Billionaire Barry Sternlicht Warns of New York City's Transformation Under Mamdani
Billionaire real estate investor Barry Sternlicht, the chairman and CEO of Starwood Capital Group, has issued a stark warning about the future of New York City under the administration of new mayor Zohran Mamdani. Sternlicht believes that New York will transform into Mumbai, a city known for its overpopulation and economic challenges, if Mamdani follows through with his plans to freeze rents due to stagnant tenant incomes.
Sternlicht, who has significant commercial and residential holdings in New York City, argues that the city's real estate market is already burdened by union regulations and high costs. He explained, “Over $100 million, every project in New York has to go union, and it’s super expensive. It leads to extremely expensive housing. 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.”
The billionaire investor is particularly concerned about the far-left policies that Mamdani represents, particularly the idea that tenants should not have to pay rent if they cannot afford it. Sternlicht stated, “And then the far left gets really nuts and says the tenants don’t have to pay. Well, you can’t kick them out if they don’t pay. So the neighbor finds out the neighbor isn’t paying, and they don’t pay, and the next guy doesn’t pay, and then you’re basically going to turn New York City into Mumbai.”
Sternlicht's concerns are not just theoretical. His New York team is considering leaving the city due to the challenging business environment. He emphasized, “The core issues are not what he’s focusing on. We need to increase housing. That’s not going to happen easily, right? You need serious subsidies from the government if they want us to work with unions. The unions have to be more accommodative on their work laws and the wages and everything else, otherwise you can’t add economically.”
Sternlicht is clear that rent freezing is not the solution to New York's housing crisis. Instead, he advocates for increasing the supply of housing. He believes that this can only be achieved through more flexible union agreements and government support. “Rent freezing is not the solution but increasing housing is,” he said.
Despite his concerns, Sternlicht remains optimistic about New York's long-term future. He predicts that the city will survive but will first get a lot worse before it gets better. “People are working really hard. Just how do we help others to do well and believe in the American dream? That’s probably a better message for a leader in the city than saying, let’s just tax everyone who’s been successful, force them to leave and then have to rely on Washington for handouts to basically keep the city going,” Sternlicht added.
In summary, Barry Sternlicht's warnings about the potential transformation of New York City under Mayor Zohran Mamdani highlight the complex and often contentious relationship between real estate developers, unions, and city policies. While the future remains uncertain, Sternlicht's insights provide a critical perspective on the challenges and opportunities facing one of the world's most iconic cities.
