Insurers often misjudge affordable housing as high-risk, even when properties are well-maintained and code-compliant, leading to inflated insurance costs that can jeopardize project viability. Brokers like Nathan Kerr are pushing to change this perception.
As premiums climb and coverage limitations increase in the insurance market, affordable housing providers find themselves in a dire situation. In some regions, coverage is only available through high-cost surplus lines, creating new financial barriers in a sector already stretched thin.
Nathan Kerr has spent his entire 25-year career at Scott Insurance, where he launched the affordable housing practice group a decade ago. He’s worked closely with owners, developers, property managers, equity syndicators, and CDFIs - watching insurance move from a budgeting issue to a critical obstacle. For him, the work is personal.
“I love the people in the industry and the missional side of the work,” Kerr said.
He’s clear about the root problem: long-standing misconceptions. “The market has been tough recently from an insurance standpoint,” he said. “But even before that, the challenges were always about stereotypes and misunderstandings of the affordable housing industry.”
Now, with premiums more disruptive than ever, clients are pushing back. “They’re asking, ‘What can I do? How can I take control of this?’” Kerr said. “It’s really helped reframe how they view insurance and risk management.”
From advocating for better underwriting to promoting tools like captives and higher deductibles, Kerr is helping stakeholders rethink how they manage - and communicate - risk. His goal: a smarter, fairer insurance approach rooted in education, evidence, and long-term discipline.
A shift in understanding the industry is essential, especially when it comes to insuring affordable housing properties. Kerr pointed out that the affordable housing industry has higher compliance standards and greater stakeholder oversight.
This incentivizes owners to continually reinvest in their properties through capital improvements, ultimately making these properties safer and more attractive from a risk standpoint; however, insurers don’t always see it that way.
Misconceptions like these are what Kerr believes brokers must work to dismantle. "The affordable housing industry is actually a much higher-performing asset class than the broader real estate market,” he said.
Education is also necessary to help owners and developers working in the industry understand how they can better utilize insurance, including getting strategic about risk retention.
Organizations can control their total cost of risk by retaining more predictable losses and managing claims. "Let's look at alternative ways of funding the predictable losses, whether in a captive or through a higher deductible," Kerr said.
Kerr emphasized that brokers need to play the role of advocate, especially with insurers who may hesitate to underwrite affordable housing portfolios. “This is a class of business that you should write, and you should aggressively write,” Kerr said.
That same advocacy must extend to the public. Community perception often lags behind the reality of affordable housing, and he believes brokers have a part to play in changing that.
“People think affordable housing will lower property values, and that’s not the case,” he said. “These are our neighbors, our community.”
The stigma around affordable housing continues to influence zoning debates and public resistance. But a growing body of research from organizations like the Urban Institute shows that professionally managed affordable developments stabilize neighborhoods rather than destabilize them.
Developers, too, need help telling a stronger story to underwriters. “Know your properties, know your schedule, and know what you're doing from a risk management standpoint," Kerr said. “If your property is a 1970s apartment building but was rehabbed four years ago, know that. Be able to tell that story - wiring to roofing.”
For Kerr, risk management isn't just a budget line item. It's a discipline that, when appropriately integrated, will improve performance and support a more holistic outlook.
"Proper risk management is more than just insurance,” he said. “Capital expenditures to make a property safer, employing risk transfer mechanisms, and paying close attention to your claims are also critical components.”
He's seen firsthand what happens when affordable housing owners lean into this approach. "Our affordable housing book has consistently had better claims performance over the past 10 years," he said. "They are managing their risk well. They are looking at it differently."
Kerr said the biggest obstacle, whether with underwriters or affordable housing organizations, remains education. And that education isn't just strategic - it's critical.
"We need more insurance carriers that are interested in writing affordable housing, not less," he said. "That's been our number-one goal for the past 10 years - trying to make that a reality."
