Zohran Mamdani’s proposal for tougher rent controls across New York City could backfire — choking off new housing supply and ultimately hurting the left-wing firebrand’s own voters, a top Wall Street investor warned.
Drew McKnight, co-CEO of Fortress Investment Group, which manages $53 billion in assets, told The Post that Mandani’s agenda to freeze the cost of rent-stablized apartments “will make it uneconomic for property owners”.
Specifically, the Uganda-born lawmaker’s plans could “disincentivize any amount of conversions or incremental supply,” the 47-year-old Goldman Sachs alum told The Post in an exclusive interview on Wednesday.
“I sort of wince at whether those policies are likely to be effective,” McKnight said in a video call from Fortresses’s 48,000 square-foot Dallas headquarters. Jack Neumark is the firm’s New York-based co-CEO.
“You’ll just make it impossible to have new supply. Unfortunately, it could do damage to the people he’s trying to help.”
McKnight urged the mayoral frontrunner to follow the lead of San Francisco’s new mayor, Daniel Lurie, as a blueprint to lure investment to the city.
“The way you make housing more affordable is you make it easier to build, easier to permit,” he told The Post. “That’s the total opposite of what Mamdani is proposing.”
“Daniel is taking that on, and he’s attracting capital,” the University of Virginia graduate said. “Policy matters — and I think San Francisco’s curve is turning because of good leadership.”
Lurie defeated incumbent London Breed by pointing to how the Golden City had become the buzzword among Republicans as a symbol of crime and lawlessless.
“He’s got a lot of blue tape that he’s still got a cut through,” McKnight explained, echoing a term used by JPMorgan’s Dimon to describe overzealous regulations drafted by Dem lawmakers.
“He’s got a state that sometimes probably makes that harder than it should be. But I think within San Francisco, he’s doing a very, very, very good job,” he added.
Mamdani himself would benefit from his rent-freeze plan. He earns $143,000 annually as a state legislator, but he pays just $2,300 per month for a rent stabilized one-bedroom apartment in Astoria, Queens that he shares with his wife.
The rent regulation program, which caps how much landlords can raise rent each year on roughly 1 million apartments, does not currently include any income restrictions — something opponents have long pushed to change.
While the average rent stabilized household makes $60,000 annually, it is not uncommon for middle- or higher-income New Yorkers to live in the units, which sometimes rent for several thousand dollars per month.
McKnight’s comments came as New York’s financial services industry frets about the possible direction of the city’s economy if the 33-year-old failed rapper wins the race to replace Eric Adams at Gracie Mansion.
The Post reported in July how a string of Wall Street titans, including JPMorgan CEO Jamie Dimon, snubbed a meeting set up by business power broker Kathryn Wylde with the assemblyman.
But many top executives are now resigned to the fact that he looks set to win on polling day on Nov. 4, in just over two weeks.
