"Asaf Bernstein,
an economist at the University of Colorado in Boulder, said the
findings highlighted another problem: By agreeing to buy mortgages for
homes at risk from climate change, without charging a premium that
reflects that risk, the federal government had effectively encouraged
home construction and purchases in vulnerable areas.
“It’s basically an implicit subsidy,” Mr. Bernstein, who was not involved in the study, said.
Economists
at both Fannie and Freddie have warned in the past of the risks that
climate-related increases in flooding pose to the mortgage industry. In
2016, Sean Becketti, then the chief economist at Freddie Mac, wrote that rising seas “appear likely to destroy billions of dollars in property.”
“The
economic losses and social disruption may happen gradually, but they
are likely to be greater in total than those experienced in the housing
crisis and Great Recession,” he wrote. “It is less likely that borrowers
will continue to make mortgage payments if their homes are literally
underwater.”
See also:
