By Lina Irawan 
Ackman’s analysis cuts directly to the heart of a contentious debate in urban economics: the role of government intervention versus market forces in shaping the affordability and dynamism of major cities. "Let’s use New York City as a microcosm, starting with the cost of housing," Ackman told Fortune. "It’s so high because left-wing mayors have made it very difficult for developers to build here, and Mamdani, by freezing rents, is just going to make the problem worse." This statement encapsulates a long-standing argument from developers and free-market advocates who contend that excessive regulation, restrictive zoning, and convoluted permitting processes choke off housing supply, inevitably driving up prices.
These comments land months after Mayor Mamdani, who swept into office on a wave of progressive enthusiasm, delivered on a central campaign promise. In June 2026, the New York City Rent Guidelines Board, in a decisive 7-1 vote, approved a historic measure to freeze rents on one- and two-year leases for nearly one million rent-stabilized apartments. This marked the first time in the city’s history that two-year leases faced a rent freeze, a move hailed by Mayor Mamdani as "a historic victory for New York City tenants." For Ackman, however, this legislative triumph is a grave misstep, one that will ultimately harm the city’s economic health and its most vulnerable residents.
A Market Split Down the Middle and the Illusion of Affordability
Ackman’s core argument against rent stabilization is structural, asserting that the system has effectively cleaved New York City’s housing market into two distinct, unequal segments. "In many New York City buildings, roughly half the tenants are in rent-stabilized apartments with frozen rent, and the other half are at market rate," Ackman explained. "So landlords raise rents on the free-market half to generate enough cash flow to cover their interest expense. That’s bad policy contributing to the affordability problem."
This dynamic, often referred to as a "cross-subsidy," means that market-rate tenants implicitly bear the cost of maintaining artificially low rents for stabilized units. Landlords, faced with fixed operating costs, rising property taxes, and the inability to significantly increase revenue from a substantial portion of their portfolio, are compelled to maximize income from their unrestricted units. This can lead to disproportionately high increases in market-rate rents, creating an even wider chasm between the fortunate few in stabilized units and the majority struggling in the open market. Economist and urban planning experts frequently point to this unintended consequence of rent control, arguing it distorts market signals and ultimately benefits a subset of tenants at the expense of overall housing supply and affordability for others.
Beyond the cross-subsidy, Ackman also highlighted a specific and often overlooked consequence of stringent rent regulation: the quiet removal of housing stock from the market altogether. He asserted that approximately 60,000 units are currently off the market because landlords cannot recover the costs of necessary renovations under existing rent regulations. As of April 2026, state reports indeed indicated over 57,000 vacant rent-stabilized apartments, a figure that has long been a point of contention between tenant advocates and landlord groups.
For property owners, the economic calculus is straightforward: if the projected rental income from a renovated, rent-stabilized unit does not justify the significant capital expenditure required for upgrades (e.g., plumbing, electrical, kitchen/bathroom modernizations, lead paint abatement), the unit may remain vacant. Landlords argue that the permitted rent increases for "Individual Apartment Improvements" (IAIs) or "Major Capital Improvements" (MCIs) are often insufficient to recoup substantial renovation costs within a reasonable timeframe, especially for older buildings requiring extensive work. This effectively incentivizes "warehousing" units or converting them to other uses if feasible, further constricting the already tight housing supply.
However, the underlying causes of these vacancies and the long-term damage to affordability are fiercely contested. Tenant advocacy groups and some housing researchers offer a counter-narrative, arguing that deregulation, rather than stabilization, has inflicted far greater and more enduring harm on affordability. They point to the staggering figure of over 300,000 units that were deregulated between 1994 and 2019, primarily due to high-rent vacancy deregulation, which allowed units to exit stabilization once they reached a certain rent threshold and became vacant. This historical context suggests that the gradual erosion of the rent-stabilized stock has contributed significantly to the current crisis. Furthermore, some analyses, like a Moody’s report cited by tenant advocates, suggested that even a five-year rent freeze would place only about 6% of multifamily loans citywide at risk of default by 2030, implying that the financial impact on landlords might be less catastrophic than some claim. These differing perspectives highlight the complexity of NYC’s housing woes, where historical policy shifts, market dynamics, and political ideologies intertwine.
Energy Costs: Another Policy Failure?
Ackman extended his critique beyond housing, applying the same policy-centric lens to New York’s persistently high energy costs. Here again, he attributed the burden on consumers and businesses to strategic governmental decisions rather than uncontrollable market forces. "Why are energy costs so high in New York State?" Ackman queried. "Because we’ve shut down nuclear power, it takes 15 years to get a pipeline approved, and we’ve banned fracking — so we’re importing natural gas from Pennsylvania. That’s just bad policy, and we can fix a lot of it with better policy."
This assessment resonates with energy industry advocates and some policy analysts who argue that New York State’s aggressive environmental policies, while laudable in their intent, have come with significant economic trade-offs. The closure of the Indian Point Energy Center, a major nuclear power plant in Westchester County, in 2021, for example, removed a significant source of carbon-free baseload electricity from the grid. While environmental groups celebrated the closure, critics argued it led to increased reliance on natural gas-fired power plants, potentially driving up energy costs and negating some of the carbon reduction benefits.
Ackman’s reference to pipeline approvals likely alludes to protracted battles like the Constitution Pipeline. This ambitious project, designed to transport natural gas from Pennsylvania’s Marcellus Shale region to New York and New England, was initially filed for approval in 2012. However, New York’s Department of Environmental Conservation (DEC) denied the crucial water-quality permit in 2016, a decision upheld by the Second Circuit Court of Appeals in 2017. After years trapped in regulatory limbo and facing intense environmental opposition, the company ultimately withdrew its application entirely in November 2025 – roughly 13 years after the process began, with the pipeline never built. This saga is often cited by critics as an example of how state policy and regulatory hurdles can impede infrastructure development vital for energy supply and cost stability, forcing the state to import natural gas at higher prices via existing, often constrained, pipelines. The statewide ban on hydraulic fracturing (fracking) for natural gas, enacted in 2015, further limited in-state energy production, intensifying reliance on external sources.
The "Build More" Argument: Lessons from Contrasting Examples
To bolster his argument for policy-driven solutions, Ackman presented two contrasting real-estate policy examples: Florida and Austin, Texas. He characterized Florida as "an incredibly well-managed state that recently voted to eliminate real estate taxes, purely through good policy." While Ackman’s phrasing contains a slight exaggeration, the sentiment holds a kernel of truth. The Florida state legislature has indeed placed a significant property-tax-reduction measure on the November 2026 ballot, requiring 60% voter approval. This measure, if passed, would phase in a larger homestead exemption rather than eliminating property taxes outright, aiming to reduce the tax burden on homeowners. Florida’s broader regulatory environment, often perceived as more development-friendly than New York’s, is frequently cited by advocates of less government intervention as a model for fostering economic growth and attracting residents.
Austin, Texas, offered another compelling data point for Ackman. He noted that rents in Austin have fallen "significantly because it’s easy to build." This observation is not an exaggeration, as Austin rents have indeed been declining for several years, a phenomenon directly linked to a substantial surge in housing construction. The city has implemented various zoning reforms, streamlined permitting processes, and reduced parking minimums, effectively lowering barriers to new development. This supply-side approach has led to a rapid increase in housing units, demonstrating how policy choices can directly influence affordability by boosting supply to meet demand. Researchers and urbanists advocating for zoning reform in cities like New York often hold up Austin as a prime example of a "Yes In My Backyard" (YIMBY) success story, proving that increased density and reduced regulatory burdens can lead to tangible improvements in housing affordability.
Ackman distilled a clear lesson from these comparative analyses: "If you make it hard to build where people want to live, and you don’t let landlords recover renovation costs, they’ll pull units off the market." This encapsulates the supply-side economic perspective that underpins much of his critique, emphasizing that regulatory environments that disincentivize development and maintenance will inevitably lead to shortages and higher prices.
The Wealth He Wants to Keep — and the Tax He Doesn’t
Ackman’s housing critique is inextricably linked to his broader vision for New York City’s economic future and his perspective on who should be welcomed within its borders. He spoke approvingly of billionaire Ken Griffin’s substantial investments in the city, including his controversial $250 million purchase of an apartment – a transaction that was notably the subject of a critical TikTok video from Mayor Mamdani. "That purchase makes a building economically viable, which creates construction jobs and brings in wealthy residents who pay taxes," Ackman argued.
This perspective underscores a key tenet of trickle-down economics: that attracting and retaining high-net-worth individuals and businesses creates a virtuous cycle of investment, job creation, and tax revenue that ultimately benefits the entire city. "You want the top earners — who are a small share of the population — paying a large share of taxes," he stated, estimating that the top 10% of earners generate 70% of tax revenue. While the exact percentage can fluctuate based on methodology, it is widely acknowledged that a disproportionately large share of New York City and State tax revenue comes from high-income earners. "That’s not particularly unfair," Ackman continued. "But you don’t want to discourage people like Elon Musk from locating their businesses here."
He drew a direct line from this principle to his vehement opposition to Mayor Mamdani’s other major revenue idea: a "pied-à -terre" tax on second homes owned by non-residents. Ackman also warned against the perils of California’s proposed wealth tax, cautioning that such levies rarely remain contained. "They say it’s ‘one time,’ but it’s never one time," Ackman asserted, invoking historical precedent. "Income taxes started out small too and only applied to a few people." This argument taps into fears of "tax flight," where wealthy individuals and businesses relocate to more tax-friendly jurisdictions, potentially eroding the city’s tax base. Recent Fortune reporting has independently noted the practical complications facing Mamdani’s pied-à -terre tax push, citing issues tied to the city’s large population of unregistered "ghost cars" and difficulties in identifying absentee owners, underscoring the formidable administrative and enforcement challenges inherent in such levies.
When addressing socialism directly, Ackman did not mince words: "The answer isn’t socialism — socialism is a disaster." He then issued a stark warning: "Watch what happens to New York City if Mamdani succeeds in implementing these plans." Ackman’s public posture toward Mamdani dates back to the mayoral primary, where the investor pledged to fund a centrist alternative candidate and publicly declared Mamdani’s platform "disastrous for NYC," signaling a deep ideological divide.
A Billionaire’s Case for Capitalism and Broadened Participation
Ackman’s housing critique is but one facet of a broader philosophical argument he advanced throughout the interview: that capitalism, with its inherent mechanisms for innovation, wealth creation, and efficient resource allocation, is the most effective tool for solving complex societal challenges like affordability and inequality. He positions capitalism as superior to government redistribution or traditional philanthropy, arguing for its systemic ability to improve lives on a grand scale. Ackman has long maintained that an individual’s true significance in life is ultimately measured by the positive impact they have on the largest possible number of people, suggesting that the mechanisms of capitalism, when properly harnessed, offer the greatest potential for such widespread benefit.
He also connected the affordability debate to a broader concern about the "wealth effect" of equities investment. Ackman lamented that nearly half of Americans are not participating in the stock market’s gains, a disparity he traces back, in part, to public support for candidates like Mamdani whose policies he believes undermine capital markets. Rather than advocating for America to reduce its reliance on stock-market wealth, Ackman took the opposite view, arguing for universal participation. "Wages can’t compound as quickly as stocks, so everyone needs to participate in the stock market in order to believe in capitalism," Ackman posited. This rationale underpinned his pitch to the Trump administration for what became known as the "Trump savings plan," a 401(k)-style account with a government match, specifically designed to bring workers without employer-sponsored retirement plans into the fold of equity ownership. His belief is that broader stock market participation would not only create more financial security for individuals but also foster a stronger societal belief in the capitalist system itself.
Whether Ackman’s diagnosis of New York City’s economic ailments holds up against the city’s complex socio-economic data remains a fiercely contested subject among economists, policymakers, and residents alike. However, as Mayor Mamdani’s rent freeze takes effect and other progressive policies gain traction, the fight over who or what is truly to blame for New York’s enduring affordability squeeze is only getting louder. Bill Ackman, with his significant financial influence, a substantial public platform, and a direct line to national political figures, is clearly not planning to go quiet in this ongoing ideological battle for the soul and solvency of New York City.
For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.
Watch Fortune’s full interview with Bill Ackman, here.
