Costs associated with multifamily property insurance are on the rise, posing challenges for affordable housing finance. The rising cost of insurance is largely in response to stressors increasing the cost of risk, such as climate change-related disasters, which are pushing many insurers to reduce coverage, increase premiums, or leave markets entirely. Alarmingly, the National Multifamily Housing Council (NMHC) reports that property insurance premiums for multifamily housing have increased 26% on average over the last year. Because Housing Credit developments already operate under tight budget constraints due to their limited revenue from restricted rents, surging insurance premiums place additional strain on the financial feasibility of these developments.
The AHTCC has launched a working group to shed light on rising insurance costs and help address its impact on affordable housing production. Since it launch in June 2023, the AHTCC’s Insurance Working Group has engaged in a number of activities with federal agencies to help address this complex challenge.
