Leaders in affordable housing operators and government officials in New York have formed the Vermont-domiciled Milford Street Association Captive Insurance Company to help reduce premium spend.
Milford will be owned by its premium payers and will provide insurance only to New York affordable rental buildings that have a regulatory agreement limiting rents and receive public financing.
Premiums have been increasing at an annual rate of 21% over the last five years, according to the New York Housing Conference March 2024 report.
Milford said rising insurance costs are restricting the development of new affordable housing and forcing current operators to defer necessary maintenance to remain operational.
This is adversely impacting housing quality and threatening the economic viability of the market.
“Rising insurance costs are an insidious threat to New York City’s affordability housing stock at a time when we need to solve the city’s affordable housing crisis,” said New York City comptroller, Brad Lander.
“Exponential increases in insurance premiums are driving up operating costs for existing affordable housing and limiting the production of new units.
“The creation of a self-funded insurance collective for the affordable housing industry is exactly the type of innovative and creative solution we need to ensure New York City remains a place where middle- and working-class people can afford to live.”
Milford Street was licensed by Vermont in December 2023 and the captive is managed by Avid Solutions Insurance Management.