Developers and owners who flocked to the Somos conference in Puerto Rico are optimistic that this will be the year they can get lawmakers to deliver some relief for skyrocketing insurance costs.
Liability claims related to “slip and fall” cases have reached a fever pitch in New York, impacting not only building owners but also the city itself, with the Mamdani administration recently filing a RICO action against personal injury firm Asher & Associates, alleging phony claims that cost taxpayers millions.
Affordable housing is in a cost conundrum, with all rent-stabilized apartment rents frozen for the next two years amid rising utility, labor and insurance costs. The Mamdani administration has offered one path to potentially alleviate the financial situation affordable owners are facing with a city-backed insurance option set to roll out next year. Add Albany lawmakers to the list and there’s rare alignment on one reality: property and liability insurance costs are out of control.
Political will to reform insurance gives the industry a window to push back on runaway liability payouts, which disproportionately impact affordable housing at a rate of approximately three times more than market-rate housing, according to John Crotty, founder of Milford Street Insurance Captive and a founding member of the development firm Workforce Housing Group.
“Yes, this is the time, it’s coming. What does that form look like, who’s every player on which piece? I don’t fucking know,” Crotty said. “ Mamdani’s already in, he said yes already, he wants reform. That’s why he brought the RICO.”
Crotty is confident that will be the year that the state legislature in Albany or City Hall takes concrete steps to address the mounting insurance costs impacting multifamily and small homeowners.
“I have been talking to as many folks down here as I can,” Riseboro CEO Kieran Harrington said of a liability reform bill he brought to shop around to lawmakers congregating at the Caribe Hilton, which seeks to raise the bar for bringing injury claims against owners across the state. “Why not intervene in this way, or be the one that provides the insurance?”
The new dynamics in Albany after voters handed Hochul a resounding victory and secured a Democratic supermajority mean a bill like Harrington’s has legs to pass at the state level.
“There’s a real mode of change that’s come over the country and it’s been evident all over; what they’re saying is that the status quo isn’t working,” Crotty said. “Affordable housing, as you know, is going away right now without intervention.”
A city-backed property and liability insurance option for rent-stabilized and affordable housing aims to cover 20,000 units in 2027, offering 20 to 30 percent lower premiums amid a historic rent freeze that has owners seeking a release valve amid rising costs across the board.
Amy Stokes, principal at Kalel Companies, is eager to see what the city’s insurance option can do to help her manage and grow a portfolio of affordable housing across the five boroughs. The administration gathered her with other affordable and market-rate owners to gauge their priorities and top pain points, she said.
“We feel like we go every year to lobby the state and City Council members to get it done, but I do think that now there is momentum because we are really at a tipping point,” NYSAFAH President and CEO Carlina Rivera said. “Prices have reached an all-time high so we have to look at costs, and insurance is top of the list. And that’s why this conversation is so timely.”
State Sen. Jamaal Bailey, who chairs the chamber’s insurance committee, agrees that Albany is primed for reform in this particular area to provide some relief around insurance.
“We want people to continue to build, we want people to stay and not leave New York City. That’s going to mean having public-private partnerships, discussions about housing matters related to liability insurance and the property casualty conversation.” Bailey said. “I’m excited to work with all the new members of our conference … to see what the new session presents.”
Read more
NY Dirt: Is third-party litigation financing affecting New York insurance?
NY Dirt: Everyone’s talking about insurance
Mamdani announces city-backed insurance option as rent freeze looms
