Mamdani is set to unveil a plan to lower insurance costs for New York’s affordable housing

Mayor of New York Zohran Mamdani plans to announce a plan Thursday to lower insurance costs for owners of affordable and rent-stabilized housing, targeting one of the heaviest expenses for the city’s regulated housing stock.

City officials say premiums for this segment of the market have more than tripled since 2018, driving up both operating costs and the cost of financing new developments.

The newest Price index of operating costs underlines the trend. Operating costs for stabilized buildings rose 5.3% last year, while insurance alone rose 10.5%, accounting for 9.5% of the index – landing after an 18.7% increase the year before.

It also reflects a broader crisis spreading across the country: between 2020 and 2023, the cost of home insurance rose 33%, resulting in 1 in 7 homeowners today without insurance.

Speaking at a press conference Wednesday evening, Deputy Mayor of Public Housing Leila Bozorg said the city believes a new city-backed insurance product could level the playing field and reduce premiums by 20% to 30%.

“Our goals are to be able to reduce premiums and stabilize the finances for the buildings and for the affordable housing stock,” said Bozorg.

The administration argues that these savings can help owners preserve existing homes while making it easier to finance new affordable housing projects — a key campaign promise of the mayor.

It could also be welcome news for owners of affordable and rent-stabilized housing, many of whom are sounding the alarm that rising costs, falling profits and the prospect of a rent freeze — another key campaign promise — could make their buildings harder to operate.

Mamdani is expected to formally unveil the plan during a speech to the Citizens Housing & Planning Council on Thursday afternoon.

The plan

Mamdani’s proposal would leverage the city’s balance sheet to provide specialized policies for affordable and rent-stabilized buildings, with the goal of reaching approximately 100,000 housing units by 2030. Bozorg said the program is intended to provide robust property and liability coverage, in line with what city and state-funded affordable housing projects already require.

When asked about the specific mechanism that would reduce premiums, Bozorg said the city-backed program would have access to cheaper capital and would not have the same overhead and profit expectations as commercial insurers.

Moreover, the city already bears some of the costs of higher premiums, she argued.

Insurance coverage is embedded in the lending for every new housing project, so higher premiums make new deals more expensive to finance. Officials said for every $100 increase in incentives, developers will need about $1,200 more in city capital to make the project a reality.

This dynamic is central to the government’s plea to intervene. Officials have not yet said in advance how much the city will have to invest, while Bozorg says the final amount will depend on the program’s design and budgeting process.

Still, she expects the efforts will save the city $500 million to $700 million over time by easing the burdens that have increased grant needs.

She also emphasized that the program will not function as an insurer of last resort — the backstop coverage that many states provide to homeowners who cannot find it in the private market.

These programs have come under increasing criticism in recent years as enrollments have skyrocketed and financial pressures have increased. In California, the FAIR Plan has received particular criticism over its handling of smoke damage claims following the Los Angeles wildfires.

The rollout is expected to take place in phases starting this week. If the timeline holds true, officials say coverage will reach about 20,000 homes in 2027 and expand to 100,000 by 2030.

How it fits into Mamdani’s housing agenda

The proposal enters a debate that has often boiled down to a simple battle between tenant and landlord, even though the financial realities of regulated housing are more complicated.

Speaking to Realtor.com® in March following the release of the 2026 Income and Expenditure Study, Ann Korchak, The president of the Small Property Owners of New York (the majority of whom own stabilized units) warned that the financial reality for landlords was not as rosy as their reported 6.2% profitability seemed.

“It doesn’t take into account mortgage debt, expensive apartment improvements and major capital expenditures, such as new roofs and boilers, electrical and plumbing improvements, and facade repairs, which are a constant in older rent-stabilized buildings,” she said.

Realtor.com senior economist Joel Berner made a similar comment: “Large capital expenditures for one-time projects such as a new roof are not included in NOI [net operating income]. Even though a landlord may appear to be doing well on an NOI basis, if they neglect important improvements to a building they can quickly become insolvent.”

That pressure is said to have contributed to almost 50,000 ‘ghost apartments’ –rent-stabilized units sit vacant because the costs of rehabilitation far exceed the potential return.

And it helps explain why Mamdani’s insurance push matters: If it works as promised, the plan could function as an olive branch to landlords who saw his rent freeze promise as a financial threat, while still advancing the tenant support at the heart of his platform.