This is 432 Park Avenue:
It’s the newest addition to the New York City skyline, an ultra-luxury residential skyscraper in midtown Manhattan. With a top height of almost 1400 feet, it’s the tallest residential building in the world and the second tallest building in all of NYC, ahead of the Empire State Building, behind only the new One World Trade Center.
Despite its neck-craning height (it actually required approval from the FAA), 432 Park Avenue has only 104 apartments. The first one that sold went for $18 million, and prices go up – way up – from there. While it was still under construction, the penthouse apartment was sold, with great fanfare, for $95 million. Another penthouse in another NYC skyscraper, One57, sold for over a hundred million dollars.
The apartments in 432 Park have eye-popping views of the city and every lavish touch imaginable. Yet most of them won’t even be occupied. As many as three-quarters are expected to be vacant, because people aren’t buying them to live in, but as investments. Many are billionaires from corrupt oligarchies like Russia, China and the Gulf states, who buy property in the West as a convenient place to store their cash that’s out from under the eyes of their rulers.
This is a plague that’s struck many of the world’s great cities. London, too, is overrun by “safe-deposit boxes in the sky” – ultra-luxury properties that the world’s 1% buy to park their cash, not as places to live in. The Shard, the tallest skyscraper in the UK, is a case in point. Its top-floor apartments are vacant year-round, reportedly owned by oil-sheikh billionaires who drop in whenever they’re in town. Meanwhile, ordinary people are leaving the city in droves, unable to compete with elites bidding up property values into the stratosphere.
The list of ludicrous asking prices for mansions and estates all around the world goes on and on. There’s a $450 million palace on the French Riviera; a $700 million ranch in Texas; a $500 million, 74,000-square-foot compound in Los Angeles with a 30-car garage and its own casino.
It’s not just real estate where we’ve glimpsed the rarefied realm of the ultra-wealthy. We also saw it in the Panama Papers, which revealed how the rich evade taxes and other scrutiny by hiding their assets in a byzantine web of offshore shell companies:
One motivation for Christopher Ponsoldt to stash money overseas in accounts not traceable to him: He owned a dirt racetrack in Florida, and he was concerned racers “may get hurt and might then try to sue him for damages,” the law firm notes on his case file said.
It’s all so futile, this endless, zero-sum struggle to acquire more and more and more. Why does anyone need a hundred-million-dollar apartment? What are they trying to prove, and to whom? Doesn’t there come a point where it stops mattering how many digits there are on the balance sheet?
These super-rich people long ago passed the point where they could fulfill any desire a human being could possibly have. Having more money would, literally, be useless to them. Yet they continue to strive, to compete against each other for wealth and status, to see who can run the fastest in pursuit of the unreachable horizon. For all their riches and all their power, they’re living in slavery to the false belief that more money means greater happiness:
Not long ago an enterprising professor at the Harvard Business School named Mike Norton persuaded a big investment bank to let him survey the bank’s rich clients…. He asked these rich people how happy they were at any given moment. Then he asked them how much money they would need to be even happier. “All of them said they needed two to three times more than they had to feel happier,” says Norton. The evidence overwhelmingly suggests that money, above a certain modest sum, does not have the power to buy happiness, and yet even very rich people continue to believe that it does: the happiness will come from the money they don’t yet have.
Celebrities, athletes, actors and tycoons have spent themselves into bankruptcy because of the foolish belief that greater happiness would come from yet more consumption. In every case, they’ve been disappointed.
Here’s a better way to look at it: If you’re worth ten or five or even two million dollars, you’ve won. You’ve ascended to heights undreamed-of by the vast majority of human beings who have ever lived. You can withdraw from the rat race, quit the unwinnable competition for status, and lead a life of comfort and ease. There’s no point in making, keeping or spending more money than is needed to do that.
But there are millions of people for whom that money wouldn’t be useless. Those pent-up resources that are hoarded by the world’s wealthy or squandered in pointless status-seeking could make the difference between health and sickness, chaos and security, life and death for countless people in need. It’s unjustifiably selfish to keep to yourself what could do far more good for others.
It’s this recognition that’s led a marquee list of billionaires to join the Giving Pledge, promising to turn their fortunes toward philanthropy. It’s a start, but while more luxury skyscrapers and empty palaces are sprouting under the rain of useless money, we have a long way left to go.