Outlet: Financial Times

“We’ve encouraged development in risky areas through misguided local, state and federal policies when it comes to where and what we build, how we finance and how we insure,” says Ben Keys, a professor at the Wharton School of the University of Pennsylvania, who has researched the impact of climate risk on insurance premiums.

“This is a set of long-term mistakes that’s going to take a long time to correct,” he says. “We have barely even started to throw a full set of co-ordinated policy responses at this problem.”

Without co-ordinated federal, state and local policy, the housing market has been more or less left to its own devices to react to growing climate risks, say housing experts. So far, demand nationwide still exceeds supply. And some high-risk places are still, for much of the year, “lovely places to live”, which have kept rents high and continue to draw residents and visitors, says Keys of the University of Pennsylvania.

But as insurance premiums continue to rise, buyers may be increasingly less willing to bear risks, says Keys.

Photo credit: FT montage/AFP/Getty