Investment boss says he's pulling back on spending cash in deep blue city because of its woke mayor and her policies
A high-level investment executive said he's pumping the brakes on spending in Boston because of the Democratic city's mayor and her policies.
Jeff Kanne, the president and chief executive officer of National Real Estate Advisors, said he's wary of pumping more money into the Massachusetts city because Mayor Michelle Wu is pushing for statewide rent control.
Kanne, who runs the colossal investment management company that controls about $10 billion in assets to approximately 120 institutional clients across the country, said implementing rent control would be fatal for housing development.
'If you want to kill housing production, put rent control in place,' he told The Boston Globe, adding 'and you’ll lose investors like me who will go somewhere else.'
Kanne told the outlet it might be a different story if he had no choice but to live or work in Boston.
'If I live in Boston and that’s where my business is, well, I have to cope with that. But I don’t, and my capital can go anywhere in the United States,' he explained.
His decision comes after Kanne invested in projects near the Greater Boston area for nearly 20 years, carefully selecting investment opportunities based on financial return and their impact to create jobs and positively boost the community.
'If the officials in Boston want investors like us to say, "Hey, I can’t wait to get to Boston," they need to roll out the red carpet and say, "Hey, come here. This is what we’re going to do for you",' the real estate boss said.
With rent control on the ballot in November, Jeff Kanne, the president and chief executive officer of National Real Estate Advisors, said he wants nothing to do with Boston, Massachusetts
Kanne (pictured), whose company controls about $10 billion in assets to approximately 120 institutional clients across the country, is looking elsewhere to invest
Wu has pledged to vote in favor of rent control after entering her second term
'Because, unlike the common perception of real estate development, there’s as many people who lose money ... as there are who make money. It’s risky,' Kanne added.
Rent control, which is popular among Democratic-run and urban cities, is on the November ballot in Boston, and is something Wu has pledged to vote in favor of in her second term.
It is a government regulation that limits the amount landlords can charge tenants for rent and also control how much its increased over time.
But if investors like Kanne were to expand capital into Boston, it would leave real estate developers who depend on capital with nothing to build their projects.
Wu isn't the only liberal mayor who has made Kanne rethink his investments, as he feels the same way about New York City Mayor Zohran Mamdani.
Throughout his campaign trail, Mamdani, who entered office in January, has promised New Yorkers he would work on freezing rents in one of the most expensive cities in the US.
Before Mamdani was elected, Kanne said he was looking at an investment in Manhattan.
'We liked it a lot,' he said before adding that his firm 'decided we needed to wait ... we just don’t know what’s going to happen.'
Kanne said New York City Mayor Zohran Mamdani's rent freeze promise has also led him to pull out of investments in the Big Apple
Instead of New York City and Boston, Kanne (far right) has set his sights elsewhere to other major cities like Atlanta, Washington D.C., and even the Bay Area
Kanne said other restrictions, including affordable housing and energy efficiency standards, also impacts investor's decisions to go forward with projects in cities like Boston.
He said: 'I’m not suggesting that none of those things are good, but what I can say is without a doubt, the fewer restrictions you have, the more likely it is that a project is going to pencil, and the more likely it is that capital providers like me will choose your city to put their money because there’s a lot less risk.'
Meanwhile, Boston's local government sees restrictions like these as a good way to protect the environment and better the community.
City Hall has suggested that the issue isn't the mayor, but global market conditions.
Brittany Comak, a spokesperson for Wu, told the Globe the city is always trying to help find ways to get projects off the ground and completed.
'We are in constant conversations with developers trying to identify ways that the City can be a helpful partner in getting projects into the ground,' Comak said.
'Sometimes the City is able to help developers close the gap, other times the level of support they would require would not justify expending so many taxpayer dollars on a market rate private project.'
Kanne said the surge in real estate development in San Francisco is due to the city's new mayor, Daniel Lurie (pictured)
Instead of New York City and Boston, Kanne has set his sights elsewhere on other major cities like Atlanta, Washington D.C., and even the Bay Area.
Despite falling into a real estate depression following the Covid-19 pandemic, San Francisco has been seeing a new surge in interest thanks to artificial intelligence.
Kanne said the area has also benefited from the California city's new mayor, Daniel Lurie.
According to the investor, Lurie, who took office last year, 'put out the welcoming mat to businesses and capital.'
He used to think the same of Boston when the city was run by former mayors Rom Menino and Marty Walsh.
The Daily Mail contacted Kanne, Wu, and Mamdani's office for comment.
