New York City is in for a “really tough time” under socialist Zohran Mamdani, according to a warning from a billionaire real estate investor who said he is considering moving his team out of the Big Apple.
With trade unions to blame for already sky-high development and management costs in New York real estate, the problems will get far worse under the newly-elected mayor’s regime, Starwood Capital Group CEO Barry Sternlicht told CNBC.
“Over $100 million, every project in New York has to go union, and it’s super expensive. It leads to extremely expensive housing,” said Sternlicht, whose company has both commercial and residential holdings and joint ventures in the city.
“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,” he added, during the interview with CNBC’s “Property Play” due to be released in full next week.
Sternlicht also referenced Mamdani’s central housing policy to freeze rents in rent-stabilized properties in New York.
“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.
“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 accommodating on their work laws and the wages and everything else, otherwise you can’t add economically,” added Sternlicht, who said he had not spoken to Mamdani in the run-up to the Nov. 4 election, nor contributed to the campaign of his main opponent, ex-Gov. Andrew Cuomo.
Sternlicht also brought up public safety in New York, a key issue in the campaign which saw Mamdani confronted over his previous calls to “Defund the Police.”
“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,” Sternlicht warned.
Sternlicht said his company is already considering leaving its office in Midtown Manhattan, after hitting out at Mamdani’s socialist ethos and what he called the growing anger at success in New York.
“Maybe 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,” he said.
