Washington — The Biden administration announced new measures to increase access to affordable housing as the cost of living rises dramatically post-pandemic due to still-high prices for groceries and other essentials and high interest rates.
Treasury Secretary Janet Yellen is expected to tout the new investment during a visit to Minneapolis on Monday. This includes providing $100 million in new funding over the next three years to support affordable housing financing, strengthening the Federal Financing Bank’s affordable housing financing and other measures.
As the housing crunch emerged as an issue in this year’s general election, interest in housing prices increased.
“We are facing a very serious housing shortage that has been under construction for a long time,” Yellen said in remarks prepared for delivery Monday afternoon. “This lack of supply has created a lack of affordability.”
Yellen said the administration is “pursuing a broad affordability agenda to address the affordability pressures families are feeling.”
Homebuyers and renters alike are facing rising housing costs, which have skyrocketed since the pandemic. Home prices increased 46% between March 2020 and March 2024, according to the Case-Shiller 20-City Composite Home Price Index. Housing costs have been rising faster than incomes over the past two decades, according to a new Treasury analysis.
Meanwhile, sales of previously occupied U.S. homes fell for a third straight month in May, as rising mortgage rates and record high prices discouraged many would-be homebuyers during what is traditionally the busiest period for the housing market.
For low-income Americans, there is a national shortage of more than 7 million affordable housing units for more than 10.8 million very low-income American families, according to statistics from the National Low Income Housing Coalition. And according to the group, there is no state or county in the country where a renter working full time at minimum wage can afford a two-bedroom apartment.
In some cities it is becoming a crisis. For example, in Martha’s Vineyard, Massachusetts, housing costs have become a public safety issue as it has become difficult to attract and retain correctional officers and 911 dispatchers.
President Biden and presumptive Republican nominee Donald Trump have come together to discuss ways to make life more affordable for ordinary Americans, including Trump’s proposal to make tips tax-free for workers and Biden’s pursuit of a student loan repayment plan for borrowers. Various proposals were put forward. A Trump campaign spokeswoman did not respond to a request for comment from The Associated Press.
But rising housing costs have some economists predicting the crisis won’t end until the Federal Reserve lowers interest rates to 5.3%.
Sal Guatieri, chief economist at BMO Capital Markets Economic Research, wrote Friday that little will change in the housing market “until the Federal Reserve cuts its policy rates.”
Diane Yentel, president and CEO of the National Low Income Housing Coalition, said the White House has been working to prevent evictions and address the housing crisis, but “there is still much more work to be done.”
“Congressional action is needed to quickly enact transformative and much-needed housing investments,” Yentel said. “Only through executive action and strong federal funding can the nation truly solve its affordable housing crisis.”
In her speech, Yellen plans to urge Congress to pass Biden’s budget plan announced in March.
The budget calls on Congress to provide tax credits for first-time homebuyers and includes plans to build more than 2 million homes. We will expand housing tax deduction benefits for low-income people.
The Biden administration has taken other steps to increase housing supply, including launching a multi-agency effort to encourage states and cities to convert more vacant office buildings into housing units, and committing billions of federal dollars to facilitate such conversions. You can use .
In July 2023, the Department of Housing and Urban Development will grant $85 million to communities to reduce barriers to affordable housing, such as zoning restrictions that have hindered increased supply and density of affordable housing in some areas. provided dollars.
