The National Multifamily Housing Council (NMHC) applauds Chairman Brown and Ranking Member Scott, as well as the other Senate Banking, Housing and Urban Affairs committee members, for holding today’s hearing on a critically important issue: staggering insurance cost increases. Michelle Norris, Executive Vice President of National Church Residences in Columbus, Ohio, an NMHC member, provided testimony on how rapidly rising insurance costs have hurt housing production and affordability.
Rental housing providers have faced an unpredictable and costly insurance market for some time, adding to the increased cost of rental housing. All apartment businesses (market-rate, workforce, affordable) have been affected, but the issue has been particularly acute in the lower-income and middle-income housing space, and the costs of all lines of insurance (property, liability, cyber) have risen dramatically.
A recent report conducted by NMHC found that property insurance costs have risen a staggering 26 percent over the last year. In many cases cost increases have been in the triple digits.
“The nation is facing a housing affordability crisis and the volatility in the insurance and reinsurance market is preventing rental housing providers from building more needed housing and make needed improvements to existing housing,” said Sharon Wilson Géno, NMHC President. “A more stable insurance market will help keep costs manageable, which will make rent more affordable.”
The 2023 State of Multifamily Risk Survey and Report also found rising costs have led leading policyholders to raise deductibles and insurers to limit coverage amounts and include new policy limitations. In the past three years:
- 61 percent of the respondents had to increase their deductibles to maintain affordability.
- 57 percent of the respondents indicated that their insurance carriers included new policy limitations to reduce their exposure.
- 34 percent reported that their insurance carriers limited or reduced coverage amounts.
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the apartment industry. We bring together the prominent owners, managers and developers who help create thriving communities by providing apartment homes for 38.9 million Americans, contributing $3.4 trillion annually to the economy. NMHC provides a forum for insight, advocacy and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, e-mail the Council at info@nmhc.org, or visit NMHC's website at www.nmhc.org.
