A new report by First Street Foundation finds that climate change is exacerbating economic divides in American communities, with rising insurance costs making broad swaths of cities unaffordable. The report projects a massive drop in property values across America over the next 30 years, while certain properties will see significant gains.
The findings point to a complex climate future where inequality grows as wealthy enclaves rise in disaster-impacted cities. Rising insurance rates have tripled nationwide over the past 15 years, with some regions facing three- to fivefold increases. This is expected to drive a massive drop in wealth for most Americans, who rely heavily on their homes as a source of wealth.
However, not all cities are experiencing this trend. Regions like Miami Beach and Los Angeles will continue to attract investors due to their resilience and economic growth. Conversely, neighborhoods like Altadena and south Jamaica Bay in New York City are facing financial decline due to rising insurance rates and declining property values.
The report’s author sees a “financial death spiral” emerging at the neighborhood level, where increasing disaster risk drives declining property values in a self-reinforcing feedback loop. This trend is expected to continue compounding over time, with private investment and federal and state infrastructure dollars pouring into ever-riskier cities.
Ultimately, the report’s author believes that this issue will not be resolved in the next 30 years, but rather will require adaptation and continued investment into disaster resilience measures.
Source: https://thehill.com/policy/energy-environment/5116070-climate-change-economic-inequality-insurance-costs-report