Mamdani plans to use taxpayer dough to cut down some NYC landlords’ insurance costs

Mayor Zohran Mamdani announced Thursday he wants to use taxpayer dough to cut insurance costs for some Big Apple landlords in a move to try to cool tensions with local building owners.

City Hall plans to roll out a program for owners of buildings with affordable and rent-stabilized apartments – but was short on 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 as he pushed a rent freeze for rent-control units — but he admitted Thursday landlords are also being crushed by rising costs.

“This is one of the best long term, reliable solutions to lowering premiums by introducing a city-backed program that can operate with less overhead and access cheaper credit,” Mamdani said during a speech at the Citizens Housing and Planning Council Luncheon.

“We will level the market,” Hizzoner added as City Hall stressed the price of insurance has tripled since 2017.

The initiative would be run by a private operator, but the city would have a stake in the program and oversight as it competes with other marketplace insurers.

Government getting into the insurance business is not unheard of.

The federal government decades ago created FAIR, or Fair Access to Insurance Requirements, in which home insurance was doled out by the state, but private businesses assumed the risk and insurance was sold for profit.

FAIR turned into a fiasco in New York as arsons ran rampant in parts of the Bronx during the 1970s, historian Bench Ashford wrote in a 2025 New York Times article.

Landlords could get coverage at a remarkably higher rate than the buildings’ market rate, so the apartments would go up in flames, resulting in bigger paydays for owners than renting out units or selling the property, Ashford wrote.

Florida, a state with high insurance expenses, has a not-for-profit entity that was created by lawmakers in 2002 so property owners have a place to buy insurance when they have nowhere else to turn.

Citizens was the state’s largest insurer until it shed 180,000 policies in Southeast Florida last year, according to data released last month and reported on by Axios.

The Big Apple would need to tap into tax dollars – that need to be approved by the City Council — to back the insurance plan in an initial investment as a guarantor, though the Mamdani administration claimed the program would eventually be self-sustaining.

City Hall did not reveal how much money could be thrown into the program or how the first 20,000 homes under the city policy would be selected. Up to 100,000 homes could use the city-backed policies by 2030, City Hall said.

But the Democratic socialist insisted the plan could save the city between $500 and $700 million in capital funds over the next five years.

Leila Bozong, the deputy mayor for housing and planning, told select news outlets during a briefing Wednesday – which The Post was excluded from – that when landlords of affordable housing fork over more in insurance payments, the city must spend more on subsidies to help shore up new development.

For every $100 increase in insurance premiums for landlords, the city must pay $1,200 more in capital for the new affordable housing, City Hall said.

Bozorg claimed that insurance costs could drop between 20-30%, according to reports. 

“The skyrocketing cost of insurance is putting affordable, rent-stabilized housing at risk and risks setting back our efforts to build a more affordable city,” Bozong said in a statement.

City Council Speaker Julie Menin said at a meeting Thursday that she was looking forward to working with the mayor’s office on the proposal.

“I completely agree that insurance costs are way too high,” she said as she noted pricey plans are stalling more affordable housing units.

City officials are expected this week to begin the process of finding a consultant that will help design the program, and then the city’s Economic Development Corporation will seek proposals from private entities on the best way to run the program.

Property owners have faced plenty of scorn from Mamdani, who held a series of “Rental Ripoff” hearings recently that allowed tenants to sound off against their landlords.

Landlords have also claimed that Mamdani’s desired rent freeze on rent stabilized units would be tough to handle because they continue to face rising costs.