Billionaire investor Barry Sternlicht, chairman and CEO of Starwood Capital Group, sharply criticised New York Mayor Zohran Mamdani’s rent freeze plan, warning it could devastate the city’s housing market and erode investor confidence. In an interview with CNBC, Sternlicht said Mamdani’s proposal — to freeze rents because tenant incomes have stagnated — would trigger widespread nonpayment and cripple the city’s already fragile real estate sector.
Sternlicht argued that the combination of powerful unions, high construction costs, and the mayor’s rent control agenda would drive developers out of New York. “Every project over $100 million has to go union, which makes it super expensive,” he said. “When the far left says tenants don’t have to pay, and you can’t evict them, people will stop paying altogether. You’ll turn New York City into Mumbai.”
He warned that Mamdani’s socialist-leaning policies would discourage private investment, choke housing supply, and ultimately worsen affordability. “New York City is in for a really tough time,” he said. “Socialism has never worked anywhere. Maybe he’ll learn from history.”
Sternlicht, whose firm owns major commercial and residential assets across Manhattan, said that excessive regulation and inflated labour costs already make construction unviable. Layering a rent freeze on top, he said, would destroy incentives to build new housing. “The real issue is supply. If you want affordable housing, you need developers to participate. But that requires serious government subsidies,” he noted.
Beyond housing, Sternlicht also warned of growing urban decay and safety concerns. “If people don’t feel safe, they’ll leave. If you defund the police or undermine them, it’s over for the city,” he said.
Mamdani’s rent freeze proposal, the centrepiece of his mayoral campaign, aims to cap rents at current levels for all rent-stabilised units while strengthening eviction protections. The Democratic Socialist argues that stagnant wages justify immediate relief for tenants, even at the expense of landlords and developers.
However, real estate experts and economists caution that such measures could have long-term consequences. According to Reuters, industry leaders fear the plan will make it harder for landlords to maintain or renovate ageing buildings and deter new construction altogether.
Sternlicht’s remarks echo a broader concern in New York’s business community — that Mamdani’s policies, while popular among renters, could push the city toward economic stagnation. As Sternlicht put it, “If you destroy confidence in ownership, you destroy the foundation of the city’s economy.”
