The Future of Housing Affordability in the Face of Climate Change / By: Rika Nishikawa

For the past decade, home listings have become less affordable, with only 15.5% of home listings deemed affordable for a typical US Household in 2023 ( Redfin , 2023) . This has been building up for years and may only get worse—because of climate change. Repairing climate-related damages is getting more expensive and making it a financial risk for insurance companies to cover homes with high climate risk. In California, State Farm and other major property insurers faced billions of dollars in losses in 2021 ( California Department of Insurance , 2022 ), leading some to increase premiums or even back out of states entirely, leaving residents scrambling to find new insurance. Real estate broker Nancy Yockel, who owns property in California, states, “ All homeowners are dealing with the effects of climate change. In the pocketbook, immediately, with insurance… Some insurance carriers are leaving the state of California. They are just making a financial decision that it is no longer a profit center to insure homes in California. ”  The housing market comes from a long history of discrimination. Adding climate change’s severely disproportionate impacts, the struggle for homes is only exasperated. Compared to black households, white households had three times the number of affordable housing options ( Redfin , 2023 ), making it harder for black households, especially those living in climate-risky areas, to move out to safer homes.  Properties in greater danger of sea level rise also have seen higher mortgage interest rates, making home purchases more expensive. It’s becoming increasingly important to consider where to build new properties, how climate change may impact them, and whether it’s financially productive.  Dr. Raymond Lodato, a University of Chicago professor specializing in environmental policy and urban sustainability, stresses the transformation of housing because of climate change, “ I think there is going to be a shift in the market… People are going to have to seek higher elevation… this is going to cause a lot of migration and a lot of shifting around. All of that will have impacts on the housing market… and what housing is available will be snatched up pretty quickly. That could cause prices to rise and therefore cause another affordability crisis. ” It’s safe to say that housing will be one to watch in the world of climate change.  List Sources: Stats Redfin: https://www.redfin.com/news/share-of-homes-affordable-new-2023/ California Department of Insurance: https://www.insurance.ca.gov/01-consumers/120-company/04-mrktshare/2021/upload/Top25grps2021wa_Revised.pdf   Interview quotes Nancy Yockel; Real Estate Broker in Chicago with Berkshire Hathaway HomeServices and a licensed real estate agent in Palm Springs, California; Dr. Raymond Lodato; Associate Intrustrucal Professor at University of Chicago,