US Investor Says Mamdani’s Policies Could Drive New York Into Housing Crisis

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Billionaire real estate investor Barry Sternlicht, chairman and CEO of Starwood Capital Group, has warned that New York City could face an urban decline similar to Mumbai’s if upcoming rent control and tenant protection measures are implemented without balance.

In a recent interview with CNBC’s Property Play, Sternlicht said that policies proposed by New York Mayor Zohran Mamdani, including rent freezes and stronger tenant rights, could discourage property investment, reduce maintenance standards, and lead to the physical decay of buildings across the city.

“You look at Mumbai,” Sternlicht said. “It’s full of beautiful colonial buildings that are rotting because their owners can’t earn a return on them. That’s what happens when you freeze rents and ignore economics.”

The billionaire investor, whose firm manages billions in global real estate assets, argued that if landlords cannot cover rising costs, they will have no incentive to maintain or improve properties. “When tenants see others not paying rent, they stop paying too,” he warned, adding that the domino effect could harm both tenants and the broader housing market.

Sternlicht also criticized New York’s high construction costs, saying that large projects typically over $100 million are burdened by union mandates that drive up expenses. “When it’s too costly to build, supply drops. And when supply drops, affordability becomes worse,” he explained.

His comments come amid growing debate over housing reform in New York. Supporters of Mamdani’s policies argue that rent freezes and tenant protections are essential to combat displacement and rising living costs. Critics, however, fear the measures could trigger a decline in private investment and replicate issues seen in older, rent-controlled cities abroad.

Sternlicht’s comparison to Mumbai highlights the broader tension between social equity and economic sustainability in urban housing. As New York grapples with a severe housing shortage, his remarks add fuel to an already heated discussion about how far rent control policies should go and what unintended consequences they might bring.