Rising costs threaten future of NYC’s affordable housing, report finds

The high cost of housing has come to dominate the New York City mayor’s race as voters prepare to cast their early ballots starting Saturday.

Now a new analysis of nearly 40,000 government-funded apartments finds costs are soaring not only for tenants, but for landlords as well driven by a steep increase in insurance premiums. Authors of the study say the solution, at least for this subset of low-income housing, isn’t raising rent on tenants. Instead they suggest curbing the skyrocketing costs with more rental assistance, new city and state funding for repairs and strategies to limit escalating insurance hikes.

Enterprise Community Partners and National Equity Fund, two organizations that finance affordable housing, examined expenses for 428 developments with 37,130 apartments, where rents are capped for low-income New Yorkers and where building owners receive funding from government sources. They found that operating expenses across the statewide portfolio have increased by an average of about 40% since 2017.

Property and liability insurance accounted for the sharpest spike, with the cost more than doubling between 2017 and 2024. Patrick Boyle, Enterprise Community Partners’ senior policy director, likened the increase to “ a runaway train for New York” that threatens the viability of low-income housing.

The buildings included in the report are distinct from privately owned properties that may contain rent-stabilized apartments with relatively low rents but don’t receive government funds. But for owners of those buildings, too, rising insurance costs have become a worsening problem.

The report also found that rent collection declined by about 4% over that span, from nearly 95% in 2017 to less than 91% last year. The decrease meant a loss of about $75,000 for the average building, and created a “perfect storm” of missing revenue and rising expenses, according to the analysis.

Boyle said the costs are straining landlords ’overall operations. Nearly two-thirds of the affordable housing owners included in the analysis are nonprofit organizations, with many also providing social services.

“They have to make tough choices,” Boyle said. “They have to maybe defer maintenance that they had planned. They have to take money from other parts of the organization to make up for some of the costs.”

What should not be on the table, he said, is raising rents on low-income tenants, at least for those in affordable housing. Instead, he’s calling for state and city policymakers to allocate more money for owners and to curb skyrocketing expenses through strategies like landlord collectives to control insurance costs.

“For as much as these buildings are struggling, tenants are still really struggling too,” said Boyle, who conducted the analysis. “We don’t want to exacerbate a housing instability crisis, a homelessness crisis and a cost of living crisis in New York.”

The head of the nonprofit RiseBoro, which operates more than 4,000 units of affordable housing in Brooklyn, Queens and the Bronx, said his organization has been hit particularly hard.

CEO Kieran Harrington said Riseboro spent about $3.8 million on liability insurance to protect them against lawsuits and $1.1 million on property insurance in 2024. This year, he said, those costs jumped to $9.5 million for liability and $1.8 million for property insurance.

Harrington said his agency is now performing less maintenance on its buildings and weighing whether to cut back on services to make up for the ballooning costs.

“It places significant pressure on our operations,” he said.

The report authors recommend New York City and state expand existing rental assistance programs, like the CityFHEPS housing voucher program in the five boroughs and the state’s new, but modest Housing Access Voucher Program, to provide steady income to affordable housing owners on behalf of tenants.

The report authors also call on lawmakers to approve more funding for repairs and renovations, like fixing up broken stairwells and water-damaged ceilings at affordable housing sites. They say doing so would prevent injuries and reduce the risk of lawsuits and claims. Litigation only drives up the cost of liability insurance even further, they said.

And the report urges the state to invest in insurance collectives, like a program established by a group of landlords that pooled cash to insure themselves that was first reported by Gothamist. Gov. Kathy Hochul issued $2 million earlier this year to help prop up the venture.

Hochul and the state’s Department of Financial Services did not immediately respond to a request for comment on the report’s recommendations.

Rising landlord expenses have become a campaign issue in this year’s mayoral election, though the candidates have offered different solutions.

Democratic nominee Zohran Mamdani, an assemblymember from Astoria, has routinely cited the insurance collective, known as Milford Street, as a way to lower rising insurance costs for property owners without raising rents on tenants.

“What could be achieved if the city intervened in a significant way?” he asked in an interview with NY1’s Errol Louis last month.

And Gov. Andrew Cuomo, an independent candidate, has said that the city has to provide owners of affordable housing with “much deeper subsidy for a much longer period of time” to build and maintain apartments for the lowest-income New Yorkers.

Republican nominee Curtis Sliwa has yet to address the problems facing owners of 100% affordable apartment buildings, but he has called on the state to “reverse” tenant protection laws that limit rent hikes on tenants in regulated apartments.