- New York faces major challenges under mayor-elect Zohran Mamdani, warns billionaire Barry Sternlicht
- Sternlicht fears Mamdani's rent policies may lead to widespread nonpayment and housing instability
- He also raised concerns over public safety and possible business relocation from Midtown Manhattan
New York City is looking up to a "really tough time" under mayor-elect Zohran Mamdani, warned real estate billionaire Barry Sternlicht, who said he is considering moving his team out of the Big Apple. The Starwood Capital Group CEO blamed New York's trade unions for sky-high development and management real estate costs in New York but cautioned the problems would worsen under the democratic socialist's regime.
After his victory, Mamdani has vowed to immediately start working to implement his campaign promises, including freezing rents in rent-stabilised apartments, providing free bus services, creating a universal, free childcare programme for children ages 6 months to 5 years and opening five city-owned grocery stores, one in each borough.
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On Rent Freeze
Speaking to CNBC, Sternlicht said, "Over $100 million, every project in New York has to go union, and it's super expensive. It leads to extremely expensive housing."
Sternlicht's company, the Starwood Capital Group, has both commercial and residential holdings and joint ventures in New York.
The billionaire noted that 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."
Talking about Mamdani's housing policy, Sternlich said, "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 neighbour finds out the neighbour 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.
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'Real Issues'
The billionaire claimed Mamdani was "focusing on" the core issues of the city. "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 accommodating on their work laws and the wages and everything else; otherwise you can't add economically,” he said.
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Public Safety In New York
Sternlicht also feared that the public safety in New York could deteriorate under Mamdani, who, on his campaign trail, was confronted over his previous calls to “Defund the Police”.
“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 honour and prestige they deserve, I think the city's in for a really tough time,” he warned, adding that his company is already considering leaving its office in Midtown Manhattan.
“Maybe he'll … learn from history. Maybe the million people who voted for him won't realise that socialism has never worked anywhere on the planet Earth, ever,” he added.
Ugandan-born Mamdani – the city's first Muslim mayor-elect and the first of South Asian descent – appealed to a broad spectrum of voters in a city known for its diversity and won four out of five of the city's boroughs.
