- Affordable housing insurance costs in New York have more than doubled since 2017.
- Governor Hochul’s budget proposes measures to boost insurance transparency and require explanations for premium hikes.
- Industry groups say proposed reforms fall short and push for a state-administered reinsurance trust.
- Insurers’ reluctance to cover real estate contributes to ongoing premium increases for affordable housing.
Budget Negotiations Intensify
Bisnow reports that New York affordable housing owners face rapidly rising insurance premiums. These pressures come as lawmakers approach a key deadline for 2025 budget talks. Governor Kathy Hochul has introduced proposals to address these escalating costs. Officials now view rising insurance expenses as a serious threat to the sector’s financial stability.
These measures include increasing transparency, informing policyholders about premium hikes, and requiring insurers to justify any increases over 10%. But owner-operators and advocacy groups say current plans do not go far enough, pushing lawmakers to prioritize more meaningful reforms.
Painful Premium Spikes
Insurance costs for affordable housing landlords have climbed 110% from 2017 to 2024, according to recent studies by the National Equity Fund and Enterprise Community Partners. Nearly a third of providers saw premium jumps of at least 25% in a single year. The price surge is largely attributed to higher reinsurance costs and limited insurer participation in New York real estate. This pressure mirrors broader financial strain across commercial real estate, where rising borrowing costs have also complicated refinancing efforts.
Industry leaders argue the lack of transparency from insurers has left owners unable to properly challenge or understand the increases. Proposed requirements for insurers to spell out the drivers behind premium changes could be an important first step if enacted.
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Policy Proposals and Industry Demands
Governor Hochul’s proposed budget would require insurers to provide detailed reports and explain premium increases. However, lawmakers have not included key measures across all chambers. These include risk-mitigation discounts for properties with upgraded safety features. Meanwhile, housing advocates argue the proposals do not go far enough. They support additional solutions, including liability law reforms and discounts for common safety upgrades. They believe these steps would deliver more immediate relief.
A coalition of groups, including NYSAFAH, NYHC, Enterprise, and others, is also advocating for a state-controlled reinsurance trust. Such a trust would distribute catastrophe risk between the state, insurers, and owners, with the aim of attracting insurers back to the market and stabilizing premiums for affordable housing.
What’s Next
As budget negotiations continue past previous deadlines, affordable housing advocates are determined to keep insurance reform at the top of the legislative agenda. While some progress appears likely, the sector’s leaders stress the need for bolder action to address what they call a growing crisis threatening New York’s affordable housing stock. The fate of key insurance measures will be decided as the legislature finalizes the state budget in the coming weeks.
