𝐈𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐜𝐨𝐬𝐭𝐬 𝐟𝐨𝐫 𝐚𝐟𝐟𝐨𝐫𝐝𝐚𝐛𝐥𝐞 𝐡𝐨𝐮𝐬𝐢𝐧𝐠 𝐡𝐚𝐯𝐞 𝐣𝐮𝐦𝐩𝐞𝐝 𝐨𝐯𝐞𝐫 𝟗𝟎% 𝐬𝐢𝐧𝐜𝐞 𝟐𝟎𝟏𝟗.

The Hidden Threat in Affordable Housing Budgets

When most people think about the cost of operating affordable housing, their minds go straight to construction, compliance, or staffing. Rarely does insurance rise to the top of the conversation. But in recent years, insurance has quietly become one of the most destabilizing forces in the industry.

Since 2019, insurance costs for affordable housing have jumped over 90 percent. Let that sink in. In an industry already operating on razor-thin margins, that kind of increase is not just another line item on a budget spreadsheet. It’s a systemic threat to housing stability.

The Squeeze That No One Sees

Affordable housing operators are used to working within tight constraints. Rent restrictions limit revenue growth. Compliance requirements demand staff time and expertise. Capital needs are constant and often underfunded.

When insurance premiums surge faster than revenue, operators are forced into impossible choices. Do you defer maintenance, knowing it will cost more down the road? Do you cut resident services the very programs that stabilize households and build community? Do you reduce staffing, leaving properties vulnerable to turnover and burnout? Or do you walk away from projects that communities desperately need, because the math no longer works?

None of those choices are acceptable, yet they are happening in real time.

Rent Control Makes It Harder

In rent-controlled markets, the pressure is even greater. Rent growth is capped by regulation. Margins disappear as expenses outpace revenue. Owners are squeezed, residents are impacted, and developers think twice before starting new projects.

I’ve seen projects stall before they ever break ground, not because demand wasn’t there, but because the insurance pro forma made the deal unworkable. That’s not just a financial problem it’s a community crisis. When affordable projects fail to pencil, the people who pay the price are families, seniors, and vulnerable residents who need housing stability most.

Beyond the Numbers

What makes insurance different from other expense categories is its invisibility. Staff can see when maintenance budgets are slashed. Residents notice when services are reduced. But few people see the impact of a premium line item quietly doubling in the background.

The cost doesn’t show up as a broken light fixture or a missing staff member it shows up as stalled development, deferred investment, and stressed operators. By the time the consequences are visible, they’ve already been compounding for years.

And unlike other expenses, insurance costs aren’t optional. You can’t shop your way out of the requirement. You can only manage how you prepare, purchase, and advocate.

Searching for Solutions

The good news is that solutions exist, but they require coordination that affordable housing often struggles to achieve.

Smarter risk management tools. Too often, risk management is reactive responding to claims after the fact. Proactive tools, from data analytics to predictive maintenance, can reduce exposure and make portfolios more insurable. Properties that can demonstrate lower risk through better systems deserve better pricing.

Scaled purchasing strategies. Affordable operators are strongest when they aggregate. Pooled insurance purchasing across portfolios, or through associations, allows properties to negotiate from a position of strength rather than as fragmented buyers. The same principle that drives economies of scale in purchasing paint and flooring applies here but with far higher stakes.

Policy changes that reflect economic realities. Affordable housing is governed by layers of local, state, and federal policy. When insurance becomes a systemic barrier, policymakers must recognize it as a threat to housing production and preservation. Incentives, subsidies, or policy frameworks that reduce the burden of insurance are essential to sustaining housing for those who need it most.

The Role of Leadership

For leaders in the industry, the insurance crisis is a call to think differently. It’s not enough to let asset managers and finance teams wrestle with renewals each year. Operations, compliance, development, and resident services all have a stake in the outcome.

I’ve seen firsthand how siloed conversations keep organizations from addressing systemic risks. The finance team sees the line item. The operations team sees the staffing cuts. The development team sees projects stall. The resident services team sees programs vanish. Each is reacting to a piece of the puzzle without seeing the whole.

True leadership means bringing those pieces together. Asking the hard questions: How does insurance affect long-term preservation? How do we communicate risk to boards and investors? How do we advocate for policy change while maintaining operational excellence on the ground?

A Housing Stability Issue

The most important thing we can do is reframe the conversation. Rising insurance is not just a finance issue. It is a housing stability issue.

If we continue to treat it as a back-office problem, we will continue to see communities destabilized, staff overextended, and residents under served. But if we recognize it as a systemic challenge, we can start building coalitions that respond with scale, creativity, and urgency.

Because at the end of the day, insurance premiums aren’t just numbers. They determine whether families have a safe, stable, and affordable place to live.

Closing Reflection

For two decades, I’ve watched affordable housing organizations find ways to stretch limited dollars into lasting impact. The resilience of this sector has always impressed me. But no amount of resilience can withstand unchecked systemic costs forever.

If you’re a leader in affordable housing, I encourage you to ask yourself: how is our organization addressing insurance risk? Are we treating it as a budget headache, or as a strategic priority tied directly to mission?

The answer may determine whether the next generation of affordable housing is sustainable or whether it quietly slips beyond reach.