A recent comprehensive analysis reveals a critical threat facing New York City’s affordable housing sector: rising operating costs—especially insurance premiums—are endangering the survival of nearly 40,000 government-supported apartments. This financial pressure, combined with declining rent collection, is forcing building owners—many of them nonprofit organizations—to make difficult choices that could affect property maintenance and essential social services.
Experts are urgently calling for increased rental assistance, new public funding for repairs, and innovative strategies such as insurance pooling to ease these escalating costs without burdening low-income tenants.
The affordable housing landscape in New York City faces an unprecedented challenge as a new study highlights a sharp increase in operating costs. The in-depth review, covering tens of thousands of publicly funded apartments, found that expenses have risen by an average of about 40% statewide since 2017.
The most significant factor behind this surge is property and liability insurance, which has more than doubled between 2017 and 2024. A senior policy director involved in the analysis described this rapid escalation as a “runaway train” threatening the continued existence of vital low-income housing.
The buildings examined in the report differ from private-sector properties that may offer rent-stabilized units but receive no government subsidies. Still, even those private owners increasingly face the problem of soaring insurance costs—creating a “perfect storm” for building operators.
Alongside rising expenses, the analysis also identified a notable decline in rent collection, which dropped about 4% during the same period—from roughly 95% in 2017 to less than 91% last year. This reduction translates into an average loss of around $75,000 per building, compounding financial strain.
Policy Solutions and Innovation: Easing the Pressure on New York’s Affordable Housing Secto
For organizations managing these properties—many of which are nonprofits that also provide vital social services—the financial pressure is intense. These operators are increasingly forced to make tough decisions, such as postponing planned maintenance or reallocating funds from essential community programs to cover costs. Housing advocates agree: raising rents on struggling low-income tenants is not a viable solution for this sector of the housing market.
Instead, housing experts emphasize the need for strong policy interventions. They urge city and state policymakers to provide greater financial support for property owners and implement measures to curb skyrocketing expenses.
These strategies include expanding existing rent-assistance programs to ensure stable income sources for affordable housing providers and approving additional public funding for necessary renovations and repairs. Such investments could not only improve living conditions but also reduce the risk of costly liability claims that drive insurance premiums higher.
Innovative approaches—such as creating insurance pools among property owners—are also gaining attention. These collaborative efforts aim to give landlords greater leverage in managing insurance costs. In a promising development, the state recently allocated seed funding to support one such project, signaling potential for wider implementation.
Rising Insurance Costs Threaten New York’s Affordable Housing Stability
The gravity of the situation is underscored by the experiences of major housing operators. A leading nonprofit responsible for thousands of affordable units across several New York neighborhoods reported a dramatic rise in insurance expenses.
Liability insurance costs alone jumped from about $3.8 million to $9.5 million in one year, while property insurance rose from $1.1 million to $1.8 million. These sharp increases are forcing the organization to consider reducing building maintenance and possibly cutting essential services to manage its budget.
The mounting financial burden on affordable housing owners has become a focal point in recent policy discussions. Candidates for public office have proposed a range of solutions—from expanding insurance pools to reduce costs without affecting tenants, to calling for more substantial and long-term government subsidies to help build and maintain housing for New York’s lowest-income residents.
The call to action is urgent: without strategic intervention, the city risks deepening its existing crises of housing instability and homelessness, placing even greater strain on its most vulnerable populations.