A trio of bills just introduced by New York state legislators aims to bring relief to affordable housing landlords, who have seen their insurance costs more than double in the past seven years.
The Bronx has the highest concentration of affordable housing in New York City.
Among the proposals is the creation of a $50M fund to provide grants to bridge the gap between affordable housing landlords’ net operating incomes and their insurance costs.
The two other bills introduced by Assemblymember Emérita Torres, whose district covers the south and southeastern Bronx, would mandate collecting and reporting data on insurance rates and convene a task force to recommend policy solutions.
Torres’ bills were introduced following the publication of a study by nonprofit affordable housing providers National Equity Fund and Enterprise Community Providers that found the cost of insurance per unit for affordable owners jumped from $712 to $1,495 between 2017 and 2024.
New York Housing Conference Executive Director Rachel Fee advised Torres on the bills, calling specifically for the data reporting requirement as a first step.
“That has really been a barrier in us figuring out, as advocates, what should we be asking for, because the public data here is really lacking,” Fee said.
Overall operating costs have shot up by 40% for landlords of affordable housing over the past seven years, according to the study. Staffing costs are up by 51% and maintenance by 35%, but insurance, up by 110% in that time, is the main reason costs have soared out of control.
The same study found that 57% of affordable housing owners are spending more on costs than they are bringing in via net operating income.
The discrepancy could get worse for owners if Zohran Mamdani, the front-runner in next month’s mayoral election, enacts the rent freeze for stabilized units that he has campaigned on.
“In the short term, we are already seeing this distress, and now we are looking down this potential for a four-year revenue freeze,” Community Preservation Corp. Senior Vice President of External Affairs Erin Burns-Maine said. “The rent is too high for the tenants, but it’s also too low for healthy operations in these buildings.”
The bill that creates a fund for landlords will distribute grants worth up to $3K per unit or $2M per project.
Gov. Kathy Hochul’s office declined to comment on the pending bills but said that the governor secured more than $1.5B to expand housing supply and create more affordability for renters and buyers.
The other two bills would require the state’s departments for financial services and for housing and community renewal to provide yearly reports on premiums, nonrenewals and denials for affordable housing insurance.
They would also create a statewide task force led by the same departments, with input from insurers, reinsurers and housing stakeholders, to assess market conditions. The task force would collect and publish data and issue recommendations.
The New York Capitol in Albany
More information is crucial for understanding what factors are driving cost escalations and the relationship between insurance premiums, claims and risk mitigation, Fee said.
“We have some anecdotes and examples, but we don’t have a real pattern that we can see with any public data,” she said.
Discrimination by insurers remains a problem for affordable housing landlords, Torres said at a rally outside City Hall last week announcing the bills.
Many have refused to cover buildings with low-income residents or tenants paying with vouchers as recently as 2023, a Gothamist investigation found. The following year, Hochul proposed and signed legislation forbidding insurers from refusing to provide coverage for affordable housing.
“Insurance companies were declining to cover the properties, not even to quote on them, because they were affordable housing,” said Susan Camerata, chief financial officer at Wavecrest Management, which oversees roughly 35,000 affordable apartments across the city. “I found it quite upsetting.”
Additionally, several insurers have left NYC’s market entirely, Torres said at the rally. The exodus of insurers has left few options for landlords, who need coverage to secure loans to maintain their buildings, and has resulted in unfair market power for the few insurers that remain.
“Even if you can get your existing company to renew, you may not get multiple offers,” Fee said. “It’s not a competitive market.”
The issue is most acute in the Bronx, which has a higher proportion of rent-stabilized housing than the city’s other boroughs, according to a study by the city’s Department of Housing Preservation and Development.
Insurance per unit in the Bronx was $1,806 at the end of last year, compared to $1,700 citywide, according to Enterprise’s study.
“A lot of insurance companies bailed out of the market, especially in the Bronx, where we were down to two or three companies that would write insurance,” said Camerata, whose firm, Wavecrest, operates 14,000 Bronx apartments.
The state legislature won’t be in session again until January. Even if the bills pass and are signed by Hochul, it will be at least a year until the first impacts might be felt.
“We’re going to need to see some immediate relief for owners in this situation and for tenants in these buildings,” Burns-Maine said.
Instead of waiting for a fix, Camerata and a handful of developers created the Milford Street Association Captive Insurance Co., an entity that allows them to band together and negotiate for better rates by combining their portfolios into one policy.
The landlords commissioned an actuarial study and were able to establish that the losses that they were incurring were less than the losses that insurance companies were attributing to the landlords and increasing premiums for.
“In the beginning, it was only able to write liability insurance. But now, they do have products to be able to write property insurance as well as excess,” she said, adding that the captive’s existence has allowed owners to negotiate costs down with insurers.
“I think that it definitely poses an alternative.”