New York City has taken the next steps toward realizing its vision of a city-backed insurance program for affordable housing providers.
The city has selected Pinnacle Actuarial Resources to provide actuarial analysis and technical support.
Also, the city has issued a Request for Expression of Interest (RFEI) to the private sector seeking
proposals to design, structure and operate an insurance program capable of reducing premium
s by at least 20% for a meaningful share of the city’s affordable and rent-stabilized housing stock.
Mayor Zohran Kwame Mamdani announced his intentionto create the insurance program i
n April as part of a broad affordable housing agenda. He has promised the city will invest $1
00 million in the program with a goal of insuring 20,000 homes next year and 100,000 homes by 2030.
In addition to lowering insurance costs for providers of affordable and rent-stabilized housing, the city believes the proposed entity will also drive down its sp
ending in its affordable housing programs because every $100 increase in insurance costs requires $1,200 more in city capital in new transactions.
New York City affordable housing liability insurance premiums increased at an annual rate of 21% between 2019 and 2023, according to a March 2
024 report by the New York Housing Conference (NYHC). The NYHC report said rising costs discourage the development of new affordable housing, place pres
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sure on affordable rents and carrying charges, and force current operators to defer necessary maintenance, adversely impacting housing quality
Through the RFEI, the city hopes to attract submissions from a range of industry participants, in
cluding insurance brokers, captive managers, insurance carriers and reinsurers, third-party a
dministrators, actuarial and risk advisory firms and other entities capable of operating at this scale. T
he city also welcomes joint ventures and proposals that leverage existing vehicles or facilities.
