Barry Sternlicht, a global investor, said on Tuesday that he believes there will be a mass exodus from U.S. cities to suburban neighborhoods and that fleeing from violent protests is a more motivating factor than the fear of the coronavirus.
“There’s hundreds of thousands of people looking for suburban homes, and I would say it’s not as driven by the Covid situation as it is safety and law and order, and that is now pervasive across the big cities of the United States, sadly,” Sternlicht told CBNC’s Squawk Box.
Sternlicht, who is the CEO of Starwood Capitol, said tax policy is another factor in the shift from urban to suburban neighborhoods, including New York City.
“If you tax the wealthy even more in New York City … and they leave, then the social net has to be absorbed by the remaining residents and you can force them to leave,” Sternlicht said.
Sternlicht also criticized former Vice President and presidential candidate Joe Biden’s tax increase plan.
“The Biden tax plan, which I’m happy to pay more taxes, but I don’t think this increase in the capital gains rate is a good idea for investment in our country, which we need to do,” he said.
If Biden’s plan were put in place “you’re talking 60 percent plus taxes on the wealthy in New York City, and they will leave,” Sternlicht said.
Sternlicht, whose headquarters is in Miami, said people are flocking to Florida.
“I’ve become a real estate broker for Miami,” Sternlicht said. “I keep sending friends down and showing them houses they can buy, and they’re buying.”
“This is one of the greatest moves to the suburbs from urban areas since the 1950s or the ’60s,” “Shark Tank” investor Robert Herjavec said last month on CNBC. “I recently moved out of Los Angeles into a suburban area, and I can tell you on a very personal level, my area is on fire.”
“Some people note that major metropolitan areas in the U.S. had already been seeing their growth slow prior to this year and, they say, trends that had already been underway before the outbreak may have only been accelerated,” CNBC reported.
“What the pandemic has done is taken family formulation moves that might have been made over the next one, two, three, four, five years and compressed them into one, two, three months,” Richard Florida, a University of Toronto professor who studies cities, said last month on CNBC.
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