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In Sun Belt states like North Carolina, developers of low-income apartments are abandoning coastal areas. There, climate change has pushed up sea levels up nearly a foot over the past seven decades. From member station WHQR in Wilmington, Kelly Kenoyer reports.
KELLY KENOYER, BYLINE: Developer Stephanie Norris was born and raised in coastal North Carolina, and she always knew that's where she wanted to build.
STEPHANIE NORRIS: I only work in North Carolina. My dad always wanted me to go - oh, go do some projects in South Carolina or Virginia. No, thank you. I'm very comfortable here. And this is, you know, my community.
KENOYER: Norris owns and operates 25 properties throughout the state, concentrated near the coast. They're all Low-Income Housing Tax Credit properties. It's a federal program that helps developers build housing for working-class and low-income people.
NORRIS: It's for your seniors, obviously. It's for working families. It's kind of a broad spectrum of our entire community.
KENOYER: Norris' once-profitable industry is starting to shift as more extreme weather events, like heavy rain and hurricanes, drive up insurance rates for multifamily housing.
NORRIS: Our affordable property locations in New Hanover County - I think it would be more on the order of about a 70% increase to the existing premiums.
KENOYER: That's an average premium increase of 70% each year over the past three years for one of her properties. Norris says that comes out to about a thousand dollars this year for each unit. And under federal regulations, she can't increase rent by more than $50 to cover the change. Some of her newest properties are costing her so much in insurance, she worries she won't be able to cover debt service. And then...
NORRIS: I'm no longer a developer anymore. I can't keep doing this even though I love it and it's my purpose.
KENOYER: Rising insurance rates on low-income apartments aren't just a problem in hurricane-prone areas like the southeast. Wildfire and winter storms have disrupted insurance markets from California to Texas. Chip Stuart is with the national insurance brokerage HUB International. He says insurance volatility is having a chilling effect on new affordable housing.
CHIP STUART: I kind of see a pause on developments. I've talked to a large developer out in California here, and they aren't so sure they want to build anymore until this financial crisis passes. The loans don't seem to bother them as much as it's the insurance.
KENOYER: In North Carolina, Stephanie Norris says she may have to balance out her portfolio by building further inland and pausing development of property in risky coastal areas. Coastal communities, however, need her apartments. Her tenants, she says, support the tourism economy.
NORRIS: Ultimately, it only drives our local workforce and people out of New Hanover County.
KENOYER: There's no silver bullet. But advocacy groups say there are some straightforward fixes, like having all the different federal agencies involved with affordable housing coordinate their insurance requirements or creating certificate programs that make insurance companies more confident that a building is climate-resilient. It's clear to low-income housing developers that something's got to give. The U.S. insurance system is struggling under the strain of climate disasters, with 24 of them costing more than a billion dollars each so far this year. All of this is fueling an affordable housing crisis, especially in coastal areas. For NPR News, I'm Kelly Kenoyer in Wilmington, North Carolina.
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