My daughter and son-in-law both work at good jobs in Vancouver. They live in a rented condo that's smaller than the cabin of some sailboats I've been on. That's Vancouver living today.
The house I bought 30-years ago for about $160,000 now goes for about 2.5-million or higher just for the land alone. The kids know they'll never be able to live where my daughter once nestled in her crib. Not a chance.
Those charming 40's bungalows are a thing of the past. Monster houses, McMansions, now spread from lot line to lot line. The lawns and gardens we used to carefully tend are gone. The place looks overrun, hideous.
Despite these massive, multi-million dollar houses, my old neighbourhood has become the poorest in Vancouver - at least based on reported income. Nobody there, it seems, makes any money. That's not to say there's any poverty, far from it. It's just that the money that might be taxed is offshore.
What infuriates so many older people is how many of these multi-million dollar residences - homes and high rise - stand empty. What's going on? Well, it's called "money laundering" and neither Ottawa nor Victoria wants to know.
It's a contagion that has also swept the tony cities of the United States.
...in an economic context, there is more to this new American urbanization wave than the return of the middle class, young upwardly mobile professionals and immigrants.
In fact, they increasingly find themselves priced out of America’s largest cities.
Instead, as has happened in London before, such cities are becoming playgrounds for the super-rich — and not only native ones. Foreigners are buying up high-end real estate in U.S. cities – and developers cater ever more directly to foreign buyers and investors.
Multimillion-dollar properties are often bought for cash and transactions are executed through anonymous offshore shell companies. Even among known owners, there are plenty of crooks and shady characters. Meanwhile, no one has any idea how those who prefer to remain hidden made their money.
No one cares, either. As long as the money is not related to Islamic terrorism, the U.S. government turns a blind eye to its provenance.
But, like all easy money, this massive international money laundering operation comes with considerable risks attached.
A year ago, a series of articles appeared in the New York Times, detailing how hard it is to identify who exactly the super-rich buying New York City apartments are.
The few that the Times dug out made a nice rogue’s gallery, with misdeeds ranging from corruption and malfeasance to tax evasion and suspected links to organized crime.
New York City remains the most outrageous example of America’s foray into money laundering. The southern end of Central Park has been turned into a veritable theme park for the global “one percent,” with apartments going for as much as $100 million.
Savor the irony: The U.S. Treasury goes hard after Americans doing shady things with their money abroad, but it welcomes other countries’ nationals doing the same thing in the United States itself!
As Calvin Coolidge observed nearly 100 years ago, “The chief business of the American people is business.” It still rings true, but the nature of America’s business is constantly changing.
In Coolidge’s time, the United States was a manufacturing giant and it remained so until the 1970s. It gradually turned to services and information technologies by the end of the 20th century.
But now, with the emergence of a sizeable international class of “one-percenters” and increased flows of untraceable funds through the global financial system, America is emerging as a safe haven for the world’s super-rich and their money – honest and ill-gotten alike.
American officials understood that widespread corruption and thievery destabilizes the global community. Not so anymore.
As a result, the world is full of criminal gangs reaching across international borders and making alliances on different continents.
These gangs are able to move massive amounts of money. They also enjoy protection from kleptocratic regimes.
While the United States is fighting the old war against funding for Islamic terrorists, a new massive threat is quietly emerging under its nose.
And then there are domestic repercussions. Regional real estate bubbles are being inflated in many markets across the United States, even as home prices on average remain stable – and some regions are still depressed. New York is a prime candidate for a spectacular implosion.