The U.S. Property Insurance Crisis

and Its Cascading Impact on Affordable Multifamily Housing
 

LIHTC Production, NOAH Preservation, and the Path Forward
 

By Dr. Daniel Elkin, PhD.
Chief Strategy Officer, cdcb
March 2026

 

 

 

The U.S. property insurance market is failing affordable housing. Without federal intervention, failure will deepen and spread. Private carriers have withdrawn from risk-exposed states at a pace that has left Low Income Housing Tax Credit (LIHTC) and Naturally Occurring Affordable Housing (NOAH) with no viable admitted-market alternative, forcing both sectors into the unregulated excess and surplus (E&S) lines market — a segment with no state guaranty fund protection, no rate oversight, and dangerous carrier concentration. This paper argues that restoring a functional insurance market for affordable housing requires three interlocking federal actions: a federal reinsurance backstop to reopen admitted carrier participation; reform of HUD's Operating Cost Adjustment Factors to stop chronically underfunding operators; and mandatory disclosure of E&S placements to make an invisible systemic risk visible to regulators. Property-level resilience investment is necessary and should be funded — but it cannot substitute for structural market repair.