WP 25-16/R – We study the unintended effects of Fair Access to Insurance Requirements (FAIR) plans developed by 26 states in the 1960s to address insurance redlining in urban neighborhoods.
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Previous versions of this paper were published by the Philadelphia Fed in 2025 and the Chicago Fed in 2024.
FAIR plans’ problematic features included prohibitions on considering environmental hazards in underwriting, mandatory insurer participation in pools that diluted underwriting incentives, and payouts exceeding market values in declining areas. Using a triple-difference design comparing pre/post-FAIR periods, neighborhoods with/without likely FAIR access, and participating/non-participating states, we find that FAIR inadvertently led to significant housing disinvestment and accelerated declines in neighborhood population, with simultaneous increases in the Black population share.
