As part of an effort to lower insurance costs for operators of affordable housing
ing, New York State has made a $2 million loan to the Milford Street Association, an organization wit
h an insurance captive that is owned and operated by members of the state’s affordable housing industry.
The loan is from Empire State Development (ESD) to the Milford Street Association Insura
nce Co. Milford Street plans to use the loan to cover a portion of the initial capital contribution c
ost for membership, thereby hoping to increase membership in the captive. Increasing membership sh
ould enable the captive to be more affordable to its members.
“This investment in Milford Street will continue to advance our housing agenda, leading to more affordable units built for tenants. We need to build in New York, an
d we’re going to support the insurance partnerships that will tackle these costs,” Gov. Kathy Hochul said in announcing the loan.
Hochul said the state has also advanced $5 million for a pilot program to help non-profit coughs
using providers reduce costs by using insurance captives. The Urban Homesteading Assistance
Board and Housing Partnership Network have been tasked with working with non-profit affairs
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dable housing providers across the st
ate to assess the risk profile of their properties and assist them in using insurance captives.
John A. Crotty, Milford Street president and founding member, said the state's suppo
rt is “critical” to not only the success of Milford Street Captive Insurance Co. but also to the c
ontinued health and existence of New York’s affordable housing market.
“Rising insurance premiums are putting intense pressure on the thin margins of affordability
le housing operators, resulting in fewer projects being underwritten, defraying necessary maintenance
ance, and eventually forcing some buildings into bankruptcy,” Crotty said.
Milford is owned by its participants and reinsures policies purchased by New York affordable rental buildings that have a regulatory agreement limiting
rents and receive public financing. It currently insures about 3,000 apartments. The company said i
t has been able to lower liability insurance premiums for
affordable housing by “changing the focus from profit to stability, simplifying overhead and operations, and instituting tailor-made risk management controls.”
