured by an outsider (or one insider or whatever).

I always wondered how much the price paid may differentiate depending on where you're from. If the local purchasing market is depressed, but the SE Asian one is strong, will they lower the price for locals, but not those overseas, or vice versa?

Anyways, this is why I advocate a "use it or lose it" philosophy toward assets in general. Not much unlike how many cities will cut your bike off of locking stations if it hasn't moved in a while and send it for recycling or to bike advocacy groups (usually after scrappers get their pound of flesh).

Huh, that's not how it works. Sellers will sell to the highest bidder, regardless of where you're from. So buyers from richer markets win more auctions, displacing locals in a market where there is less wealth.

That's great logic when you have 1 item for sale.

However, when you have a large block of units for sale (1000 condos), and want to sell them as quickly as possible so that your construction financing gets approved (and you're probably worrying about a crash), you want to "price discriminate", which is to charge different prices for the same good.

If rich overseas buyers will buy all 1000 at $500k each, then great, but if they want to buy only 900 and a local is only willing to pay $450k for 100, then take the 900x500k and 100x$450k, there's no need to let the overseas buyer know that you sold the same thing to a local for $450k.

It doesn't have to be global markets. Real estate speculation pushes up prices everywhere.

The same thing happens in Paris, where about 15% of flats are said to be empty. In central areas, 25% to 30% are empty. There has been some talk about new laws to fight off this rampant death of the city but nothing was enacted so far.

I think municipalities and local governments ought to make it really hard (or ridiculously expensive, even for the .1%) to own a place in tense areas without either living in it or renting it.

It's not that hard. You make a high property tax, but add a homestead exemption[1], if you live there you get a discount on the tax. Either off of the percent or a fixed dollar amount you can deduct.

This doesn't help if you want to encourage rentals though.

[1]https://en.wikipedia.org/wiki/Homestead_exemption

That would be kinda rough on renters, no?

50% cutoff. As long as a property is half occupied, the tax is zero.

If you wanted to encourage occupancy on any kind (including renters), you could tax vacancies instead.

Land Value Tax.

http://en.wikipedia.org/wiki/Land_value_tax

http://en.wikipedia.org/wiki/Henry_George

http://en.wikipedia.org/wiki/Law_of_rent

Hasn't Monaco been the base for that kind of property speculation since at least the 1960s?

Unfortunately this does have some livability implications for those of us trying to live side by side by other people's piggy banks. I'm not sure what the answer is, other than to zone very heavily for new construction.

A new expression for me - "Hoi Polloi".

http://en.wikipedia.org/wiki/Hoi_polloi

This is actually not uncommon in British English.

it's problematic, because people use it to mean the commoners (the prolitariat) and the snooty (the few). It doesn't matter that the latter is technically wrong - it's where you're likely to hear it in conversation.

it's like the phrase "fulsome praise". Can't really use it. is it lavish, or overdone/excessive?

http://www.merriam-webster.com/dictionary/fulsome

... and now literally means figuratively. Language is silly.

Because internet.

my favourite: "egregious" meant "outstandingly good" (which it still does in languages other then english), and now means "very bad".

Another one is "terrific", which used to mean "causing terror" but now refers to something big and impressive.

Maybe in your country, but not in mine.

"Literally" has actually been used informally in that sense for a few hundred years.

Also it is frequently misused - hoi polloi means 'the masses' but people always say 'the hoi polloi', meaning the the masses.

</pedantry>

so use hoi polloi 'correctly' as a noun in a sentence, without 'the' for me.

This pedantic objection is just another reason not to ever use the phrase. You just can't. :)

"This is something hoi polloi would enjoy"

May sound weird but thats only because people have been using it incorrectly for so long.

And what does "This is something hoi polloi would enjoy" mean for you? :) what kind of example things would you say that of?

It's like some kind of retro RAS Syndrome

"Snob" used to mean a low-class pretender, not a jerk of high social class. The abbreviation was "S. Nob", or "without nobility". (Sine is Latin for "without.")

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