And more often than not, the people behind the purchases are hidden by shell companies.
Here, as in other roosting places of the superrich, the recent influx of foreign money has gone hand in hand with the rising use of shell companies — generally limited liability companies. Shell companies were used in three-quarters of purchases of over $5 million in Los Angeles over the last three years, a higher rate even than the roughly 55 percent in New York, according to a New York Times analysis of data from PropertyShark. What is more, in Los Angeles, where so many of the new palaces are spec houses — luxury magnets for global wealth — not only are the buyers shielded by shell companies, but the developers are, too.
L.L.C.s were created to protect individuals from legal liability, and they have a range of legitimate uses. In an interview, Mr. Hadid said he used L.L.C.s for liability reasons, adding, “One hundred percent of the time that people build, they create an L.L.C.”
Today in Los Angeles, as at 901 Strada Vecchia, L.L.C.s have provided insulation — some would say impunity — amid a gathering anti-development backlash.
“That’s my — that’s the property I’m developing,” Mr. Hadid explained. “I’m the developer. I develop for other people.”
Law enforcement officials and anticorruption groups worry that while many foreign buyers are simply seeking to safeguard their wealth in United States real estate, some are using shell companies to hide illicit gains, despite ....