Insurance Crisis Hits New York Affordable Housing Market

Insurance Relief In Sight

Under pressure from housing owners, New York lawmakers target soaring property insurance costs, reports Bisnow. Assemblymember Emérita Torres has introduced a legislative package targeting rising insurance costs. It includes a $50M fund to help bridge the gap between landlords’ income and premiums.

If passed, the fund would offer grants of up to $3K per unit—or $2M per project—helping landlords cover steep insurance premiums that have become financially unsustainable.

Bills Go Beyond the Bottom Line

Alongside the grant fund, Torres’ legislative package includes two additional bills that would:

1. Mandate annual public reporting on premiums, nonrenewals, and denials related to affordable housing insurance.
   
2. Establish a state task force comprised of government agencies, insurers, and housing stakeholders to evaluate market trends and propose policy reforms.
   

Affordable housing advocates argue that a lack of public data has hindered efforts to understand and address insurance market failures.

Why Insurance Costs Are Surging

According to a study from the National Equity Fund and Enterprise Community Providers, the average per-unit insurance cost for affordable buildings rose from $712 in 2017 to $1,495 in 2024. That’s a 110% increase, compared to a 40% rise in overall operating costs.

The Bronx has the city’s highest concentration of rent-stabilized housing. It’s also been hit hardest, with per-unit insurance costs reaching $1,806 last year.

With 57% of owners now spending more than they earn in net operating income, many fear further strain if a rent freeze proposed by mayoral frontrunner Zohran Mamdani becomes policy.

Market Retreat & Discrimination Concerns

Insurance companies have not only raised rates but have also exited the NYC market, particularly in the Bronx, leaving landlords with limited and expensive coverage options.

“There were just two or three companies left willing to write policies,” said Susan Camerata, CFO of Wavecrest Management. Discriminatory practices have been reported, with some insurers denying coverage to buildings with voucher tenants. State legislation signed by Gov. Kathy Hochul recently addressed the issue.

Searching For Alternatives

In the absence of swift relief, some landlords have taken matters into their own hands. A coalition formed the Milford Street Association Captive Insurance Co., allowing owners to pool their risks and negotiate better rates. The initiative began with liability coverage but has since expanded to property and excess insurance.

“This poses a real alternative,” said Camerata, noting that actuarial studies showed landlords’ actual risk was lower than what commercial insurers had priced in.

What’s Next

The New York State Legislature reconvenes in January, with the proposed bills expected to be debated then. If passed and signed by the governor, meaningful change could still be a year or more away. In the meantime, landlords and tenants alike are bracing for continued financial uncertainty.

“We’re going to need to see some immediate relief,” said Erin Burns-Maine of the Community Preservation Corp. “We can’t wait a year to fix this.”