Source: Insurance Information Institute, October 2024

Affordable Housing Providers Have Bigger Struggle Absorbing Insurance Cost Surges

Affordable housing providers are struggling more than market-rate multifamily property owners with property insurance cost surges. With ​​nearly half of all homes in the United States at risk of “severe or extreme” damage from events like flooding, high winds, and wildfire, the perfect storm of climate risk and legal system abuse creates obstacles for homeowners. But insurance cost increases for affordable housing providers more acutely threatens a more financially vulnerable segment of the housing market, as increased premiums and waning coverage for affordable housing property owners can put millions of renters at risk of becoming rent-burdened (paying more than 30 percent of gross monthly income in gross monthly rent) or unhoused.

In June of this year, about two dozen real estate, housing, and nonprofit organizations — self-describing as a “broad coalition of housing providers and lenders” —  wrote a letter to Congress and the Biden administration urging them to address the issue of property insurance affordability. Although the coalition declared its intent to represent all stakeholders in the housing market, it called attention to special concerns of affordable housing providers and renters.