Since the Great Recession, snapping up prime real estate in coastal American cities, sometimes sight unseen, has become an increasingly popular sport with China's wealthy. In 2014, for the first time, the Chinese bought more Manhattan apartments than did the Russians, according to Reuters. The strength of the U.S. dollar compared to the fragile yuan is making China's middle class a major force in the Brooklyn real estate market. The existing cultural infrastructure of its Chinatowns aside, the potential profit margin of owning property in Brooklyn's up-and-coming areas is hard to beat.

 

"You could purchase an income-producing property in a middle-class Brooklyn neighborhood like Bed-Stuy and see a 7 or 8 percent rate of return on a monthly basis from your rent rolls," said Jeanette Colegrove, a licensed real estate broker at Brown Harris Stevens in Brooklyn. According to January 2017 figures from the Elliman Report, a monthly survey of New York City rentals, the median rent in Brooklyn has risen to $2,750.

 

Then there's the potential of a property's yearly appreciation. While Manhattan apartment resale values fell 1 percent from 2015 to 2016, the price of Brooklyn town homes and apartments grew 16 percent. "Manhattan properties can't match that. The stock market can't match that," Colegrove said.

 

Real estate investment has proved to be a popular way for Chinese citizens to circumvent restrictions on foreign investment since 2007, when China's State Administration of Foreign Exchange instituted a strict yearly limit on foreign currency exchange, the equivalent of $50,000. U.S. real estate can promise higher yields, not to mention greater stability, than stashing the family savings in what was in 2016 the worst-performing Asian currency.

 

Despite the $50,000 cap, China's foreign direct investment in the United States hit a record $45.6 billion in 2016, according to a report by the Rhodium Group, a policy group that tracks global economic trends. That figure is triple the recorded amount of FDI that flowed from China to the United States in 2015, making the United States the world's largest recipient of Chinese foreign direct investment.

 

Dr. Peter Kwong, a professor of Urban Affairs and Planning at Hunter College who is a leading scholar on immigration, said for many middle-class Chinese, Brooklyn real estate represents far more than a long-term investment plan. It functions as a catalyst and anchor from which a pathway to citizenship, or at least better economic prospects through the legal right to live, study and work in the United States, can be forged. That's in large part thanks to the EB-5 federal visa program: Foreign investors who sink $500,000 into American residential or commercial projects that create at least 10 jobs become eligible for green cards for themselves, their spouse and their unmarried children.

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