Center for Public Enterprise is excited to share with our community this important research completed by our Spring 2025 Research Assistants at American University’s Master of Public Administration and Policy: Jacqueline Crespo, Taylor Jones, Sarah Moore and Tommy Zabonik. The Impact of Fluctuating Insurance Coverage on Affordable Housing explores how escalating insurance premiums are threatening the sustainability of affordable housing in the United States. Affordable housing providers face significant financial strain, leading to deferred maintenance, increased rents, or outright property closures. Case studies in California, Texas, and Hawaii demonstrate that insurance cost spikes as high as 500% are rendering both new developments and ongoing operations financially unfeasible.
To address this crisis, the authors evaluate alternative insurance models such as captive insurance, risk pooling, and public-private partnerships. Captive insurance programs—where providers create their own insurance companies—emerge as the most promising solution, offering stability, cost control, and flexibility. Case studies like the Milford Street Association and Home Forward show how affordable housing organizations have successfully implemented captives to customize coverage, improve risk management, and reduce long-term expenses. The paper outlines a roadmap for forming captives, discusses regulatory differences across states, and emphasizes the need for federal support to enhance coverage and mitigate systemic risks. Ultimately, the study advocates for broader adoption of innovative insurance models to protect affordable housing amid growing climate and economic pressures. CPE would like to thank the authors for their fantastic work and a special thank you to American University’s MPA program and Professor Nathan Newman.
Rising Insurance in America
