Billionaire real estate investor Barry Sternlicht has harsh words for newly elected New York City Mayor Zoran Mamdani. Mr. Sternlicht is Chairman and Chief Executive Officer of Starwood Capital Group. Starwood Capital Group has its own offices in midtown Manhattan, as well as commercial and residential stocks and joint ventures throughout the city.
Sternlicht blamed the unions for too high development and administration costs, and said he expected them to get worse under Mamdani.
“Every project in New York is over $100 million, you have to unionize, it’s super expensive. That leads to very expensive housing. And other developers are trying to terminate their contracts with unions, but unions control New York. That’s one of the main reasons blue states are so expensive and it’s so difficult to add housing supply,” Sternlicht said in an interview with CNBC Property Play, which will be published in full next week.
“And the far left got so mad that they said they don’t have to pay their tenants. Well, if they don’t pay, they can’t evict them. So when they realize their neighbors aren’t paying, and they don’t pay, and the next person doesn’t pay, they’re basically going to turn New York City into Mumbai.”
Mamdani’s central housing policy focused on rent freezes, but Sternlicht disagreed with his strategy, saying he had not spoken to the mayor-elect before the election and had not donated to his opponent, former Gov. Andrew Cuomo.
“He’s not focused on the core issues. We have to have more housing. That’s not going to be easy, is it? If the government wants us to work with the unions, we need big subsidies from the government. The unions have to be more tolerant about labor laws and wages and everything else. Otherwise we can’t add anything economically.”
Sternlicht also expressed concern about security in the city.
“That’s the biggest thing. If people don’t feel safe for their kids on the streets, they’re going to pull them out of school and they’re going to leave. And if he doesn’t defund the police and don’t give kids the honor and prestige that they deserve, I think the city is going to be in for a really tough time,” Sternlicht said.
He said he believes New York will survive, but it will probably get worse before it gets better. He said Starwood Capital was already considering vacating its New York offices, especially in light of what he called anger over Mamdani’s success there as part of his rise to power.
Sternlicht said, “Perhaps he will, and he will learn from history. Perhaps the millions of people who voted for him will not realize that socialism has never worked anywhere on earth before.”
“People are working really hard. How do we help other people do well and believe in the American dream? That’s probably a better message for city leaders than to tax everyone who’s successful and force them out and basically say they have to rely on Washington for handouts to keep their cities afloat,” Sternlicht added.
