Can new disclosure laws help relieve Seattle’s housing market?
New rules from the U.S. Treasury Department now requires King County buyers paying for houses in cash to disclose their identity to law enforcement. Can this provide potential relief to the city’s already-expensive market?
In many large cities with expensive housing markets, shell companies will buy up property, pay in cash, and keep their identity a secret. Essentially, regular people looking to buy a home get outbid by anonymous LLCs with deep pockets. The growing concern at a top level is that criminal elements take advantage of that anonymity to launder ill-gotten money.
Now, all-cash buyers in King County have to disclose their identity to law enforcement. And while that’s great for combating the money laundering angle, there’s still a wall between the general public and useful information about who’s buying up local real estate.
“I’m really less interested in finding out whether or not a celebrity bought a house on Lake Washington, but what I do care about is finding out who (is) purchasing the expensive properties,” said KIRO Radio’s Mike Lewis on the Tom and Curley Show.
“Are the fears legit that a lot of local housing stock are being bought up by foreign investors? I do think that that is something worth letting people know,” he added.
Cities and countries across the world have taken even more extreme steps to battle similar problems.
“It’d be nice to know, if you’re in an area experiencing some pressure on housing, that you could find out where these houses are going — in fact they rewrote law in Vancouver, B.C. based entirely on this premise,” noted Lewis.
North of the Canadian border in Vancouver, British Columbia, buyers are required to disclose their name, citizenship, and social insurance number if they purchase a home through a corporation or trust. New Zealand enacted an even more stringent regulation in August, banning all sales of homes to foreign buyers.
With foreign buyers flooding a large swathe of big housing markets, the hope is that limiting anonymity will at least help pull back the curtain. In King County, though, the main goal revolves around the crime angle, much to the chagrin of the general public.
For KIRO Radio’s Tom Tangney, his own familiarity with an all-cash home buyer isn’t quite what other people have experienced.
“My only experience of someone paying in cash for a house would be my co-host, John Curley — I didn’t realize John was doing something nefarious, it never occurred to me,” Tangney joked.