Facing soaring insurance rates and fewer and fewer coverage options, a group of affordable housing owners are starting their own insurance collective in an attempt to save tens of millions of dollars across roughly 80,000 New York City apartments.
Major insurers have fled the city’s housing market in recent years, with the firms that remain raising costs by significant amounts. Landlords say the higher premiums are eating a bigger chunk of their budgets and forcing them to forgo building maintenance or repairs, leading to worsening conditions for tenants. A report published last year by the state Department of Financial Services, or DFS, and New York’s Division of Homes and Community Renewal showed that insurance premiums for rent-regulated housing rose by an average of 43% from 2019 and 2021.
The firms starting the collective include Wavecrest Management — which controls more than 30,000 apartments throughout the five boroughs, most of them rent-stabilized — and Workforce Housing Group, an affordable housing developer with about 2,000 units, mostly in the Bronx. The companies say they will reinvest the insurance savings back into their buildings.
The years-long effort was led by the late Richard Ravitch, a former lieutenant governor and real estate developer who helped organize the various property owners involved in the new association, known as a “captive” in the insurance world
In an interview in May, a month before his death, Ravitch told Gothamist he wanted to create a new model for insurance since carriers were hiking rates and rejecting coverage for low-income renters or properties located in specific areas of the city, like the Bronx.
“It’s a form of redlining,” Ravitch said. “We’re trying to fix it by creating a whole structure to provide insurance so the owner will have the same protections they had before and won’t pay these crazy premiums they’ve been forced to pay.”
The creation of the collective follows a Gothamist…
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