Billionaire real estate investor Barry Sternlicht had some harsh words for the newly elected mayor of New York City, Zohran Mamdani. Sternlicht is Chairman and CEO of Starwood Capital Group, which has both commercial and residential holdings and joint ventures in the city, as well as its own offices in Midtown Manhattan.
Sternlicht blamed overly expensive development and management costs on unions and said he only expected it to get worse in the Mamdani administration.
“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,” said Sternlicht in an interview with CNBC Property Play, which will be released in full next week.
“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.”
Mamdani’s central housing platform focused on freezing rents, but Sternlicht, who said he did not speak with the mayor-elect before the election nor did he contribute to his opponent, former Governor Andrew Cuomo, disagreed with his strategy.
“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 also expressed concern about public safety in the city.
“That’s the number one thing. If people feel like their kids aren’t safe on the streets, they will pull them out of school and they will leave. And if he defunds the police or he doesn’t give them the honor and prestige they deserve, I think the city’s in for a really tough time,” said Sternlicht.
He did say that he believes New York will survive, but will probably get a lot worse before it gets better. He said Starwood Capital is already considering vacating its New York offices, especially given what he called anger at success in the city, which was part of Mamdani’s rise to power.
“Maybe he’ll have, he’ll learn from history. Maybe the million people that voted him won’t realize that socialism has never worked anywhere on the planet Earth, ever,” said Sternlicht.
“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.
