Barry Sternlicht: New York Billionaire Warns of Mumbai-like Future Under Mamdani

Billionaire investor Barry Sternlicht has ignited a heated debate with his recent comments about New York City's future under the leadership of Mayor Zohran Mamdani. Sternlicht, a prominent figure in the real estate industry, warned that Mamdani's proposed rent-freeze and housing policies could turn New York City into a scenario reminiscent of Mumbai.

Sternlicht, the founder, chairman, and CEO of Starwood Capital Group, expressed his concerns in an interview with CNBC Property Play. He argued that Mamdani's influence in America's richest city could lead to rent defaults and drive investors away. Mamdani, a democratic socialist, has been advocating for policies aimed at taxing the rich, which have not been well-received by many of New York City's affluent residents.

One of the key issues Sternlicht highlighted is the cost of union labor in New York. 'Over $100 million, every project in New York has to go union, and it’s super expensive. It leads to extremely expensive housing,' he said. 'And other developers have tried to cut deals with the unions, but they rule New York, and that’s one of the key reasons the blue states are so expensive and they’re so difficult to add supply of housing to,' Sternlicht added.

The billionaire also raised concerns about the potential for a domino effect if tenants find out their neighbors are not paying rent. 'And then the neighbor finds out the neighbor isn’t paying, and they don’t pay … and then you’re basically going to turn New York City into Mumbai,' he stated. Sternlicht’s comments have gone viral, sparking a broader debate about housing affordability and the influence of investors in the city.

Sternlicht’s company, Starwood Capital Group, is a global private investment firm he co-founded in 1991. He also heads Starwood Property Trust, one of the largest publicly traded real estate investment trusts in the United States. Born in New York City in 1960 and raised in Connecticut, Sternlicht graduated magna cum laude from Brown University and later earned an MBA from Harvard Business School.

His father was a Polish Holocaust survivor, and his mother was a stockbroker and biology teacher. Over the years, Sternlicht has built an empire across real estate, hospitality, and finance, managing assets worth more than US$100 billion. He is credited with launching the W Hotels brand and transforming Starwood into a global powerhouse.

While Sternlicht’s comments have drawn criticism, they also highlight the ongoing tension between affordable housing policies and the interests of real estate investors. The future of New York City’s housing market remains a topic of intense discussion and debate.