In a recent segment on Fox Business, host Cheryl Casone sat down with real estate magnate Don Peebles, and the message was clear: the housing markets in California and New York are on shaky ground. Peebles, founder and CEO of The Peebles Corporation, pulled no punches when assessing how progressive policies are reshaping the real estate landscape – and not for the better.
According to Peebles, left-wing lawmakers are pushing agendas that threaten the economic stability of major cities, especially New York and Los Angeles. In his view, developers, landlords, and investors are already preparing their exits. “We’re going to see more of the same,” Peebles said, comparing today’s conditions to the last time panic hit New York during Bill de Blasio’s 2013 mayoral win.
Zohran Mamdani’s Win Sparks Fear
Peebles’ warnings come on the heels of Zohran Mamdani’s shocking primary victory in New York, which has developers scrambling. Mamdani, a progressive Democrat, supports a rent freeze on stabilized apartments and a $100 billion housing plan funded by heavier taxes on millionaires and corporations.
Casone noted that many in the business world are preparing backup plans in case Mamdani clinches the general election. “It’s De Blasio all over again,” Peebles warned, citing the potential repeat of policy moves that once triggered an earlier exodus of business owners to Florida.
Real Estate Conversion Projects Under Threat
Casone highlighted a new concern: office-to-housing conversions that gained traction after the pandemic. These projects were a beacon of hope in repurposing empty office buildings into much-needed housing. But under Mamdani’s proposed policies, including mandatory subsidized housing and rent stabilization, developers may back out altogether.
Peebles confirmed the threat. “We’ve launched a fund to convert office buildings into residential use,” he explained, noting that cities from Boston to Atlanta are seeing progress, but New York remains a major challenge. According to Peebles, policies that increase taxes and add regulatory pressure will “slow things down” and potentially kill promising projects.
California Crisis Mirrors New York
The conversation didn’t stop with New York. Casone brought up California’s deepening affordability crisis and growing inventory problems. In response, Peebles described Southern California as “the most difficult place to do business in the United States.” He referenced a stalled $1.6 billion development project in downtown Los Angeles that was met with zero government support, even during the pandemic.
What’s even more alarming, Peebles said, is the false sense of relief in the California housing market. Inventory may be piling up, but not because supply is growing – it’s because people are leaving. “They have given up,” he said. “They’re going to other places.”
Leadership Vacuum in Real Estate
Peebles criticized both city governments and the real estate industry for failing to act sooner. “I’m astonished at the lack of leadership in the real estate industry in New York City overall,” he told Casone. He warned that Democratic moderates ignored the rise of candidates like Mamdani and are now playing catch-up.
He compared the current political landscape to 2013, when progressives began consolidating power. Back then, Peebles tried to rally support around Bill Thompson as an alternative to De Blasio, but the effort failed. Now, he sees the same pattern repeating, with moderates being pushed out and the party being “hijacked by the left wing.”
Trump Weighs In: “He’s a Communist”
The conversation turned even more political when former President Donald Trump weighed in during a separate interview on Sunday Morning Futures. Trump called Mamdani “a communist” and “very bad for New York.” While the remark was blunt, Peebles didn’t distance himself. “I’m in agreement with him,” Peebles said. “I’m shocked.”
To Peebles, the rise of progressive ideologies in economic hubs like New York represents a disconnect from the city’s role as a global center of capitalism. “The epicenter of capitalism has elected a socialist,” he said, stunned by the party’s shift.
Tax Policy Confusion Adds to Instability
Peebles also criticized the inconsistency between city and state tax policy, especially in New York. While Governor Kathy Hochul has said new tax hikes are “dead on arrival,” Mamdani’s campaign is pushing for higher taxes on corporations and property. This mixed messaging only deepens uncertainty for real estate developers and investors trying to make long-term plans.
He warned that if commercial real estate taxes are targeted—as he expects—they will add even more pressure to already failing housing projects and deter private investment in affordable and workforce housing.
Shortages and Demand Out of Sync
New York’s housing crisis isn’t a mystery. Peebles said the city is short 500,000 units of affordable housing and another 500,000 of workforce housing. That one-million-unit gap won’t close without help from the state – and he emphasized that the mayor alone can’t fix it.
Without a comprehensive tax incentive strategy, developers won’t build. Yet, instead of creating room for development, proposed rent freezes and tax increases could destroy the financial feasibility of new projects altogether. Peebles framed the issue simply: “That’s going to slow things down.”
More Exodus Coming – And Not Just to Florida
This isn’t just a blip, Peebles warned – it’s part of a larger trend. Businesses, investors, and individuals are leaving both New York and California not because they want to, but because they feel pushed out. “We’re going to see more of an exodus out of California,” he predicted.
He pointed to widespread dissatisfaction with declining quality of life, increasing regulatory burdens, and a lack of political support for businesses. It’s not just about taxes – it’s about feeling unwelcome and unheard.
The Leftward Shift and Business Backlash
One of Peebles’ strongest points was that Democratic moderates failed to take progressive challengers seriously. Instead, they assumed establishment candidates like Andrew Cuomo would easily hold onto power. That complacency, he said, left room for a wave of progressive victories.
Now, with cities like New York in political flux, the business community is scrambling to form coalitions and find a single candidate who can stand against Mamdani in the general election. Casone echoed that urgency, asking if the business community could unite fast enough to avoid “ruined businesses.”
Political Ideas Have Real-World Consequences
Here’s where I weigh in. What makes this story so compelling isn’t just the politics – it’s the tangible effect on cities. You can debate ideology all day, but when offices are empty, developments freeze, and people start leaving in droves, that’s real.
Don Peebles doesn’t come across as a fearmonger. He comes across as someone who’s seen what happens when policies don’t match economic reality. And right now, if cities like Los Angeles and New York don’t pivot quickly, they risk losing not just capital, but credibility as places where business can thrive.
The Road Ahead
Both Peebles and Casone made it clear: these aren’t isolated events. California and New York are at a tipping point. If progressive policies continue unchecked, more businesses will flee, more developments will stall, and the economic engines of these states could grind to a halt.
Whether or not Mamdani wins the mayoral race, the alarm has already sounded. And for many in real estate, finance, and business, the search for an exit has already begun.
Growing up in the Pacific Northwest, John developed a love for the great outdoors early on. With years of experience as a wilderness guide, he’s navigated rugged terrains and unpredictable weather patterns. John is also an avid hunter and fisherman who believes in sustainable living. His focus on practical survival skills, from building shelters to purifying water, reflects his passion for preparedness. When he’s not out in the wild, you can find him sharing his knowledge through writing, hoping to inspire others to embrace self-reliance.