🏡💚 Sharing risk in climate crisis
October 11, 2024
The last few weeks have been a tragic reminder of the devastating power of climate disasters. Hurricane Helene has killed at least 230 people across 6 states, cutting off power for hundreds of thousands of people, and leaving a trail of destruction with homes and communities in ruins. Following in its wake came Hurricane Milton, causing more death and damage to the southeast region this week.
Although we may not get hurricanes in California (not to ignore the ‘mere’ tropical storm Hilary that hit southern California last year), we are certainly no stranger to climate disasters. As these events intensify and become more frequent, they also become more commonplace. Last year had a record-breaking 28 climate disasters, costing an estimated $92.9 billion in damages. And yet, for all the work that climate advocates and scientists do to draw connections to climate change after each of these disasters, they do not seem to spur increased urgency in climate action.
Destruction from Hurricane Helene. Source: NPR
No matter where you live now, you face increased risks from climate change. Yet we also know that some areas are at greater risk than others. This has increasingly led to hard questions about how (and if) we should support people and communities who live in high-risk areas, and how much we spread the risk, and its costs, across all of society.
In California, these questions have many different elements, but perhaps none more pressing than the issue of home insurance. The home insurance industry is meant to do the work of spreading out risk, so that the costs of a disaster aren’t solely borne by the one particular community or family that it happened to strike. In addition to disaster response programs, home insurance is meant to be there to help us recover.
But the insurance industry is failing to keep up with increasing losses. In 2022, U.S. insurers paid out $99 billion in weather-related claims. In response, insurers are raising rates and dropping policies, leaving many people and communities behind. As natural disasters get worse, the costs are passed down to everyone.
Although the home insurance crisis is often framed as primarily impacting homeowners, that doesn’t tell the full story. This is increasingly a housing justice issue, affecting both renters and affordable housing development.
Affordable housing developers are raising alarm at how insurance increases and ongoing unpredictability are stymieing projects, especially those serving the most vulnerable. This includes urban areas in California that face relatively less climate risk. In San Francisco, one affordable housing project reported an insurance increase from $58,000 for their policy in 2022 to $171,000 in 2023 (nearly 300% increase). In Los Angeles, a permanent supportive housing project saw an increase from $94,000 to over $519,000 — a 450% increase.
Beyond building and maintaining affordable housing projects, developers also say that insurance uncertainty prevents investments in green retrofits and decarbonization. In an interview with a researcher at Climate + Community Institute, one developer noted, “most of [our peers] say they can’t even entertain the idea of implementing solar in their projects or any green measures for that matter because they’re waiting on that next insurance renewal.”
In California, all of this is coming to a head as insurance premiums skyrocket and insurers increasingly refuse to cover portions of the state — with some abandoning the state all together. Tens of thousands of people had their insurances plans cancelled or not renewed, leaving many scrambling and eventually finding an unsatisfactory answer in the FAIR program, the state’s insurer of last resort.
So far, the dominant policy response to this crisis has been to loosen rules on private insurers and permit further rate hikes to stabilize private insurance markets. But with a problem that is deeply socialized, private markets might not be the most effective tool to deliver socially beneficial results. This is illustrated by insurers moves to pull out of certain regions — even if people living there can’t get insurance, it’s not like the costs of damages and disasters aren’t still socialized. They are just passed on to other safety nets, such as (woefully inadequate) disaster relief services and other public support. We all bear the cost when communities burn or are swept away.
And to my mind, we should not turn away from that collective, socialized cost. We need to resist the temptation to think, “why should I be responsible for some people living in climate-risky areas?” This is the same logic that leads to a politics of individualism and resentment. Yes — we need to make hard policy choices about where to build new housing and how to support communities that are now increasingly at risk. But climate change is a collective threat, and our fates are intertwined.
We live in a time of heightened risk for everyone. Our only solutions are through collective action and collective responsibility. That includes our response to the problem of home insurance.
I know enough to know I don’t know enough to speak with conviction on exactly what those solutions should be. For a much deeper dive on this, I would point you to a really great series of blog posts from the Climate + Community Institute (CCI), much of which is captured in the recent report they released, Shared Fates: A Housing Resilience Policy Vision for the Home Insurance Crisis. In the report, they propose a solution that would provide public disaster insurance, but also a comprehensive set of work a services related to adaptation, resilience, and community-oriented risk reduction.
As this debate continues in California, it will be a really important arena for climate, environmental justice, housing justice, and equity groups to engage. Insurance markets are an intimidating topic (I’m admittedly daunted to even write this newsletter about it), but it will be crucial to get involved and not watch from the sidelines. Research like the report from CCI help give us fodder for new and progressive solutions to the problem, and provide proposals for us to respond to and build upon.
Lastly, I would be remiss not to mention that the California Green New Deal Coalition released our 2024 ballot endorsements and proposition guide this week. If you haven’t already, please check it out!
WHAT WE’RE READING
Housing nonprofit alleges widespread discrimination against Section 8 tenants in California (LA Times)
Invitation Homes agrees to pay $48 million to settle claims it saddled tenants with hidden fees (Associated Press)
Sign on request: SAJE has been leading the fight to end renovictions in Los Angeles. They are circulating a sign on letter, and you can use this form to add your organization. I strongly encourage everyone to support this effort!
Feel free to reply any time! I always enjoy hearing from people and getting any feedback/questions/additional thoughts.
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