New York City is heading for a “really tough time” under mayor-elect Zohran Mamdani, warned real estate billionaire Barry Sternlicht, CEO of Starwood Capital Group, who said he is considering moving his team out of the city. Sternlicht blamed New York’s powerful trade unions for driving up construction and property management costs, saying the situation could worsen under Mamdani’s democratic socialist administration.
Mamdani’s Policy Promises
Following his historic victory, Zohran Mamdani pledged to move quickly on his campaign commitments including freezing rents in rent-stabilised apartments, providing free bus services, launching a universal childcare programme for children aged 6 months to 5 years, and opening five city-owned grocery stores, one in each borough.
“Unions Rule New York” speaking to the media, Sternlicht said high union costs have made housing development in New York prohibitively expensive.
“Over $100 million, every project in New York has to go union, and it’s super expensive. It leads to extremely expensive housing,” Sternlicht said.
His firm, Starwood Capital Group, owns both commercial and residential properties and has joint ventures across the city.
The billionaire added that while some developers have tried negotiating with unions, progress has been difficult.
“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,” he remarked.
Concerns Over Housing Policy
Commenting on Mamdani’s proposed rent freeze and tenant protections, Sternlicht warned of potential fallout.
“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.
Sternlicht acknowledged that Mamdani was at least addressing the right problems but argued that his approach could backfire economically.
“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 added.
Public Safety Concerns
The billionaire also expressed worries over public safety under Mamdani’s leadership, pointing to the mayor-elect’s previous calls to “Defund the Police” during his campaign.
“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,” Sternlicht warned.
He revealed that Starwood Capital is already considering moving its Midtown Manhattan office elsewhere due to concerns over the city’s future.
“Maybe he’ll … learn from history. Maybe the million people who voted for him won’t realize that socialism has never worked anywhere on the planet Earth, ever,”
he added.
