Mayor Zahran Mamdani announced Thursday that he wants to use taxpayer money to lower insurance costs for some Big Apple property owners in a move to try to calm tensions with local building owners.
City Hall plans to roll out a program for owners of buildings containing affordable, rent-stabilized apartments — but it had no details surrounding the plan except that it would initially include 20,000 homes by 2027.
Mamdani has had a somewhat confrontational relationship with landlords in his first months in office, pushing rent freezes on rent control units — but he acknowledged Thursday that landlords are also being crushed by rising costs.
“This is one of the best reliable long-term solutions to lower insurance premiums by offering a city-supported program that can operate with lower overhead and access to cheaper credit,” Mamdani said during a speech at a luncheon held by the Citizens Housing and Planning Council.
“We will flatten the market,” Hizzoner added, as the city council confirmed that the price of insurance had tripled since 2017.
The initiative will be managed by a private operator, but the city will have a stake in the program and oversight as it competes with other insurers in the market.
Officials said the city would tap tax dollars to back the insurance plan in an initial investment as a guarantor, though the Mamdani administration claimed the program would ultimately be self-sustaining.
City Hall did not disclose how much money could be allocated to the program or how the first 20,000 homes would be selected under city policy. The city council said up to 100,000 homes could use city-backed policies by 2030.
But the Democratic Socialist insisted the plan could save the city $500 million to $700 million in capital money over the next five years.
Leila Bozong, Deputy Mayor for Housing and Planning, He told selected media During a Wednesday briefing — which the Washington Post took exception to — is that when owners of affordable housing have to pay more in insurance premiums, the city has to spend more on subsidies to help support new development.
For every $100 increase in landlord insurance premiums, the city must pay an additional $1,200 in capital for new affordable housing, the City Council said.
Bozorg claimed that insurance costs could decrease by 20-30%.
“The high insurance cost puts affordable and rent-stabilized housing at risk and threatens to derail our efforts to build an affordable city,” Bozong said in a statement.
City officials are expected this week to begin the process of finding a consultant to help design the program, and then the city’s Economic Development Corporation will seek proposals from private entities on how best to run the program.
Landlords have faced a lot of scorn from Mamdani, who recently held a series of “Rental Ripoff” hearings that allowed renters to vent their anger against their landlords.
Landlords also claimed that the rent freeze Mamdani wants on rent-stabilized units would be difficult to handle because they still face rising costs.