Billionaire real estate investor Barry Sternlicht, the chairman and CEO of Starwood Capital Group, said New York City under new mayor Zohran Mamdani will turn into Mumbai as he pledged to freeze rents because tenants’ incomes have stagnated. Sternlicht who has both commercial and residential holdings in NYC said when one neighbor finds out that their neighbor is not paying, they stop paying and thus NYC will turn into Mumbai. “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,” Sternlicht said in an interview with CNBC Property Play, reacting to Mamdani’s win. “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,” he said. Sternlicht said his New York team is considering leaving the city as well. “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,” he said. Sternlicht said rent freezing is not the solution but increasing housing is.
New York will survive, but will get worse before it gets better
Sternlicht said he believed New York will survive but will first gets 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.
