"NYC’s multibillion-dollar enigma," the Chinese immigrant real estate market, and Atlantic Yards/Pacific Park

A 10/3/16 article in the Real Deal, NYC’s multibillion-dollar enigma, has the subheading "A deep dive into the inner workings of the city’s Chinese immigrant real estate market."

Some of it is relevant to Atlantic Yards/Pacific Park condo purchases, as it notes the penchant for wealthy Chinese nationals to gain a beachhead in New York and the cultural predilection for Chinese in the U.S., however modest their incomes, to buy property.

Write Konrad Putzier and Cathaleen Chen regarding the wealthy, among them with green cards via EB-5:

Unlike the city’s more seasoned Chinese immigrants — many of whom first settled in Chinatown and later flocked to Flushing — new buyers are increasingly looking in prime Manhattan neighborhoods, including Midtown and the Upper West Side, in some cases paying all cash for condo units. Extell Development’s One Manhattan Square and the Oosten in Williamsburg, for instance, are targeting China’s upper middle class with condos that start at the $1 million mark.

Surely 550 Vanderbilt, with its own marketing in China, should be considered part of that group.

The authors hint at, with elaboration, some shadiness:

It’s an industry that doesn’t always operate by the same rules as New York’s more traditional real estate scene. Business is almost always conducted in Chinese, while some of the practices that have traveled over from China clash with American laws and regulations, according to sources. These invisible barriers explain why the real estate industry serving Chinese immigrants remains an enigma, even for many who consider themselves experts on the city’s real estate market.

A cultural bent

Particularly interesting is the notion of a cultural bent toward ownership:

“For young people, the idea is you have to have a home to start a family,” Min Zhou, a UCLA sociologist who has written books about Chinese-Americans and New York’s Chinatown, told TRD. “They don’t like the idea of renting. It’s a cultural tradition.”

That includes severe frugality, allowing people to save while living crammed in small spaces, plus unusual forms of financing, including family "gift money," without formal requirement for repayment, to enable unusually large down payments, thus putting seemingly expensive units or houses within reach of families with modest monthly income.

Part of that is also because, as the authors write, there's a significant cash economy among Chinese community in New York, meaning that households have low reported income and no history of credit.

The general preference for ownership, as well as the marketing, might also explain the presence of Chinese-Americans, not just Chinese nationals, among the 550 Vanderbilt buyers.