Real Estate Mogul Sternlicht Warns NYC Faces “Really Tough Time” Under Mamdani

Real Estate Mogul Barry Sternlicht issued a stark warning on Tuesday about the future of New York City under incoming Mayor Zohran Mamdani, predicting a "really tough time" marked by skyrocketing costs and potential exodus of businesses, as the democratic socialist's aggressive policies could transform the Big Apple into a chaotic urban sprawl reminiscent of Mumbai. The Starwood Capital Group CEO, whose firm holds significant commercial and residential assets in the city, revealed he is already scouting relocation options for his Midtown Manhattan office amid fears of deteriorating public safety and economic viability.

Sternlicht laid much of the blame at the feet of New York's powerful trade unions, which he described as an insurmountable barrier to affordable development, forcing every project over $100 million into costly union labor that inflates housing prices and stifles supply. He recounted how other developers have attempted negotiations only to be rebuffed, underscoring how these entrenched interests make blue states like New York prohibitively expensive for growth and innovation in the real estate sector.

Turning his fire on Mamdani's flagship housing proposal—a freeze on rents for stabilized apartments—Sternlicht painted a dire scenario of cascading non-payment and landlord bankruptcies, where tenants learn they can skip bills without eviction, leading neighbors to follow suit and ultimately collapsing the market. "The far left gets really nuts and says the tenants don't have to pay," he told CNBC, warning that such measures would erode incentives for maintenance and new construction, plunging the city into the kind of overcrowded, under-serviced conditions seen in densely populated Mumbai.

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While acknowledging Mamdani's focus on genuine urban challenges like housing shortages, Sternlicht argued that true progress demands government subsidies and union concessions on wages and work rules to make projects economically feasible, rather than punitive policies that deter investment. He expressed deep concern over Mamdani's past advocacy for "Defund the Police," predicting it could embolden crime and make streets unsafe for families, prompting mass departures from schools and neighborhoods, and further hollowing out the city's economic core.

The Ugandan-born Mamdani, New York’s first Muslim mayor-elect and the youngest in over a century, swept four out of five boroughs on November 4 by appealing to diverse voters with bold promises including free buses, universal childcare for kids aged 6 months to 5 years, and five city-run grocery stores. Sternlicht, undeterred by the historic win, quipped that socialism's track record worldwide offers little hope, urging Mamdani to learn from history before his "million voters" realize the experiment's pitfalls.

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