Extreme weather and temperature-related risks pose a growing challenge in the affordable housing sector, particularly for those serving vulnerable populations, such as seniors and low-income individuals. This escalating risk has triggered a surge in insurance premiums and raised concerns about how to assess and combat climate risks for property owners. This issue has also permeated policy development, as evidenced by the inclusion of FEMA's National Risk Index (NRI) in the Green Resilient Retrofit Program (GRRP) to allocate funds to qualifying census tracts.
Given the increasing integration of climate risk into funding allocation decisions, it becomes imperative to ensure that the communities most vulnerable to these risks benefit the most. While tools like the NRI and EDF’s Climate Vulnerability Index (CVI) aid in understanding climate risks compared to other regions, individually, they may not be enough for devising building-level policies and programs. For example, even though increasing temperatures are seen across the country, areas with comparatively lower increases might be seen as lower risk in the NRI, potentially downplaying the actual risks they face. Underestimating and downplaying climate risk can result in inadequate adoption of critical solutions, such as energy efficient HVAC systems and building envelopes.
This paper is not an absolute risk assessment; it provides a guiding methodology for identifying and prioritizing climate risk. It leverages data and insights from multifamily affordable housing providers’ portfolios and compares findings across two climate risk assessment tools: FEMA's NRI and EDF's CVI. The paper will exemplify how best to utilize climate risk assessment tools within a portfolio and provide key takeaways on how to incorporate climate risk in program design to ensure equitable access to funding and opportunities.