An article titled “Stream of Foreign Wealth Flows to Elite New York Real Estate” appeared in the New York Times over the weekend, kicking off a five-part series in which the paper, essentially, explains why the bulk of Manhattan is a ghost town at night. The pieces that followed included profiles of a “mysterious Malaysian financier,” a “besieged Indian builder,” “Mexican power brokers,” and, today, “the Russian minister and friends.” Taken together, they make for a chilling portrayal of what is means to live large in Manhattan circa 2015.
If you are a billionaire foreigner with money achieved through shady means, then New York, as our city ambassador Taylor Swift put it, “is waiting for you” — or, at the least, the opportunity to buy a luxury condo in Time Warner’s building at Columbus Circle through a shell corporation is yours. High-end real estate is a way for you to hide your assets.
It’s an infuriating article, and it makes the point quite cleanly that corrupt oligarchs are able to continue their work by squirreling money and assets away through shell corporations in New York real estate. But what was also striking about the piece was the notes regarding how the one percent buying up real estate makes the city worse. “As nonresidents, they pay no city income taxes and often receive hefty property tax breaks,” the Times writes, and they treat the city as a pieds-à-terre, contributing very little to the local economy, while the obscene prices of their real estate (there is a $100 million dollar condo in Manhattan) drive up prices everywhere.
And most of all — it just makes the city lame. You can see it at night. Flavorwire’s offices are in Soho, which becomes a ghost town after 6 PM. The lofts and apartments that once housed a vibrant artistic community — the feeling of which is captured in art like Rachel Kushner’s critically acclaimed 2013 book The Flamethrowers — no longer feel like anyone’s home.
“It’s the flip side of the 1970s, where there were empty buildings and nobody wanted to live in them,” says Will Hermes, the author of Love Goes to Buildings on Fire, a book that details the special alchemy that created great music ranging from the Talking Heads to the birth of hip hop in ’70s New York. “There was a flight from the city, which left buildings open for people to do cool stuff.” Now, Manhattan’s empty buildings are vacation homes, or full of expensive apartments that no one actually lives in, and neighborhoods have been ceded to tourists. “It’s like a mall and a giant hotel, and everything’s booked.”
For Hermes, the magic that led to New York’s 1970s scene came from rent control. “It ensured a mix of economic backgrounds, and now we’re dealing with the rise of condominium culture and the erosion of rent control,” he says. Some of Manhattan’s ghost-city status, Hermes says, has to do with Brooklyn’s rise as a new center for the arts. That happened because of the huge difference in affordability between Brooklyn and Manhattan — but these days, Brooklyn is getting just as many new condos with foreign money.
What’s happening in New York in general, and Manhattan in particular, is not germane to just this city. There are other places in the world that are mostly hideaways for the one percent, from Doha to London. But it’s emblematic of a worrying trend. When cities cede their limited space to empty buildings and empty money, they lose vibrancy in the process. A city is at its best when it has a community of people, alert and engaged, committed to its functionality and its energy. What’s happening in Manhattan these days feels connected to what goes on at the end of capitalism; the world’s great cities are reduced to ghost towns and tourist-villes, malls that close at 6 PM, hotels that are mere liminal spaces between here and some other place. The real action is happening elsewhere.