Bill Ackman says the reason it is so expensive to live in New York City is not capitalism but City Hall.

In a wide-ranging interview with Fortune Editor-in-Chief Alyson Shontell for the Fortune 500 Titans and Disruptors of Industry podcast series, the Pershing Square CEO argued that New York’s affordability crisis is a policy failure rather than a market failure — and that Mayor Zohran Mamdani’s rent-freeze agenda is making the problem worse.

“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.”

The remarks come months after Mamdani, a self-described democratic socialist, took office and delivered on a signature campaign promise: in June, New York City’s Rent Guidelines Board voted 7-1 to freeze rents on one- and two-year leases for nearly one million rent-stabilized apartments, the first such freeze on two-year leases in the city’s history. Mamdani called the vote “a historic victory for New York City tenants.” Ackman disagreed.

A market split down the middle

Ackman’s central argument is structural. He said New York’s rent-stabilization system has effectively divided the housing market in two, with landlords compensating for frozen income on one side by raising rents on the other.

“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 said. “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.”

He also pointed to what he described as another consequence of rent regulation: landlords removing units from the market because they cannot recover renovation costs under current rules. That issue matters beyond a single building, because housing supply in New York is already tight and each unit kept vacant or off-limits adds pressure to the rest of the market.

“About 60,000 units are off the market because renovation costs can’t be recovered under rent regulations,” he said. As of April 2026, the state reported more than 57,000 vacant rent-stabilized apartments.

Advocacy groups and city data have long tracked a large inventory of vacant rent-stabilized units, although the underlying causes remain disputed. Tenant groups and some housing researchers argue that deregulation, not stabilization, has done more long-term damage to affordability, noting that more than 300,000 units were deregulated between 1994 and 2019. A Moody’s analysis cited by tenant advocates found that a five-year rent freeze would put only about 6% of multifamily loans citywide at risk of default by 2030.

Energy costs and the build-more argument

Ackman extended the same policy critique to New York’s energy costs, which he also blamed on government decisions rather than market forces.

“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. That’s just bad policy, and we can fix a lot of it with better policy.”

Ackman may have been referring to the Constitution Pipeline, which filed for approval in 2012, had New York’s Department of Environmental Conservation deny the required water-quality permit in 2016, saw that denial upheld by the Second Circuit in 2017, and after years in regulatory limbo had its application withdrawn in November 2025 — roughly 13 years after the process began, with the pipeline never built.

On real-estate policy, he contrasted New York with two other examples. Florida, he said, is “an incredibly well-managed state that recently voted to eliminate real estate taxes, purely through good policy.” That is somewhat exaggerated, although broadly in line with current developments: the Florida state legislature has placed a property-tax-reduction measure on the November 2026 ballot, and it still requires 60% voter approval; it would phase in a larger homestead exemption rather than eliminate property taxes outright.

Austin, Ackman said, has seen rents fall “significantly because it’s easy to build,” a supply-side argument echoed by researchers who have described New York’s housing shortage as “self-inflicted and solvable” through zoning and permitting reform. That is not an exaggeration; Austin rents have been falling for several years.

Ackman drew a clear conclusion: “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.”

The wealth he wants to keep — and the tax he doesn’t

Ackman’s housing critique is tied to his broader view of which kinds of wealth New York should attract.

He spoke positively about billionaire Ken Griffin investing in the city and paying roughly $250 million for an apartment, a purchase that was the subject of a controversial Mamdani TikTok video.

“That purchase makes a building economically viable, which creates construction jobs and brings in wealthy residents who pay taxes,” Ackman argued.

“You want the top earners — who are a small share of the population — paying a large share of taxes,” he said, estimating that the top 10% of earners generate 70% of tax revenue. “That’s not particularly unfair. But you don’t want to discourage people like Elon Musk from locating their businesses here.”

He linked that view to his opposition to Mamdani’s other major revenue idea, a pied-à-terre tax on second homes owned by non-residents, as well as to California’s wealth tax, warning that such levies often expand beyond their original scope.

“They say it’s ‘one time,’ but it’s never one time,” Ackman said. “Income taxes started out small too and only applied to a few people.”

Recent Fortune reporting has separately noted that Mamdani’s pied-à-terre tax push has run into complications tied to the city’s large population of unregistered “ghost cars” and absentee owners, underscoring the enforcement challenges such taxes can face in practice.

When the conversation turned to socialism, Ackman was direct: “The answer isn’t socialism — socialism is a disaster.” He then added, “Watch what happens to New York City if Mamdani succeeds in implementing these plans.”

Ackman’s public criticism of Mamdani dates back to the mayoral primary, when he pledged to fund a centrist alternative and called Mamdani’s platform “disastrous for NYC.”

A billionaire’s case for capitalism

The housing debate is part of a larger argument Ackman made throughout the interview: that capitalism, not government redistribution or philanthropy, is the most effective tool for addressing affordability and inequality.

Ackman has long said that a person’s significance is ultimately measured by how positively they affect the largest number of people.

He also connected the discussion to the so-called wealth effect of stock-market participation, saying nearly half of Americans are not taking part in equity gains and tracing that dynamic in part to support for candidates like Mamdani.

Rather than argue that the United States is too dependent on stock-market wealth, Ackman took the opposite view.

“Wages can’t compound as quickly as stocks, so everyone needs to participate in the stock market in order to believe in capitalism,” Ackman said. That is the rationale he has given for pitching the Trump administration on what became the “Trump savings plan,” a 401(k)-style account with a government match aimed at workers without employer retirement plans.

Whether Ackman’s diagnosis matches New York’s housing data remains disputed, but as Mamdani’s rent freeze takes effect, the debate over who is responsible for the city’s affordability crisis is intensifying. Ackman, who has 2.7 million followers and a direct line to the White House, appears unlikely to back away from the fight.

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.

This story was originally featured on Fortune.com