A8 EZ RE THE WASHINGTON POST.WEDNESDAY, OCTOBER 27 , 2021
sponsors. Activists held a sign
saying “Stop insuring the climate
crisis.”
Then in September, Chubb,
which has long resisted pressure
to cut back its insurance and
investments in fossil fuels, be-
came the 16th insurer to drop its
policy for the Trans Mountain
Pipeline, which carries crude
and refined products from the oil
sands in Alberta.
It remains unclear how much
further Chubb is interested in
going, but the underwriter al-
ready avoids buying new debt or
equity investments in companies
that generate more than 30 per-
cent of their revenue from ther-
mal coal mining or energy pro-
duction from coal. Chubb also no
longer underwrites the construc-
tion and operation of new coal-
fired plants for companies that
generate more than 30 percent
of their revenue from coal pro-
duction. Insurance coverage for
existing coal plants that exceed
this threshold will be phased out
by 2022, the company said.
Another major firm, Axis Capi-
tal, on Oct. 20 pledged to end all
insurance or reinsurance for new
or existing coal plants or mines,
oil sands extraction or pipelines,
and Arctic oil and gas projects. It
also said it would stop insuring
or investing in any company
getting more than 20 percent of
its revenue from coal or oil
sands.
The move “is an important
step toward a safe climate fu-
ture,” but the firm “must now
stop insuring all fossil fuel ex-
pansion, as there is no room in
the global carbon budget for new
oil and gas supply to stay within
1.5 degrees Celsius,” Elana Sulak-
shana, senior energy finance
campaigner at Rainforest Action
Network, said in a statement.
[email protected]BY STEVEN MUFSONThe campaign to stop the
proliferation of coal plants may
come down to a bit of financial
engineering: pulling the plug on
insurance coverage.
More than 30 insurance com-
panies have announced restric-
tions on underwriting coal proj-
ects, making it dif ficult for major
coal operators to line up bank
financing and investment for
mines, transportation and power
plants. Without insurance,
those investments could seem
too risky.
Thomas Buberl, chief execu-
tive of Axa, the giant French
underwriting firm, is leading a
coalition of eight major insurers
called the Net-Zero Insurance
Alliance. The goal, he said in an
interview, is to have “all the
insurers applying a methodology
to only underwrite companies
directed toward climate transi-
tion and not to the dark ages of
burning coal.”
If that sounds like corporate
activism, it’s because many cor-
porate executives are trying to
use their financial clout to
achieve what others have had
trouble achieving through regu-
lation or negotiation at events
such as next week’s climate sum-
mit, COP26, in Glasgow, Scot-
land. And many activists who
have had trouble rallying govern-
ments are looking to the private
sector for reinforcements.
“Insurers are also major inves-
tors,” activist group Insure Our
Future said on its website. “US
insurers have $582 billion invest-
ed in fossil fuels, with almost
$90 billion invested in coal.”
While most European insurers
have ended or limited the cover-
age they provide to coal projects,
many of the biggest names in the
U.S. insurance business — in-
cluding AIG, Berkshire Hatha-
way and Travelers — have not.
Buberl said that another major
insurer, Japan’s Tokio Marine,
also continues to do business
with fossil fuel companies.
“Climate change is a complex
issue and the world cannot cur-
rently meet its energy needs
through purely green technol-
ogies,” AIG said in a J une 2021
report. “We do not feel it would
be in the best interest of our
stakeholders and the general
public, which expects reliable
access to energy, to abruptly
reduce or stop insurance access
to clients that are heavy users or
producers of fossil fuels.”
Jamie Kalliongis, a spokes-
woman for the Sunrise Project,
an activist climate change group
applying pressure on private
firms, responded that Peter Zaffi-
no, who became AIG’s chief exec-
utive March 1, “has done abso-
lutely nothing to course correct
on climate since becoming CEO,
making AIG one of the last major
property and casualty insurers in
the world with zero restrictions
on its coal underwriting or in-
vestments.”
Only a few insurance firms are
big enough to provide coverage
for costly coal, oil or natural gas
projects.
“Without insurance there is no
financing,” Buberl said. “If youInsurers move to cut
support for coal energy
her prospects shifting. For years
she had been pushing past low
expectations she came to see as
barriers. She was the first of the
four children in her family to go to
college, then to get a master’s
degree. She had lived among
homeowners in other Chicago
neighborhoods, but the same op-
portunity didn’t seem possible in
North Lawndale.
“No one owned,” she said.
“That wasn’t a t hing growing up.
In this community, even when we
are working our hardest, giving
all the hours we can, we still are
used to falling behind because
that’s just how it always has been.”
Here, though, Weathers was
already mentally grafting her life
into the space. At the bench by the
door, her son could do his home-
work. Over there the dog could lie
in the morning sun.
“I’m picturing Christmas, be-
cause I’m a huge Christmas per-
son,” she said. “The tree is going to
have to go in front of the window
there.”Revitalization without
gentrification
With $12.5 million raised and
the final legal steps for a land
transfer agreement with the city
set to be finalized by the end of
October, construction on the next
round of 50 homes could begin as
early as November. The develop-
ers continue to raise money, hop-
ing the success of the initial
round will trigger further devel-
opment. “We are very urgent,”
Townsell said.
In Washington, efforts to in-
clude funding for affordable
home construction at scale in the
$1.5 trillion federal infrastructure
bill continue. Two key subsidies
are needed on a federal level:
zero-interest construction fi-
nancing and zero-interest second
mortgages to home buyers who
spent $30,000 to $70,000 on their
home.
So far, the bill includes in-
creased spending on public hous-
ing but leans heavily on the same
tax credits that support rental
housing. As of last week, the two
subsidies for affordable home
construction at scale were not in
the latest bill.
“Can Congress understand
that two things have not hap-
pened in spite of 40 years of other
approaches,” Gecan said. “One:
Most inner cities have not been
rebuilt by the people living there.
The second: Equity has not in-
creased for African Americans
and Hispanic families because
they cannot buy a home. Our
approach is revitalization with-
out gentrification.”
By mid-October, the two
homes on South Avers Avenue
had yet to be sold. Weathers was
hoping to make an offer, but the
state subsidies she needs to do so
do not kick in until 2022. She
hopes to be ready to buy a house
from the project’s next round. “I
don’t know where I’m going to be
next year, and that’s scary,” she
said. “I just am going to hope for
the best.”
[email protected]before the Great Recession.
By the time Lightfoot was elect-
ed mayor in 2019, one of her first
public appearances was before
more than 1,000 North Lawndale
residents and allies asking for her
commitment to the home build-
ing project. Illinois agreed to kick
in $10 million for home buyer
subsidies. Construction began
this year on the two South Avers
Avenue lots.‘It does not belong on this
block’
Weathers stepped into the first
model home, morning light glow-
ing on the new paint and staging
furniture.
“This is three bedrooms, one
and a half baths, and it’s 1,
square feet,” said the woman
sho wing the house. “You get to
pick the flooring and the lighting
and cabinetry, so it doesn’t have
to come like this.”
“This is just crazy, because this
just looks like it does not belong
on this block,” Weathers said.
They stepped through a kitch-
en outfitted with stainless steel
applianc es. Upstairs, the bed-
room windows looked out onto
the iconic Willis Tower spiking
the downtown skyline.
“I am going to freak out right
now,” Weathers said walking
down the upstairs hallway. “I
have this tapestry on the living
room wall. I don’t know if this is a
sign or what, but I have these all
through my house.”
“I think it’s a s ign, Arica,” the
woman leading the tour said.
“You know, you could get this very
house if you wanted it.”
Weathers at that moment feltother Chicago nonprofit commu-
nity organization, constructed
aro und 100 new homes on empty
lots donated by the city. But the
office of Chicago Mayor Richard
M. Daley balked at handing over
more lots.
Townsell spotted a valuable les-
son in the defeat: Community
development was only possible if
the community organized and
pressured politicians for help.
“The reason we lost before was
because we didn’t have a base,” he
said. “We were building houses,
but we didn’t have leaders. So
now we needed to do that through
a homeowners association.”
Over the next decade, North
Lawndale residents successfully
organized around local issues, in-
cluding improvements to a li-
brar y and permit parking on
high-crime blocks to limit traffic.
“That helped us have faith we
can win,” Townsell said. “So many
folks have been losing for dec-
ades. They would call the alder-
man about their trash cans and
nothing would happen. But you
get involved with us, we’re trying
to teach people to win.”
Organizers also worked to cre-
ate demand for homeownership
by holding workshops on how
mortgages work, what to look for
in an inspection and what insur-
ance was needed. “You can’t just
have affordable housing if they
don’t teach you how to afford the
house,” said Chris Brown, a North
Lawndale resident involved in
the effort. The organizers also
wanted to help people avoid fall-
ing prey to predatory lenders,
which targeted Black and His-
panic home buyers in the yearshood to a group of local churches
for $1 per lot. The city also offered
$10,000 deferred payment loans
to prospective home buyers.
Around 1,250 homes were initial-
ly constructed with prices start-
ing as low as $50,000. The project
— called Nehemiah homes — cre-
ated a critical mass of develop-
ment and equity in the neighbor-
hood that continues today.
More than 4,500 Nehemiah
homes have been built since the
1980s in the New York City area,
generating more than a billion
dollars in total homeowner equi-
ty, according to the developers.
The project has a less than 1
percent foreclosure rate, and a
study conducted by Nehemiah
found that children who grew up
in the development earned
53 percent higher wages than
their parents.
Despite success building simi-
lar projects in other cities, Nehe-
miah has yet to be fully replicated
in another city at the same large
scale.
“If you don’t see something for
a generation or two, you stop
imagining it can happen,” Gecan
said.Building a base of support
Richard Townsell first heard
about the Nehemiah develop-
ment when he was a young orga-
nizer in the 1990s. He saw
Brownsville’s resurrection as a
blueprint.
In the early 2000s, Townsell’s
group, the Lawndale Christian
Development Corporation, a
community development non-
profit group, along with United
Power for Action and Justice, an-anything had been built. And
since the tax credit was created in
1986, it’s become the primary
funding force for low-income
housing.”
He added: “It’s the only game
in town.”
This funding emphasis, howev-
er, largely came at the exclusion of
extensive investment in housing
ownership for lower-income
earners. There are multiple pro-
grams through Fannie Mae and
Freddie Mac, as well as tax deduc-
tions. But these programs mostly
benefit “people with substantial
income,” Schwartz said. “Most of
the mortgage interest deduc-
tions, especially now, go to people
making well over $100,000.”
But some housing advocates
have begun to question this rent-
al-heavy policy.
“Using tax credits to generate
more rental housing, there’s a
high level of comfort in that ap-
proach with developers and
builders and nonprofits,” said Mi-
chael Gecan of the Industrial Ar-
eas Foundation, a national net-
work of community organizing
groups. “But it doesn’t do two
things we know homeownership
does. It doesn’t create equity. And
it does not create large-scale, crit-
ical mass ownership opportuni-
ties that can revitalize communi-
ties that have suffered for dec-
ades.”
Gecan and IAF were instru-
mental in one of the most success-
ful experiments in affordable
housing.
In the early 1980s, New York
Mayor Ed Koch agreed to sell 16
square miles of abandoned lots in
Brooklyn’s Brownsville neighbor-rented on “almost every block
from Pulaski to Kedzie,” the roads
tracing the rough east-west bor-
ders of the neighborhood.
Here was the courtyard where
she had her kindergarten gradua-
tion. That was the house where
the owners threw big parties ev-
ery year. There was the apartment
building where her father had
jumped off the balcony once
whe n the police came knocking.
But the public school building
now housed a charter school. The
couple who threw the parties had
lost the house years ago. And the
old apartment building was now
another empty lot.
But on a morning in late Sep-
tember, Weathers stood outside
the locked gates of the new model
homes, trying to connect her am-
bition with reality.
“I’ve got anxiety,” she said as
noises of last-minute construc-
tion floated from the houses.
“This is something no one I know
had or was even capable of hav-
ing. The fact that I’m even close to
touching it now is scary.”
Skewed toward rental
housing
As major cities like San Fran-
cisco and Washington grapple
with an acute shortage of afford-
able housing and rising housing
prices push low-income residents
out, some policymakers are tak-
ing another look at homeowner-
ship for low-income Americans as
both an engine for community
revitalization and individual eco-
nomic stability.
The Black and White home-
ownership gap has been particu-
larly stubborn since the 1960s —
in fact, it is slightly wider today,
despite the 1968 Fair Housing Act
and decades of investment in af-
fordable housing programs. The
homeownership gap between
Hispanics and Whites ranges
from a four-point advantage for
Hispanics in El Paso to a 39-point
edge for Whites in New York City,
according to the Urban Institute.
Those gulfs are partly ground-
ed in public policy.
In 1986, the creation of the
Low-Income Housing Tax Credit
(LIHTC) provided a financial in-
centive for developers to build
high-density rental housing for
poor residents. By creating an
attractive solution to public hous-
ing through private development,
the policy became the dominant
approach and the country’s larg-
est source of affordable housing
financing, according to the Tax
Foundation, an independent non-
profit tax polic y organization.
The program now results in the
construction of around 107,
units each year.
The Department of Housing
and Urban Development “pri-
marily supports rental housing,
and most of the budget goes to
preserving existing housing,” said
Alex Schwartz, a professor at the
Milano School of Policy, Manage-
ment, and Environment at the
New School in New York City.
“Since the ’80s and ’90s, hardly
CHICAGO FROM A
Chicago enclave tries to put homeownership within reach
JOSHUA LOTT/THE WASHINGTON POST
Two single-family homes on South Avers Avenue were developed by the Lawndale Christian Development Corpor ation in North Lawndale.
Local organizers hope homes such as these will transform the Chicago neighborhood and inner cities across the country.get the majority of the market
together to align on principles of
insuring in a climate-friendly
way, it will have an even bigger
effect on financing.” He said he
has invited insurers who have
not joined the alliance to sit in
and listen at meetings.
Coal companies are already
feeling the pinch.
“Increasingly, both foreign
and domestic banks, insurance
companies and large investors
are curtailing or ending their
financial relationships with fos-
sil fuel-related companies,” Pea-
body Energy said in its annual
report. “This has had adverse
impacts on the liquidity and
operations of coal producers.”
Insure Our Future estimates
that coal companies face insur-ance rate increases of up to
40 percent.
“Insurance and financial insti-
tutions need to recognize the
essential role coal continues to
play in providing affordable and
reliable electricity around the
world, as well as in providing the
metallurgical coal needed for
steel,” National Mining Associa-
tion spokeswoman Ashley Burke
said in an email. Citing high fuel
prices in Europe, she said, “you
will see why fuel targeting
doesn’t work and why vilifying
the fuels required to keep the
lights on is counterproductive.”
But insurers who haven’t
joined the Net-Zero Insurance
Alliance are also feeling pres-
sure. Many experts point out that
coal assets could be “stranded,”meaning they would be unable to
be put to constructive use before
a new era puts an end to demand
for their products.
On March 24, Sens. Sheldon
Whitehouse (D-R.I.), Jeff Merk-
ley (D-Ore.), Elizabeth Warren
(D-Mass.) and Chris Van Hollen
(D-Md.) wrote to Chubb chief
executive Evan Greenberg urg-
ing him to curtail coverage of
coal companies. “It goes without
saying that the physical risks of
climate change pose a serious
threat to insurers, both on your
assets side and on your claims
side,” they wrote.
Later, activists brought a 1 5-
foot-high inflatable torso of
Greenberg, surrounded by
flames, to the U.S. Open tennis
tournament, which Chubb co-GEORGE DAY/INSURE OUR FUTURE
Climate change demonstrators last month display a likeness of Chubb chief executive Evan Greenberg
during the U.S. Open tennis tournament, which the insurer co-sponsors, in New York.