It seems that the Vancouver housing market has been floating on top of a huge pool of drug money.
The stately $17-million mansion owned by a suspected fentanyl importer is at the end of a gated driveway on one of the priciest streets in Shaughnessy, Vancouver’s most exclusive neighbourhood.
A block away is a $22-million gabled manor that police have linked to a high-stakes gambler and property developer with suspected ties to the Chinese police services.
Both mansions appear on a list of more than $1-billion worth of Vancouver-area property transactions in 2016 that a confidential police intelligence study has linked to Chinese organized crime.
The study of more than 1,200 luxury real estate purchases in B.C.’s Lower Mainland in 2016 found that more than 10 per cent were tied to buyers with criminal records. And 95 per cent of those transactions were believed by police intelligence to be linked to Chinese crime networks.
The study findings, obtained by Global News, are a startling look at what police believe to be the massive money laundering occurring in the Vancouver-area real estate market.
They are also an indication of how — according to police intelligence sources — Canada’s narcos are hiding the huge amounts of cash they are amassing from the fentanyl crisis, which resulted in the deaths of thousands of Canadians last year.
While the study only looked at property purchases in 2016, an analysis by Global News suggests the same extended crime network may have laundered about $5-billion in Vancouver-area homes since 2012.
There's more at the link.
The amounts involved are staggering. They certainly illustrate the almost complete, abject failure of efforts to contain the use of illegal drugs. Even more, they illustrate how an entire market area - in this case, housing - can become just as addicted to, and dependent on, the profits of the drug trade as those who are addicted to its products. I'm informed by friends in law enforcement circles that any attempt to intervene in such markets (they exist here in the USA, too) in order to prevent money-laundering is often actively resisted by those profiting from the sale of real estate, and/or the appreciation in the value of their own properties. Drug money has corrupted entire regions in that way, up to and including local politicians. (That's not surprising, of course - the same happened with bootleggers during Prohibition. Ask Al Capone.)
The problem is, it's not confined to luxury housing. As values rise at the top end of the market, so pressure grows to build more high-end housing to meet the demand. That, in turn, means that middle- and lower-end housing is bought in order to demolish it and build "better" houses on the property thus made available. The supply of affordable housing grows smaller, which pushes up the price of what remains. That's great for those already owning property(ies) in the area, but lousy for those wanting to buy their first home at an affordable price.
I'd love to know how many major urban areas are affected by an influx of drug money, and the proceeds of other crimes as well. I suspect it's a bigger problem than we think.