Miami’s luxury housing market fueled by ill-gotten gains

The latest big Wikileaks event shows what has been fueling Miami’s luxury housing boom:

Mossack Fonseca’s leaked records offer a glimpse into the tightly guarded world of high-end South Florida real estate and the global economic forces reshaping Miami’s skyline.

And MF’s activities bolster an argument analysts and law-enforcement officials have long made: Money from people linked to wrongdoing abroad is helping to power the gleaming condo towers rising on South Florida’s waterfront and pushing home prices far beyond what most locals can afford…

A Miami Herald analysis of the never-before-seen records found 19 foreign nationals creating offshore companies and buying Miami real estate. Of them, eight have been linked to bribery, corruption, embezzlement, tax evasion or other misdeeds in their home countries.

That’s a drop in the ocean of Miami’s luxury market. But Mossack Fonseca is one of many firms that set up offshore companies. And experts say a lack of controls on cash real-estate deals has made Miami a magnet for questionable currency.

Later in the article, one analyst suggests no one really wants to know this information as luxury housing is a big deal. Who benefits? City leaders who get to trumpet the new growth. Local construction firms, people in real estate, and the finance industry who are involved with the new units. Municipalities like the new tax dollars. Possibly, nearby business owners who could see an uptick in activity with more people nearby who have money to burn. And the whole region benefits from the status of some of the world’s wealthiest people plus an attractive (and expensive) housing market.

If this is happening in Miami, it is also likely affecting other important cities. Take New York: as the leading global city, wouldn’t people who have ill-gotten gains want to be there? Or, how about other leading cities in different regions like London, Hong Kong, and Tokyo?

 

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