This is a really massive story, and I've worked on this for years, and so a thread, but -- TL;DR: The collapse of California's home insurance markets due to climate risk is underway, and it is bad.
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In 2013-14, I worked on a national climate risk assessment for the U.S.
It was nerdy as hell, deep and substantive, and everyone else on the project was 100 times smarter than me.
The take-away, though, was stark: Americans were being misled by sprawl developers about their degree of climate risk exposure. riskybusiness.org/report/nationa…
It's kind of just been assumed that California sprawl developers can build single-unit homes as far as the eye can see, including into high fire- and flood-risk zones, and nothing bad will ever happen.
Well, the bad shit. It's happening. abc10.com/video/news/loc…
For the last ~ two decades, insurance industry -- and really, re-insurance industry -- has been developing increasingly sophisticated models of where climate change will cause most economic damage.
The first Risky Business report showed those locations.
We predicted insurance industry would start by raising premiums, and then gradually just cancel policies in those locales, and leave taxpayers holding the bag.
When it comes to sprawl in fire hazard areas, the bag is large: Over $3 trillion in California. realtor.com/research/wildf…
You'll notice a pattern -- risk is highest for single-unit homes, because sprawl, fire/flood zones, and single-unit homes -- well, they're all the same thing.
This week, the California agency in charge of providing a backstop for cancelled insurance?
She said, "We're broke."
But while California taxpayers will be hit to bail out these high-risk properties, the sprawl developers who reaped massive profits saddling us with unfunded liabilities will be fine.
Their profits are safe, thanks to urban NIMBYs, who are basically sprawl developer shills.
The bills are coming due, and in fact, we don't have anywhere near the money to cover them.
The sprawl is going to have to die. Sure, folks can harden properties, make them "fire safe" to an extent.
But many ecosystems literally evolved to catch fire.
And we make people live in them.
That's going to have to end. If you can't connect dots between non-viability of sprawl due to climate risk, and what's *really* going to happen to car culture, well ...
Bless your heart. I hope you never get caught on the wrong side of this.
Point number two is deeply under-appreciated & especially hated by the anti-housing left, but unequivocally true:
The scale of financial risk is an order of magnitude larger than the entire government. We have to let markets work. There's no other way.
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