Rent hikes, more homelessness as climate change bites
Rising insurance premiums and other economic symptoms of climate change are expected to lead to even higher rents and homelessness without well-targeted intervention.
In a high-emission future dominated by fossil fuels, homelessness rates could quadruple within a decade.
University of Sydney modeling suggests homelessness could double by the mid-2030s even in a low emissions scenario where timely reductions in emissions limit temperature rise.
The study was published on: citiesIt runs simulations of how the Australian housing market, influenced by incomes, mortgage rates, insurance costs and other factors, would respond under various climate scenarios.
Each scenario assumes different levels of population growth, land availability, insurance costs, incomes and other economic indicators that change housing market dynamics.
In all climate scenarios, especially in a fossil fuel future, housing affordability worsens and a large share of households rent rather than own.
Rents are also expected to rise as demand for rentals increases and landlords must cover higher insurance costs.
As housing affordability and accessibility becomes more difficult, vulnerable populations are expected to face greater risk of homelessness.
Nader Naderpajouh, head of the university’s School of Project Management, told AAP the housing market was responding to climate change in a non-linear and complex way, but models suggested it would deepen housing inequality and leave renters and low-income Australians worse off.
“They are disproportionately affected by climate change,” Associate Professor Naderpajouh said.
The findings suggest that policymakers should shape policy interventions to target low-income households, renters, and people at risk of homelessness.
Assoc. Dr. Extensive government support for insurance premiums or mortgage rates could actually inadvertently deepen inequality, Naderpajouh said.
Co-author Peyman Habibi-Moshfegh said climate change was often overlooked in discussions about the housing crisis.
“The figures from our study show that future climate shocks need to be taken into account when developing new housing policies and plans,” he said.
Climate change is already contributing to higher insurance premiums and reshaping the housing market.
According to the National Climate Risk Assessment, insurance costs are expected to rise significantly over the next decade; One million homes are thought to be at high risk of being listed as uninsurable by 2050.
The Climate Council estimates that damage-related losses in property values will be $571 billion by 2030.
While the international community is committed to limiting warming to well below 2°C, it also continues efforts to stay below 1.5°C.
Within the scope of existing policy commitments, Warming up between 2.3C-2.5C expected – lower than previous estimates but still missing the Paris Agreement target.
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