Even though many academics are sounding the alarm over the housing affordability crisis in the United States, the affordability problem continues to intensify. Recently, researchers at Freddie Mac increased their 2018 housing shortage estimation by 52% to 3.8 million housing units. In addition to the staggering increases in development costs over the last decade, escalating operational costs are threatening the affordable housing industry. One of these unseen costs that is significantly impacting the successful operation of affordable housing organizations is insurance.
This recently published paper provides insights and analysis surrounding the use of crime scores by insurance companies in predictive modeling and how this practice has led to premium increases and/or significant challenges in obtaining coverage in the affordable housing industry.