The Daily Dirt: Affordable landlords try hand at running insurance venture

Company billed as first captive of its kind in U.S.

<p>A photo illustration of Work Force Housing Group&#8217;s John A. Crotty and Wavecrest Management&#8217;s Susan Camerata (Getty, Work Force Housing Group, Wavecrest Management)</p>

A photo illustration of Work Force Housing Group’s John A. Crotty and Wavecrest Management’s Susan Camerata (Getty, Work Force Housing Group, Wavecrest Management)

Landlords created their own insurance company to combat costs.

Milford Street Association Captive Insurance Company went live this week, billed as the first captive insurance company focused on affordable housing in the U.S. 

Multifamily owners have been hit hard by ballooning insurance costs. A report by the New York Housing Conference in March found the average cost to insure an affordable apartment was $1,770 in 2023, representing a 103 percent jump from four years ago, when the average premium was $869.

“It just became so unpalatable. Where do you get the money to pay for that?” Susan Camerata, CFO of Wavecrest Management, said in an interview. 

“This was formed to give us an alternative and not to just sit back and accept what was happening in the marketplace,” she said. “We couldn’t just sit by and let the insurance market take us over, because it will take us down.”

The newly created company is owned by its premium payers, including Wavecrest and Workforce Housing Group, Gothamist was first to report. Membership is limited to residential rental buildings that have regulatory agreements limiting rents and that receive public financing.   

The collective obviously has its benefits for members (they can better control costs and availability) but its reach is limited. Landlord group Community Housing Improvement Program has called for a state-backed insurance provider, for example, to cover a larger swath of rental buildings. The state budget this year included legislation barring insurance companies from denying coverage to affordable housing providers, but did not offer up its own insurance vehicle. 

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A thing we’ve learned: Ranch-style homes were designed to be modern on the inside, but incorporated more traditional architectural elements on outside often to appease the Federal Housing Administration, which “discouraged a pronounced modern appearance in the homes they helped finance,” according to “A Field Guide to American Homes.” That may explain why you’ll see details like imitation Doric columns holding up nothing but adorning the front facades of these squat homes. 

Elsewhere in New York…

—Mayor Eric Adams on Tuesday dismissed calls from elected officials to extend city lifeguards’ hours after four New Yorkers drowned less than three weeks into the summer, Gothamist reports. The mayor maintained that the issue lies with educating “parents on when is the time to be in the water and when we don’t want people in the water.”

— The mayor will not veto a bill that expands the City Council’s authority over city agency appointments, Politico New York reports. Adams has publicly opposed the measure, but he has already taken steps to delay its implementation: The change requires a change to the City Charter, meaning it must go to voters during a general election. The mayor called a Charter Revision Commission for November, so the City Council’s changes will not be on the ballot until at least November 2025. 

Closing Time

Residential: The priciest residential sale Tuesday was $12.3 million for a 6,151-square-foot co-op unit at 652 Hudson Street in the West Village. Julianne Bond of Sotheby’s International Realty had the listing. 

Commercial: The largest commercial sale of the day was $177 million for a 490,000-square-foot office building at 780 Third Avenue in Turtle Bay. Nuveen Investments sold the 80-unit building to Sovereign Partners.

New to the Market: The highest price for a residential property hitting the market was $25 million for a condominium at 240 Park Avenue South in Flatiron. Alexander Boriskin and Michael Lorber of Douglas Elliman have the listing. — Matthew Elo

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