When building owners and tenant advocates argue about the rent freeze, they tend to talk past each other on one number: insurance costs. The 2026 Rent Guidelines Board Price Index of Operating Costs found that insurance expenses for rent-stabilized buildings increased 10.5% in a single year — the second-fastest-growing expense category after fuel — contributing to an overall 5.3% rise in operating costs that outpaced the national inflation rate of 2.7%. But the single-year number understates how severe the problem has become. Premiums for owners of rent-regulated buildings jumped 150% between 2019 and 2025 while overall building operating costs rose 33% — a rate of insurance inflation nearly five times the broader cost increase.

For owners of market-rate buildings, insurance increases are painful but manageable — they can be partially passed through to tenants at renewal. For owners of rent-stabilized buildings, they cannot. The RGB's annual adjustment — capped at 3% for one-year leases in recent years and frozen at 0% for the year beginning October 1, 2026 — bears no relationship to a 150% increase in insurance costs over six years. The result is a squeeze that has pushed some stabilized building operators to the edge of financial viability and pushed others over it, contributing to the same pattern of financial distress that brought the Pinnacle Group portfolio into bankruptcy and is currently threatening A&E Real Estate's CMBS loan.

What's Actually Driving the Insurance Surge

The causes of NYC's property insurance crisis are structural, not cyclical — which means they won't resolve on their own when the broader economy shifts. Out-of-control insurance costs come from worsening disasters fueled by climate change, increased rates that insurance companies pay to insure themselves, rising inflation, and a shrinking pool of carriers willing to write policies in New York City. Each of those forces is self-reinforcing: as climate risk increases, insurers raise premiums or exit the market; as the pool of available insurers shrinks, those remaining face less competitive pressure to keep prices down; as premiums rise, more landlords struggle to pay them, which creates additional financial stress in the regulated housing stock.

New York City's specific legal environment adds another layer. Brooklyn landlords are opening their 2026 renewal notices to find premiums jumping 20-40% — some buildings paying over $8,000 per unit annually. Some Bedford-Stuyvesant and Crown Heights brownstone owners reported jumps from $4,800 to over $8,200 per unit per year. NYC's legal climate — with plaintiff-friendly courts, high settlement values, and frequent slip-and-fall and construction-accident litigation — makes the city an expensive market for liability insurance regardless of climate factors. Carriers that remain in the market price that litigation exposure into their premiums, and those that can't make the math work exit entirely.

The Federal Reserve's own researchers have documented how far this has gone nationally. The average monthly insurance cost per multifamily unit increased from $39 in 2019 to $68 in 2024 in real terms — an increase of more than 75% nationally. In New York City, where the starting point was already higher and the rate of increase has been faster, the per-unit annual cost at $8,000 or more for some Brooklyn buildings represents a figure that would have been unimaginable to most building owners a decade ago.

The City's Response: A $100 Million Insurance Program

Mayor Mamdani announced a first-of-its-kind city-backed insurance program in April 2026, backed by $100 million in public funds. The program is aimed at lowering property and liability premiums for affordable housing and rent-stabilized buildings, with City Hall projecting it could reduce costs for 20,000 homes by 2027 and 100,000 homes by 2030. The mayor's office noted that insurance costs for this housing stock have more than tripled since 2017 and argued that rising premiums have become a major driver of both building operating costs and the city's own affordable housing spending.

The program will not be an "insurer of last resort" — landlords will have to apply, and buildings will need to meet affordability requirements and have regulatory agreements in place to qualify. The city's Housing Development Corporation is hiring an actuary or consultant to design the program, and the Economic Development Corporation has issued a call for proposals on how to structure and operate it. The program is designed to leverage the city's scale — pooling thousands of buildings into a single insurance structure to achieve pricing that individual building owners cannot negotiate on their own.

Savings of at least 20% on premiums for qualifying buildings can be reinvested into maintenance or used to stabilize rents, directly benefiting tenants and preserving long-term affordability in rent-regulated units. Over time and across the first five years, the city projects $500 to $700 million in capital savings from the investment — a return of five to seven dollars for every public dollar spent on subsidizing the insurance pool.

The political dimension is worth noting. The program was announced in April, during the RGB hearing process and before the rent freeze vote — framed explicitly as a way to support stabilized building owners without raising rents. It represents an acknowledgment that the rent freeze is financially painful for some owners, and that the city has an obligation to address that pain through means other than allowing rent increases. Whether the program delivers on its timeline — 20,000 homes by 2027, 100,000 by 2030 — depends on how quickly the EDC can select an operator and stand up the program's administrative infrastructure.

What Building Owners Can Do Right Now Without Waiting for the City Program

The city's insurance program is promising but is not yet available to apply for. Building owners facing renewal cycles now need practical steps that don't depend on a program that may be 12 to 18 months from full operationalization. Several approaches have demonstrated real results for NYC building owners navigating the current insurance market.

The most effective single step is starting the renewal process earlier than most owners do. The biggest mistake landlords make is waiting until 30 days before renewal — by then, the current carrier has all the leverage. Starting 75 to 90 days out and getting at least three quotes through an independent broker who works the NYC market specifically changes the competitive dynamic entirely. Brokers who specialize in NYC multifamily have relationships with carriers that aren't available through general commercial brokers, and the difference in quoted premiums for the same building can be substantial.

Portfolio bundling is the second most impactful approach for owners with multiple buildings. Owners with three or more buildings have cut their per-unit cost by $600 to $900 annually by moving to a single master policy across all of them, often saving 10 to 18% versus stand-alone policies. Carriers prefer the diversification that a multi-building portfolio provides — it spreads their risk geographically and reduces the impact of any single adverse event on their book of business with that client.

Documentation of building improvements matters more than most owners realize. A new roof, updated electrical panel, backflow preventer, or other capital improvements reduce the carrier's risk profile — but only if submitted with photos and contractor invoices at application. Underwriters don't ask proactively; owners have to present the evidence. Buildings that have made capital improvements in the past five years and haven't reflected those improvements in their insurance applications are likely overpaying relative to their actual risk profile.

Finally, deductible structure is worth reviewing at every renewal. Moving from a $2,500 to a $10,000 deductible can drop premiums 12 to 20% — a trade-off that makes sense for owners who have reserves sufficient to absorb a larger out-of-pocket loss and who want to reduce their annual fixed costs. Owners without adequate reserves should think carefully before raising deductibles, but for those who do have liquidity, the premium reduction can be significant.

At Dover Property Group, insurance cost management is part of how we advise the building owners we work with — both through the renewal process and through the capital improvement documentation that affects how carriers price risk. If you want to understand your building's current insurance exposure, whether you may qualify for the city's forthcoming program, or what steps could reduce your premiums at the next renewal, our team is glad to help.

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Sources: amNewYork — NYC Unveils Insurance Plan for Rent-Stabilized Housing, April 16, 2026 · The City — Mamdani Insurance Fund to Shield Landlords From Rising Costs, April 16, 2026 · The City Reporter — Search Begins for Operator of City-Backed Insurance With $100M in Public Funds, June 26, 2026 · Commercial Observer — NYC Real Estate Owners Want Action on Skyrocketing Insurance Costs, January 2026 · Dory Angel — Why Are Brooklyn Landlords Facing Higher Insurance Costs in Spring 2026? · Public Administration Policy — NYC Housing Insurance Program: Policy Analysis and Impact · Federal Reserve — Rising Property Insurance Costs and Pass-Through to Rents for Apartment Buildings, September 2025 · NYC Mayor's Office — Mamdani Administration Unveils First-of-its-Kind Insurance Program, April 2026

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About the Author
Dover Property Group is a New York City property management firm working with building owners and tenants across all five boroughs. Our team tracks market conditions, compliance requirements, and neighborhood-level trends to help owners protect their assets and tenants navigate one of the most complex rental markets in the country.