London mayor targets ‘ghost mansions’ and ‘zombie flats’

THEY are not hard to spot, if you know where to look, especially at night — the floors of swanky new apartments, most of the windows dark, almost all the time. The zombie flats. Owned, but empty.

And on this cobbled mews in Chelsea? On that private walk in Kensington? No one home, either.

There’s enough empty property here to be given a name in the British news media: the “ghost mansions” of “lights-out London,” the streets where it is alleged that seven in 10 addresses are second — or third or fourth — homes.

The blight of conspicuous empty homeownership is a big story in London — and around the globe. But a solution is surprisingly elusive. London faces a crushing shortage of affordable housing, because the city is a global magnet for aspirational newcomers, a safe refuge for stash-your-cash capital and a victim of its own smashing success, even in these anxious Brexit days.

“Affordable” here being a relative term, where the average price for a flat last year was $713 143.

It is especially brutal for young people, those in the middle income range and first-time buyers.

So London Mayor Sadiq Khan vowed to tax the empties.

The rising Labour Party star, who has sparred with President Trump, campaigned on the populist issue of the injustice of foreign ownership and ghost mansions, promising that Londoners should get “first dibs” on new construction.

This month, Khan appealed to Parliament to give London’s local governments new authority to seriously jack up taxes for high-value homes left empty by the international elite.

Whether Khan’s plan to tax the vacant rich will do much to solve the affordable-housing crunch is unknown. The experts say it is dubious. Why? In part, because the rich are immune from a relatively puny bump in taxes.

And it’s not like they will move out of their rarely occupied townhouses and a dozen needy families will move in.

The London mayor is not alone in casting about for ways to solve his city’s housing shortage.

The “empty home” phenomenon has gone viral in hot postal codes around the world — and it is especially visible in cities such as Miami, Hong Kong, Vancouver, B.C., Dubai, Singapore, San Francisco and Sydney, where foreign buyers and their shell companies gobble up units as investment properties and piggy banks.

In Manhattan, the New Yorker magazine had a look at Census Bureau numbers, which revealed that in Midtown — from 49th to 70th streets, between Fifth and Park avenues — nearly 1 in 3 residences are unoccupied at least 10 months a year.

Newsweek estimated that in Paris, “one apartment in four sits empty most of the time.”

In Jerusalem, the deputy mayor said the number of ghost flats is triple the official estimate, and bemoaned the impact on young families searching for a bit of living space.

But how to stop or slow or tax the empty units is uncharted territory — including whether it is even possible or desirable.

Susan Emmett, head of housing and urban regeneration at Policy Exchange, a London-based think tank, said that the city has a real housing problem but that empty luxury apartments are a scapegoat.

“What it does,” she said, “it gives us a focal point for a sense of injustice, and people can point to something that is big and shiny and say, ‘Look, I’m struggling to pay my rent for a rubbish flat and there’s this enormous building and nobody is living there.’ You can understand that anger and it’s pretty real, and I can understand Khan wants to do something about it.”

Yet it’s not clear that the mayor’s proposals would make a dent. Labour leaders have proposed tripling taxes on the highest-end properties — from today’s tops of about $2 500 to tomorrow’s $7 500 a year.

Most of London’s 20 000 empty units aren’t owned by the super-rich, but by the middle and lower rungs — and studies show that most homes are empty because they are the subjects of inheritance tussles or uninhabitable or in need of repairs.

When faced with the reports, Khan retreated to say that in London, “just one home left unoccupied is one too many,” which is not much of a campaign slogan.

Housing experts say Khan’s tax plan could hurt the middle class and would probably not change the behavior of the most wealthy absentee owners.

“The global ultrarich, they’re a strange breed — so far at the end of the income distribution curve that they’re essentially immune from such pressure,” said Kath Scanlon, a housing expert at the London School of Economics and Political Science.

Scanlon, who wrote one of the reports for the mayor, said she imagines that tripling property taxes for the well-to-do with empty homes will do little.

She called proposed bumps “trivial” for the owners. “It’s pocket change for them,” Scanlon said.

Studies commissioned by the mayor revealed that the share of entirely empty homes in London overall is actually quite low — maybe 1 percent — and although 20 000 empty units sounds large, this is a city of almost 9 million residents. Still, a lot of the most visible high-end empty property is in central London.

Ghost mansions and zombie penthouses were once a stealthy phenomenon, propelled by Saudi sheikhs and Russian oligarchs. They’re still players.

But now an overseas investor for new property in London is more likely to be a middle-class family from China, Malaysia or Singapore, and they’re not buying $25 million Georgian mansions, as former New York mayor Michael Bloomberg did — and then left it mostly empty, according to the Guardian newspaper.

Instead these foreign buyers from Singapore and Hong Kong are snapping up apartments worth less than $500 000, and most of the flats are quickly rented out, according to a pair of studies by the London School of Economics and the University of York.

London is struggling to increase the number of affordable homes in a highly politicised environment, where average mortals feel squeezed out of their own city by the moneyed classes and overseas buyers.

The inequalities were placed in stark relief after the devastating conflagration in June at Grenfell Tower, a 24-story public-housing building and a proven firetrap, where at least 80 people died.