Wealthy foreigners have gotten the idea that New York City is a good place in which to invest. You got a problem with that?
Apparently many people do, based on reaction to a recent New York magazine piece about the extraordinary influx of capital flowing into the city’s real estate market. The piece noted that billionaires from abroad are snapping up condos with price tags as high as $90 million. In some cases, the new owners are occasional visitors to the city, and may be investing in Manhattan real estate simply for pragmatic reasons. Developer Michael Stern explained that very wealthy people from around the world are “basically looking for a safe-deposit box.”
And they’ve found it in midtown Manhattan.
Most other cities would welcome this vote of confidence from the global elite. But this is New York, birthplace of Occupy Wall Street. The incredible building boom in Midtown, fueled by money from abroad, has led not to chest-thumping but soul-searching. Should we feel guilty that the wealthy wish to live here—and spend their money here?
The global elite can set up shop anywhere. If they don’t feel welcome in New York, well, there are nice penthouses available in Miami, Zurich, London and Tokyo. New York has to compete with other world-class cities to attract mobile capital. The fact that wealthy world citizens have chosen New York as their “safe-deposit box” means that they believe in the city’s continued vitality and fiscal stability.
They will spend money here, and that means they will create jobs here. They will pay taxes, but they are unlikely to make much use of the services available to them. That sounds like a good deal for all concerned.
New York has long been home to some of the world’s richest people. During the Gilded Age, the great capitalists of the era built homes on Fifth Avenue and created the template for today’s so-called “billionaire’s row” in Midtown. New York welcomed the Rockefellers and, yes, their money. Similarly, today’s New York should—and for the most part, does—welcome the investments of billionaires from overseas.
There was a time when the rich (and not so rich) believed the city was not a sound investment, and they acted accordingly. Even the faux populists wouldn’t wish for a return to those days, would they?