Barry Sternlicht, the real estate mogul and Founder and CEO of Starwood Capital Group, has been quite pessimistic about New York City’s future under the new mayor Zohran Mamdani. Long-time investor in a very emphatic manner on his interview with CNBC, he declared that the city might experience "a really tough time" and even "turn into Mumbai" if the progressive policies of Mamdani hamper the developers, scare off the investors, and increase the housing crisis, as he infers.
Sternlicht, known for developing some of the world’s most prominent luxury hotels and real estate assets, said he is already considering moving his team out of New York, citing spiralling costs and the political climate.
“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,” Sternlicht said.
The warning comes days after Zohran Mamdani’s historic mayoral victory on November 4, 2025, which made him the first Muslim and Indian-origin mayor of New York City — and its youngest in a century.
Mamdani, a Democratic Socialist, ran for office on issues such as affordable housing, social equity, and welfare-based urban reform.
He promised that he would start putting into practice a bold package of initiatives, among them:
- A rent freeze on rent-stabilised apartments;
- Universal free childcare for children aged six months to five years;
- Free citywide bus services; and
- Five city-owned grocery stores, one in each borough, to tackle food insecurity.
Mamdani’s campaign. which drew inspiration from both grassroots activism and Bollywood-style cultural energy, appealed strongly to working-class voters and immigrant communities. But critics like Sternlicht argue that such sweeping welfare initiatives, if unfunded or poorly structured, could destabilize the real estate market and push away capital.
Sternlicht said that while Mamdani’s ideals sound noble, they ignore the harsh financial realities of development in a city already burdened by high construction costs, red tape, and rigid union laws.
‘Every project in New York has to go union’
Sternlicht was particularly critical of New York’s powerful trade unions, which he blamed for escalating costs across the real estate sector.
“Over $100 million, every project in New York has to go union, and it’s super expensive. It leads to extremely expensive housing. And 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,” he said.
According to Sternlicht, the combination of union dominance, complex regulation, and progressive political rhetoric has made it “nearly impossible to build affordable housing economically” without massive government subsidies.
Disagreement over policy priorities
The billionaire investor said that while Mamdani’s intent to help renters and low-income families is understandable, his policies misdiagnose the root of the housing crisis.
“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,” Sternlicht said.
Sternlicht’s remarks reflect a growing sentiment among developers and property investors who worry that rent freezes and stricter tenant protections could reduce rental revenues, discourage construction, and further limit housing supply. the very opposite of what Mamdani’s platform promises.
Beyond economics, Sternlicht also raised alarms over public safety, pointing to Mamdani’s past calls to “defund the police” — a position that drew both praise and backlash during his campaign.
“If people feel their kids aren’t safe on the streets, they’ll leave,” Sternlicht said. “If he defunds the police or doesn’t give them the honour they deserve, the city’s in for a really tough time.” Sternlicht suggested that declining public safety could drive families out of the city and weaken neighbourhood stability, a trend he compared to earlier urban downturns New York faced in the 1970s and early 1990s.
‘New York is going to make it — but the situation will deteriorate first’
In spite of all his critiques, Sternlicht gave a somewhat positive view of the city’s power to bounce back when he recalled that New York has been through a lot and has come out strong many times in the past.
“New York will survive,” he said. “It will probably get a lot worse before getting better.” He added that leaders should focus on inspiring entrepreneurship and rewarding productivity rather than overtaxing those who have succeeded.
“Maybe he’ll learn from history. Maybe the million people who voted for him won’t realise that socialism has never worked anywhere on the planet Earth, ever,” he remarked.
A symbolic shift in America’s political landscape
Zohran Mamdani, who was born in Uganda, his victory is a sign of a massive change both culturally and politically in one of the largest cities in the US. Being the youngest mayor-elect, the 34-year-old, is in many ways a standard example of the fresh wave of left-leaning, socially progressive, and primarily focused on issues such as housing, diversity, and equitable distribution leaders coming from the urban youth.
His victory is a loud signal that immigrant voices and progressive politics have a great say in U.S. urban governance which is contrary to the reaction of investors and developers who are worried that New York will lose its economic competitiveness.
It is a question of time whether Mamdani will be able to reconcile his ambitious social goals with the city's financial realities. At the moment, Sternlicht's warning is felt in both Wall Street and City Hall, a reminder that the struggle between social idealism and economic pragmatism may be the main theme of New York's growth.
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