BILL NUMBER: S7939
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the private housing finance law, in relation to creating
an affordable housing insurance relief fund program; and providing for
the repeal of such provisions upon expiration thereof
 
PURPOSE OR GENERAL IDEA OF BILL:
To create the Affordable Housing Insurance Relief Fund Program, which
will provide financial assistance to affordable housing developers
facing dramatic increases in the cost of commercial insurance coverage,
including property, liability, and umbrella policies. The program will
help stabilize operating costs, preserve affordability, and reduce the
risk of displacement.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1. The private housing finance law is amended by adding a new
article 33 to the Private Housing Finance Law, establishing the "Afford-
able Housing Insurance Relief Fund Program."
Subsection 1302. Affordable housing insurance relief fund program:
Establishes a program, administered by the Housing Trust Fund Corpo-
ration, to provide payments and grants for reasonable and necessary
mortgage insurance expenses for affordable housing developments.
Subsection 1303. Program criteria. Directs the corporation to create
procedures for competitive applications and awards. Prioritizes projects
facing material increases in insurance costs based on documented
evidence, including premium hikes, coverage reductions, or market vola-
tility. Also allows consideration of challenges securing reinsurance or
operating in noncompetitive insurance markets, as demonstrated by broker
documentation.
Subsection 1304. Funding criteria. Sets maximum award levels at three
thousand dollars per income-restricted unit and two million per project,
with eligibility based on a demonstrated disproportionate increase in
insurance costs relative to coverage loss.
Subsection 1305. Funding. Authorizes the corporation to make all funding
and award decisions, subject to appropriations.
Subsection 1306. Annual report. Requires the corporation to submit an
annual report to the Legislature and Governor detailing applications,
awards, and program implementation data.
Subsection 1307. Stakeholder Advisory Group. Establishes a stakeholder
advisory group to provide guidance on program implementation, equity
considerations, and recommendations to support long-term affordability
and sustainability.
Subsection 1308. Disposition upon expiration. Provides for the continued
administration of contracts and obligations entered into prior to the
program's expiration and directs the disposition of unencumbered funds
in accordance with legislative intent.
 
JUSTIFICATION:
Skyrocketing housing insurance costs are threatening the financial
viability of affordable multifamily rental housing in New York. Excess
liability costs in particular have been increasing dramatically over the
past five years, doubling or tripling costs for some owners, even while
those owners have seen no excess liability claims.
As of 2025, the average cost to insure an affordable apartment has
skyrocketed to $1,770 per unit - a 103% increase from just four years
ago when premiums averaged $869 per unit. As rates continue to climb, so
does the financial strain on affordable housing developers, making it
increasingly difficult to afford and maintain their properties. These
increasing costs are being passed onto tenants in the form of rent
increases. Not taking action on skyrocketing insurance rates will put
thousands of tenants in subsidized and affordable housing units at risk
across New York State.
This bill aims to provide financial relief to stabilize the costs to
operate affordable multifamily housing in New York. This support will
help stabilize housing costs, reducing the risk of displacement and
preventing foreclosure for low- and middle-income families.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
The fund shall provide financial assistance in an amount not to exceed
three thousand dollars per income-restricted housing unit, and not to
exceed two million dollars per eligible project annually. A request
shall be made to the governor for an appropriation of fifty million
dollars to establish and administer the fund for the purpose of mitigat-
ing increased insurance costs impacting income-restricted housing devel-
opments.
 
EFFECTIVE DATE:
This act shall take effect on first of January following its enactment
and expire twenty years later. Regulations may be promulgated prior to
the effective date.