Billionaire investor Bill Ackman has issued a sharp warning that New York City's rent freeze, tax policies, and restrictions on real estate development risk deepening the city's affordability crisis by deterring both construction and investment.

In a wide-ranging interview with Fortune published Wednesday, the Pershing Square Capital Management founder argued that government policy is the primary driver of rising housing and energy costs across New York. His comments come amid a intensifying national debate over how cities should balance tenant protections with incentives for new housing supply, as soaring costs put pressure on residents from Boston to San Francisco.

"The answer isn't socialism — socialism is a disaster," Ackman said. "Watch what happens to New York City if [Mayor Zohran] Mamdani succeeds in implementing these plans."

Ackman traced the city's housing shortage partly to regulatory rules that make development prohibitively difficult and expensive. "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," he said.

New York City's Rent Guidelines Board voted in June to freeze rents on one- and two-year leases for rent-stabilized apartments, which cover roughly one million units in a city where median rents have long ranked among the highest in the nation. Ackman argued that rent controls effectively shift additional costs onto tenants in market-rate units. He also claimed that approximately 60,000 apartments have been withdrawn from the market because landlords are unable to recover renovation expenses under current regulations.

"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," Ackman said. He pointed to Austin, Texas, as an example of a city where expanded construction helped bring rents down — a case frequently cited by economists who argue that increasing housing supply is the most reliable long-term lever for reducing costs.

Ackman also attributed New York's elevated cost of living to state energy policies. "Why are energy costs so high in New York State? 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," he said. "That's just bad policy, and we can fix a lot of it with better policy."

Turning to taxation, Ackman argued that New York should create conditions that encourage wealthy individuals and businesses to invest in the city rather than risk driving them to competing jurisdictions. The remarks reflect a broader concern among New York officials about retaining high earners, particularly after pandemic-era outmigration to lower-tax states such as Florida and Texas pressured the city's tax base.

"You want people like Ken Griffin locating Citadel here — spending $250 million on an apartment, because that purchase makes a building economically viable, which creates construction jobs and brings in wealthy residents who pay taxes," Ackman said. "You don't want to discourage people like Elon Musk from locating their businesses here."

Ackman has previously been critical of New York City's new pied-à-terre surcharge, which applies to certain high-value properties not used as an owner's primary residence. He also criticized California's Proposition 40, which could impose a one-time tax equal to 5% of the net worth of billionaires who were California residents on January 1, 2026.

"Look at what's happening in California right now with the wealth tax — they say it's 'one time,' but it's never one time," he said.

Beyond housing and taxes, Ackman addressed what he described as a broader structural challenge facing the U.S. economy: the large share of Americans who have not directly benefited from stock market gains. The concern reflects data showing that a significant portion of U.S. households hold no direct equity investments, meaning years of market appreciation have largely bypassed them.

"One of our biggest challenges as a country is that almost half the country isn't participating in the growth in value created by capitalism — the stock market," he said. He argued that workers without retirement accounts or equity investments are less likely to believe the economic system serves their interests.

"Part of that is people feeling left behind — wages can't compound as quickly as stocks, so everyone needs to participate in the market to believe in capitalism," Ackman said.

Mamdani could not immediately be reached by FOX Business for comment.

FOX Business' Michael Dorgan and Alex Nitzberg contributed to this report.