Climate-Driven Insurance Hikes are Making Affordable Housing Even Harder to Build
Climate change is driving up insurance costs for real estate, especially in the coastal Southeast where hurricanes are a threat. Some developers in North Carolina are facing premium increases of up to 70%, as reported by WHQR.
Federal regulations cap rent increases, making it difficult for many to cover the rising costs of insurance and putting future building projects at risk. Nationwide, developers are seeing similar challenges, with wildfires and storms affecting premiums.
According to WHQR, rising insurance rates on low-income apartments aren’t just a problem in hurricane-prone areas like the Southeast.
Chip Stuart is the national real estate practice leader for HUB International, an insurance brokerage. He said wildfire is as much a problem as tropical storms in parts of the US.
“Mother Nature’s gonna blow right through,” he said. “We’re building in her way at the same time as the [weather] patterns have changed. And some areas are getting hotter, and some areas are getting windier. And that has started really an epidemic of wildfire.”
Stuart said that the insurance problem is hitting coastal regions from California to Texas to Florida, and that’s giving developers pause.
