When I wrote about the high cost of not spending to mitigate climate change, I was thinking more in terms of widespread destruction of public infrastructure. I made this a matter of public expenditure only. I wasn’t particularly focused on the immediately externalized costs that the consumer would have to pay. So: Recent news out of Florida indicates that some homeowners will face increases of up to 30% in their insurance policies when renewing. As Hurricane Laura dealt no fewer than several billion in damages to the Gulf Coast, other communities are still rebuilding from Hurricanes Harvey ($125 billion), Maria ($92 billion, largely not in the continental US), Dorian ($5 billion). And, of course, many more, and many more to come.
IT WAS ALREADY BAD
Florida, just as California, its estranged, liberal cousin, basks in the same ‘ecology of fear’ that Mike Davis used to describe LA. Don DeLillo wrote in White Noise (1984):
“Only a catastrophe gets our attention. We want them, we depend on them. As long as they happen somewhere else. This is where California comes in. Mud slides, brush fires, coastal erosion, mass killings, et cetera. We can relax and enjoy these disasters because in our hearts we feel that California deserves whatever it gets. Californians invented the concept of life-style. This alone warrants their doom.”
Florida already has exorbitant insurance rates at around 60% more than the national average. So, a 30% year-over-year increase represents almost $1100, which might well work out to a whole mortgage payment or two. And this isn’t by any means the first time that such issues have arisen in the Sunshine State, nor are the issues limited by its borders. A number of insurers sparked public outcry when they decided to drop certain policyholders in extreme risk zones after California wildfires. California has tried to put a stop to this at a regulatory level, but even a student struggling through econ 101 such as myself will understand why that will drive costs through the roof. What strings could an insurer attach to a policy? And at what cost will a policy be offered? No doubt, both could be extreme. It makes sense from a financial standpoint, as insurance operates on a model of pooled monthly premiums to compensate (effectively decreasingly rare) occurrences of high cost payouts. Increased incidence of increasingly expensive payouts means less profit, but without rate increases, insurers might well go bankrupt from increasingly severe and decreasingly predictable weather events.
TECHNICAL SOLUTIONS ALONE WILL NOT SAVE US
There are a limited number of ways to nature-proof a house. In my Construction and Design Standards Guide, which won me a I write that “the House always wins.” The writ-large House is the House that is planet earth. No precision-engineered German floodgates are going to protect buildings if they’re just a hair under-designed. No James Hardie product is going to stop winds that exceed the maximum tolerances of any weather we’ve planned for. To illustrate using hyperbole, you couldn’t build a house on a volcano, no matter how much steel, concrete, or hi-tech systems you integrated into the construction.
While this “dark side” of market transformation in insurance will drive up costs for homeowners, it might well also have the exact opposite effect for multifamily. Tampa, for example, charges hefty impact fees as a disincentive to new greenfield development. The city has seen a boom in high-density construction in the urban core, even amid the threat of climate change. While admittedly a bit of a generalization, higher-density development usually involves sturdier materials, and this means more resiliency to extreme weather. I don’t mean that we should stop building in coastal areas altogether. Rather, it’s just important for us to learn how to adapt– and what adaptation looks like. The Florida insurance case, however, suggests an existential threat to single-family housing development. It also suggests an alternative path forward– for how we think about not only housing but also how we think about climate adaptation.
The Handbuilt City is a proud organizational member of the American Society of Adaptation Professionals, a membership organization that works to advance excellence, collaboration, and professional development in the field of climate adaptation.