Cyclone Ilsa: how disasters, the housing crisis and underinsurance can conspire to worsen inequality

Most communities along the northwest coast of Western Australia appear to have dodged a bullet after Cyclone Ilsa made landfall overnight. While some structures, such as the Pardoo Roadhouse, were damaged, the destruction was less than we feared.

But unfortunately, there will be a next time. Climate change is predicted to bring increasingly severe and frequent weather events and disasters.

As those in recently flooded regions of New South Wales and Queensland know, it takes a long time to rebuild and recover from disasters. And alarmingly, our resilience is being undermined by the housing crisis, underinsurance and inadequate planning.

The problems can conspire to worsen inequality. It means vulnerable populations are hit hardest when disaster strikes.

Read more: Is your neighbourhood underinsured? Search our map to find out

Disasters, housing and underinsurance

The cost of housing is driving many people into financial stress. With little if any money to spare, many Australians are likely not to have insurance. This leaves them extra vulnerable should disaster hit.

Renters are among those least likely to have insurance. This means they may struggle to pay for alternative accommodation if their home is affected by a disaster.

Research I’ve co-authored has revealed tragic story after tragic story of people realising too late they were not insured, or their level of insurance was too low to cover the cost of rebuilding their lives after disaster.

A national housing shortage means options can be limited for both renters and homeowners looking for alternative accommodation after their homes are damaged in a disaster.

Increasing housing supply may address some of these issues. However, inadequate planning can lead to housing developments in disaster-prone areas such as floodplains. It can also lead to environmental degradation that can increase exposure of homes and communities to disasters.

For example, coastal ecosystems such as the mangroves of northern Australia can reduce the impact of storms. They slow the speed and size of waves and stabilise soil and sediments and can offer some protection to nearby settlements.

But development for housing or infrastructure near coastal regions can put these ecosystems at risk.

Insurance for such homes and communities may become unaffordable or unattainable as disasters worsen.

Add in the tyranny of distance faced by people living in remote and rural Australia, and we see increasing numbers of people and communities at risk from the social and financial impacts of disasters in the era of climate change.

Failing to address this mix can worsen inequality

If left unaddressed, our current housing crisis coupled with climate change could see more and more people living in the kinds of shanty towns and tent cities seen around the time of the Great Depression.

We risk turning back the clock on gains made in improving urban liveability. This will further stretch the embattled social service sector and the capacity of governments to ensure community resilience.

A key aspect of resilience is lowering the gap between rich and poor, recognising that people and communities recover better if they can work together.

So any action we take needs to be focused on social equity and involve coordination across the three tiers of government.

Planning needs to respond to the relationship between disasters, housing, and insurance.

This includes a systematic and equitable effort to relocate communities out of high-risk areas. It means protecting ecosystems that in turn help to protect communities.

It also means ensuring new housing is safe, affordable, insurable and located in safe places, designed to withstand local risks.

Read more: Underinsurance is entrenching poverty as the vulnerable are hit hardest by disasters