Solve the Global Housing Crisis by Recognizing Buyers

the suburbs

The cost of housing has skyrocketed since the banker-caused 2008 financial crisis and there are no signs of prices stabilizing. In Toronto we’ve seen the price of housing rise faster than wages and the same can be said for nearly every major city on the planet. A key reason this is happening stems from using housing as a commodity for money laundering. Yes, that’s right the cost of your house is higher because governments are letting criminals artificially inflate the market.

In the states, like elsewhere, housing can be bought by secretive numbered companies (which don’t disclose who owns what). So the American Treasury ran a very simple pilot project to stop money laundering through real estate by looking into these secretive buyers. They made insurance companies find out who actually owned companies that were buying luxury real estate in a few cities.

It also seems to have had an effect on the market. Since the scheme started, there has been an almost 70% drop in companies buying real estate with just cash, according to an academic paper published last year. Those figures suggest that “anonymity plays a significant role” in people using secretive shell companies to buy property, and money-laundering was a “likely cause” for wanting that secrecy, Ville Rantala, a finance professor at Miami Business School and co-author of the paper, told Quartz after the paper’s publication last summer.

This is more than just a moral issue—it has national security implications. Rantala pointed to Russians hit by sanctions after the Kremlin’s efforts to sway the 2016 presidential election. “If there are these kinds of loopholes, it’s hard to know whether people targeted by sanctions may be able to make purchases in the US—so there’s really cause to be concerned about anonymous buyers,” he said.

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The Panama Papers Worked

money

Tax evasion is a problem in every country and it’s up to teams of investigative journalists to expose mass illegal international operations. A few years ago the Panama Papers exposed an efficient tax dodging operation by a large group of wealthy people. The results of the exposure from the Panama Papers has led to millions being collects in countries with more results coming in.

Not only did the Panama Papers catch a bunch of criminals it also proves investigative journalism works.

More than a dozen people are in prison or awaiting sentencing in Ecuador, the United States and Panama for their roles in a bribery scheme at the Ecuadorian state petroleum company that was exposed in the huge document leak.

In South Korea, the leak led to bribery indictments against a former army general and a former executive of a major defence company.

And in Pakistan, former prime minister Nawaz Sharif has been serving a seven-year sentence after the Panama Papers revealed assets his family had hidden overseas. He is appealing his conviction, calling the charges against him politically motivated.

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