One common argument against new housing in high-cost cities is that the rise of global capitalism makes demand for urban housing essentially unlimited: if new apartments in Manhattan or San Francisco are built, they will be taken over by foreign billionaires in quest of American real estate, who will use the apartments as banks rather than actually living in them or renting them out.
It seems to me that this argument would be more likely to be true if a huge percentage of New York’s housing was used by foreign billionaires. But a recent article in Politico New York suggests otherwise. The article says that 89,000 New York apartments are owned by absentee owners (many of whom presumably rent them out). However, most of these apartments are not owned by Russian oligarchs or other global capitalists; for example, the co-op unit I rented a few years ago in Forest Hills (market value around $300K) was owned not by a foreign oligarch, but by the building’s former super.
Presumably, the condos and houses likely to be owned by wealthy foreigners are the most expensive ones. So how many of these units were worth $5 million or more. Only 1554- a drop in the bucket in a city of 8 million people.
And how many of the units were worth over $25 million? Only 445.
So super-rich absentee owners are few and far between, and thus probably do not affect housing supply very much.
