New York City Mayor Zohran Mamdani is set to announce a plan Thursday to cut insurance costs for owners of affordable and rent-stabilized housing, targeting one of the most punishing 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 expenses and the cost of financing new development.
The latest Price Index of Operating Costs underscores the trend. Operating costs for stabilized buildings rose 5.3% over the last year, while insurance alone climbed 10.5%, accounting for 9.5% of the index—and landing after an 18.7% jump the year before.
It also reflects a broader crisis rippling across the country—between 2020 and 2023, home insurance costs increased by 33%, and as a result, as many 1 in 7 homeowners do not have insurance today.
Speaking during a press briefing Wednesday night, Deputy Mayor for Housing Leila Bozorg said the city believes a new city-backed insurance product could re-level the playing field and bring premiums down by 20% to 30%.
“Our goals are to be able to reduce premiums and stabilize finances for the buildings and for the affordable housing stock,” Bozorg said.
The administration argues those savings could help owners preserve existing housing units while making it easier to finance new affordable housing projects—a core campaign promise from the mayor.
It could also be welcome news to owners of affordable and rent-stabilized housing, many of whom have been sounding the alarm that rising costs, diminishing 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 an address to the Citizens Housing & Planning Council on Thursday afternoon.
The plan
Mamdani’s proposal would leverage the city’s balance sheet to offer specialized policies for affordable and rent-stabilized buildings, with a goal of reaching about 100,000 homes by 2030. Bozorg said the program is intended to provide robust property and liability coverage, in line with what city- and state-financed affordable housing projects already require.
When asked about the specific mechanism that would bring premiums down, Bozorg said the city-backed program would have access to cheaper capital and would not carry the same overhead and profit expectations as commercial insurers.
Plus, the city is already carrying some of the costs of higher premiums, she argued.
Insurance coverage is baked into loan underwriting for any new housing project, so higher premiums make new deals more expensive to finance. Officials said that for every $100 increase in premiums, developers need roughly $1,200 more in city capital to make the project pencil out.
That dynamic is central to the administration’s case for stepping in. Officials have not yet said how much the city will need to invest upfront, with Bozorg saying the final amount will depend on the program’s design and budgeting process.
Even so, she said the city expects the effort to save $500 million to $700 million over time by easing the burden that has driven up subsidy needs.
She also stressed that the program will not function as an insurer of last resort—the backstop coverage many states offer homeowners who can’t find it in the private market.
These programs have faced growing scrutiny in recent years as enrollment has surged and financial pressures have mounted. In California, the FAIR Plan has drawn particular criticism over its handling of smoke-damage claims after the Los Angeles wildfires.
The rollout is expected to happen in phases, beginning this week. If the timeline holds, officials say coverage would begin reaching about 20,000 homes in 2027 and expand to 100,000 by 2030.
How it fits in to Mamdani’s housing agenda
The proposal lands in a debate that has often been flattened into a simple tenant-versus-landlord fight, even as the financial reality of regulated housing is more complicated.
Speaking to Realtor.com® in March after the release of the 2026 Income and Expense Study, Ann Korchak, 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 factor in mortgage debt, costly apartment improvements, and major capital expenses, such as new roofs and boilers, electrical and plumbing upgrades, and facade repairs, that are a constant in older rent-stabilized buildings,” she said.
Realtor.com senior economist Joel Berner struck a similar note: “Major capital expenditures for one-time projects like a new roof are not included in NOI [net operating income]. Even though on an NOI basis it can look like a landlord is doing well, if they are neglecting important improvements to a building, they can quickly become insolvent.”
Those pressures are said to have contributed to nearly 50,000 “ghost apartments”—rent-stabilized units sitting vacant because the cost of rehabilitation far exceeds 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 viewed his rent-freeze pledge as a financial threat, while still advancing the tenant relief that sits at the core of his platform.
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