‘Not Sustainable’: High Insurance Costs Threaten Affordable Housing
For years, Father Joe’s Villages, a nonprofit homeless services provider and housing developer in Southern California, could reliably count on the insurance premiums for its properties rising up to 10 percent every year.
But this year, the insurance bill hit $4.4 million — quadruple the previous year. And that was on top of a sharp increase in deductibles.
The sudden rate increase was hardly unique. From Rhode Island to Louisiana, and Texas to Washington, developers of affordable housing have been reeling from exponential surges in property insurance premiums.
Calling the situation “very grave,” Jim F. Vargas, the president and chief executive of Father Joe’s Villages, warned that rising insurance costs could “derail not only our plans as a homeless services provider and developer from constructing additional buildings, but it could derail, frankly, the plans for housing in general to be developed in this state.”
As anecdotes about escalating insurance become more commonplace, most of the attention has focused on the owners of single-family homes and condominiums in states that have been pummeled by floods, fires and one climate disaster after another. Homeowners are struggling to keep up with costs. Insurance carriers are hemorrhaging money and no longer writing policies in certain areas.
