NYC Mayor Eyes Insurance Program for Affordable Housing

New York City Mayor Zohran Kwame Mamdani is seeking to lower the cost of property and liability insurance for landlords of affordable and rent-stabilized housing through a new city-backed insurance program.

Mamdani plans to hire independent actuarial experts to design and launch the insurance program. By 2027, the city hopes to lower the cost of insurance coverage for 20,000 homes and, by 2030, for as many as 100,000 homes.

According to the city, the cost of insurance has hit affordable and rent-stabilized housing particularly hard. The city believes the new proposal will also drive down city spending in its affordable housing programs.

“We cannot take on the housing crisis without confronting one of the fastest-growing costs facing New Yorkers: insurance. That’s why we’re creating the first city-backed insurance program–to help New Yorkers stay in their homes, give building owners the support they need to make repairs, and build a city that New Yorkers can actually afford,” said Mayor Mamdani.

Leila Bozorg, deputy mayor for Housing and Planning, said the cost of insurance is putting affordable, rent-stabilized housing at risk. This idea is to “use the city’s purchasing power” to lower insurance premiums, helping the city’s own investments in affordable housing go farther and reducing operating costs for owners of rent stabilized housing.

According to the Association for Neighborhood and Housing Development (ANHD), rising insurance premiums have become one of the most destabilizing forces facing nonprofits that have to operate affordable buildings on thin margins. The group told state lawmakers last year that insurance costs have more than doubled in just four years, from roughly $869 to $1,770 per unit. For portfolios where most units rent below $1,000 per month, these increases now consume as much as a quarter of total rent revenue.

Fairview Housing Partners, a New York City-based non-profit affordable housing owner, told lawmakers that the rise in premiums has been the most significant increase in the cost of operating affordable rental housing.

“High insurance costs also severely constrain our ability to develop and finance new affordable housing at a time when there is a desperate need to add to the nation’s housing supply. Although the property markets have shown some improvement over the past year, it is still challenging to place insurance policies at rates that affordable developments can support,” the group testified.

An interagency working group comprised of the New York City Economic Development Corporation (NYCEDC), Housing Development Corporation (NYCHDC), and Housing Preservation and Development (HPD) will manage the selection and partnership of the insurance program.