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New York

NYC basements may not be insurable soon

Lenders may be wary to underwrite the properties

The remains of burned homes after Superstorm Sandy on October 31, 2012 in the Breezy Point neighborhood of Queens (Credit: Getty Images)
The remains of burned homes after Superstorm Sandy on October 31, 2012 in the Breezy Point neighborhood of Queens (Credit: Getty Images)

You might not want to bank on basement apartments boosting the city’s affordable housing stock — according to one of Europe’s largest insurers, such units won’t be insurable in the next 10 years.

“If you go much further to 2020, 2030, we can clearly say that at a scenario between 3 and 4 degrees, it’s not insurable anymore,” said Thomas Buberl, chief executive officer of AXA SA, during a panel at the World Economic Forum. “Your basement shop in New York, your basement shop in Mumbai will at this point not be insurable anymore.”

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New York and other coastal areas are more vulnerable to flooding, which is expected to increase with the rise in sea level, extreme weather events and global warming. Some properties may become too risky for companies to underwrite new policies, Bloomberg reported.

Mayor Bill de Blasio first floated the idea of legalizing basement apartments when he took office in 2014. [Bloomberg] — Kathryn Brenzel 

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Affordable HousingClimateFlood Insurance