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Wealthy homeowners in flood-prone areas should not get tax dollars to rebuild, says Barry Sternlicht

  • "You could basically argue that people who live in these ... live there at your own risk," the Starwood Capital chief argues.
  • The private insurance market "should be able to work this out," Sternlicht adds.
  • But he stresses he wasn't saying homeowners shouldn't receive humanitarian aid.

Real estate mogul Barry Sternlicht said Wednesday wealthy people who have homes in flood-prone areas of the country probably should not expect tax dollars to help them rebuild.

"You could basically argue that people who live in these ... live there at your own risk," the chairman and CEO of Starwood Capital said on CNBC's "Squawk Box." "The people who live in the mountains of Denver — should they be paying through their tax dollars for relief to people whose homes got wiped out" in hurricanes Irma and Harvey?

Sternlicht stressed he wasn't saying homeowners shouldn't receive humanitarian aid. "[But] the private [insurance] market should be able to work this out," he argued, as opposed to the government's National Flood Insurance Program. Starwood Capital, a global investment firm specializing in real estate, has $55 billion in assets under management.

President Donald Trump signed a bill late Friday providing $15 billion to Hurricane Harvey disaster relief, which incorporated an extension of the federal flood insurance program, the debt ceiling and government funding until Dec. 8.

Many Republicans were upset with Trump's deal with Democrats, which included a much shorter extension to the borrowing authority than they wanted. Some GOP lawmakers had requested the legislation be paid for with cost cuts.

Homeowners who purchased flood insurance through the program can expect some help. But others with flood damage who do not have insurance will have to find help through relief aid and donations.

Clarification: A spokesperson for Sternlicht said he was talking about wealthy individuals with homes in flood-prone areas, not all homeowners.

WATCH: Irma to put private flood insurance to the test

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