When the US housing crisis meets the looming insurance crisis, only government intervention will avert catastrophe
Most Americans are aware that with housing costs on the rise, more and more of us are experiencing periods of homelessness. Based on the relative dearth of national coverage, I presume far fewer of us are aware that major insurance companies have begun pulling out of areas identified as being at heightened risk due to climate change, leaving homeowners in the lurch. I wrote about the impact on Florida in July, but it turns out the problem is much larger than a single state, with California also heavily affected.
Over the next few years, it seems likely these two problems – unaffordable housing and unaffordable insurance in at-risk areas – will spiral into a potentially catastrophic cycle. Not only will some Americans be forced to abandon their homes, but the housing in these areas at high risk of damage from storms or wildfires will likely stand empty (as long as homes continue to stand at all), all of which will further drive demand up in a housing market that already prices out far too many people.Continue reading