Governor Hochul Announces $2 Million Loan to Combat Rising Insurance Costs for Affordable Housing

Governor Kathy Hochul today announced a $2 million loan to Milford Street, an insurance collective created, owned and operated by members of New York's affordable housing industry to combat rising liability insurance premiums. A captive is a form of self-insurance that can lower premiums, and Empire State Development's (ESD) investment will help ensure the sustainability of this innovative approach to tackling New York's affordable housing insurance costs.

"New York is the best state to raise a family, and through my Let Them Build initiative, we're building more homes faster so that new and current families can have long-lasting opportunities here - but we can't stop there," Governor Hochul said. "This investment in Milford Street will continue to advance our housing agenda, leading to more affordable units built for tenants. We need to build in New York, and we're going to support the partnerships that will tackle these insurance costs."

New York City affordable housing liability insurance premiums increased at an annual rate of 21 percent between 2019 and 2023, per a March 2024 report by the New York Housing Conference. These rising costs discourage the development of new affordable housing, place pressure on affordable rents and carrying charges, and force current operators to defer necessary maintenance, adversely impacting housing quality.

Governor Hochul is committed to addressing high insurance costs, and the investment in Milford Street Captive Insurance complements other efforts to tackle increasing housing insurance premiums. In February, New York State Homes and Community Renewal (HCR) announced the administrators for its $5 million Risk Reduction and Insurance Affordability pilot program, the first program in the nation to help non-profit housing providers reduce costs by using insurance captives. The program was created as part of the Governor's FY 2026 Enacted Budget in order to assist non-profit affordable housing providers, giving them new tools to maintain affordability and keep costs down for tenants. Urban Homesteading Assistance Board and Housing Partnership Network will work directly with non-profit affordable housing providers across the state to assess the risk profile of their properties and assist them in using insurance captives.

Empire State Development President CEO and Commissioner Hope Knight said, "Bold ideas and innovative thinking are required to overcome the current affordability crisis. The partnership with Milford Street Captive Insurance Company reflects ESD's commitment to working with the broader housing community on solution-oriented strategies that advance Governor Hochul's ambitious housing agenda."

New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas said, "New York's $2 million investment in the Milford Street insurance collective demonstrates Governor Hochul's focus on driving down costs and reinvesting those savings where they matter most - in maintaining high-quality homes for the people who live in them. Building on HCR's Risk Reduction and Insurance Affordability pilot program, this initiative gives affordable housing owners and developers a powerful tool to stabilize expenses, protect their properties, and ultimately create better, more affordable places for tenants to live. This is one of the many ways that Governor Hochul's commitment to affordability is empowering our partners and creating the opportunities New Yorkers deserve."

Milford Street Founding Member and Work Force Housing Group Member John A. Crotty said, "The Governor's support is critical to not only the success of Milford Street Captive Insurance Company, but to the continued health and existence of New York's Affordable Housing Market. Rising insurance premiums are putting intense pressure on the thin margins of affordable housing operators, resulting in fewer projects being underwritten, defraying necessary maintenance and eventually forcing some buildings into bankruptcy. I commend Governor Hochul for recognizing the need for innovative solutions to the national affordable housing insurance crisis and boldly acting. Her leadership is critical for New York and the nation."

Assemblymember Linda B. Rosenthal said, "Affordable housing operators are struggling under the weight of rising insurance costs, forcing them to delay much-needed maintenance and lowering the quality of housing for residents. Fortunately, some of our affordable housing providers have established an insurance collective to address the issue that the industry created. Preserving access to affordable housing is key to keeping New Yorkers in their communities and I am hopeful that the State's $2 million loan will begin to provide some relief to our affordable housing providers. Tenants around the state need protection against the rising cost of living and addressing the soaring cost of affordable housing insurance will help in achieving that goal."

Assemblymember Clyde Vanel said, "I am proud to support Governor Hochul's initiative to help New Yorkers with affordable housing insurance. This $2 million investment from Empire State Development will set the precedent that New Yorkers can have a future that is both affordable and prosperous. We must continue to actively work and create avenues of financial equity for all of New York State."

The low-interest $2 million loan from ESD, which was approved by ESD's Board of Directors last year, will increase participation in the Captive by using the loan funding to cover a portion of the initial capital contribution membership costs. Increasing membership is essential to the long-term success of the Captive, and ESD's loan enables the Captive to be more affordable to its members.

About Milford Street

Milford is owned by its participants and reinsures policies purchased by New York affordable rental buildings that have a regulatory agreement limiting rents and receive public financing. By changing the focus from profit to stability, simplifying overhead and operations and instituting tailor-made risk management controls, Milford significantly lowered liability insurance premiums for affordable housing development in New York. Milford Street is domiciled in Vermont and is regulated by the Insurance Division of the Vermont Department of Financial Regulation.

Governor Hochul's Housing Agenda

Governor Hochul is dedicated to addressing New York's housing crisis and making the State more affordable and livable for all New Yorkers. Since FY23, the Governor has worked to increase housing supply to make housing more affordable by launching a $25 billion five-year comprehensive Housing Plan, enacting the most significant housing deal in decades and implementing new protections for renters and homeowners.

Building on her ambitious housing agenda, the Governor proposed her Let Them Build agenda - a series of landmark reforms to speed up housing and infrastructure development and lower costs - during her 2026 State of the State. This initiative will spur a series of common-sense reforms to New York's State Environmental Quality Review Act (SEQRA) and executive actions to expedite critical categories of projects that have been consistently found to not have significant environmental impacts, but for too long have been caught up in red tape and subject to lengthy delays.

The FY27 Executive Budget completes the Governor's current five-year Housing Plan to create or preserve 100,000 affordable homes statewide, including 10,000 with supportive services for vulnerable populations plus the electrification of 50,000 homes. More than 81,000 affordable homes have been created or preserved to date.

In addition to the Housing Plan, under Governor Hochul's leadership, HCR has also created new programs that jumpstart development of affordable and mixed-income homes - for both renters and homebuyers. These include the Pro-Housing Communities Program, which allows certified localities exclusive access to up to $750 million in discretionary State funding. More than 410 communities throughout the state have been certified Pro-Housing.