Mamdani Announces City-Backed Multifamily Insurance Offering
The initiative aims to provide coverage for 100,000 affordable and rent-stabilized units by 2030.
New York City Mayor Zohran Mamdani has announced a new initiative to ease the burden of rising insurance costs for affordable housing and rent-stabilized properties in the city. A city-backed program will collaborate with a private insurer, aiming to provide property and liability insurance for 20,000 units by 2027 and 100,000 units by 2030.
The program, which is slated to launch next year, will be managed by a working group of members from the New York City Economic Development Corporation, Housing Development Corporation and Housing Preservation and Development. The task force will manage the selection of a private sector partner for the initiative.
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According to local news outlet The City, landlords would have to apply to the program and meet certain eligibility criteria. Leila Bozord, the city’s deputy mayor for housing and planning, told the outlet that the offering would not be an “insurer of last resort,” and she expects qualified operators to save 20 to 30 percent on their insurance costs through the program.
The program is designed to be self-sustaining over time, as it will reduce city spending per home in its affordable housing programs. For every $100 increase in insurance costs, the mayor’s office noted in a statement, capital costs owed by the city for a new development increase by $1,200.
An industry-wide struggle
The multifamily industry today faces significantly higher insurance costs than five or 10 years ago, though the rate of increases has begun to slow. Affordable housing providers, which already face tight margins, have seen costs rise between 50 percent and 500 percent over the last two years.
Marc Kotler, president of FirstService Residential New York, told Multi-Housing News that he welcomes the mayor’s announcement, as property managers in the city have been facing rising costs and fewer insurance options.
“The cost of claims is very high in a high-rise environment in a city as dense as NYC,” Kotler said. “A toilet overflow can cost from a few thousand to hundreds of thousands of dollars in damages. With the reduction in the number of carriers, there seems to be less competition.”
Owners and operators have increasingly been turning to new methods of reducing their risk in hopes of lowering premiums and deductibles, Kotler noted. Technology offerings that help with preventing major losses, like leak detection software and infrared scanners, can often lead to more favorable insurance rates.
