U.S. Treasury Secretary Janet Yellen announced Monday new department efforts to use its existing authorities to increase the supply of housing as part of the Biden administration’s push to lower housing costs.
“Quality housing that is affordable supports good health, saving families from unsafe situations such as lead exposure. It supports education, preventing frequent moves that disrupt learning. And it supports job possibilities, enabling workers to live close to jobs where they’ll be most productive. For many Americans, housing is a linchpin of the American Dream and a gateway to the middle class,” Yellen said in her remarks, delivered at the recently completed Family Housing Expansion Project in Minneapolis, Minn.
Yellen outlined specific initiatives the Treasury will engage including:
- A new Treasury program administered by the CDFI Fund that will provide an additional $100 million over the next three years to support the financing of affordable housing;
- An effort to provide greater interest rate predictability to state and local housing finance agencies borrowing from the Federal Financing Bank to support new housing development;
- A call to action for the Federal Home Loan Banks to increase their spending on housing programs;
- A new “How-To Guide” to support state and local governments in using recovery funds provided by Treasury to construct housing; and
- An update to the Capital Magnet Fund to provide greater flexibility to CDFIs and non-profits that finance affordable housing.
These efforts build on the Treasury’s actions during the pandemic, such as the Emergency Rental Assistance program and Homeowner Assistance Fund, which kept Americans in their homes and resulted in historically low foreclosure and eviction rates even at the height of the pandemic.
In her speech, Yellen also urged Congress to pass bipartisan legislation to expand the Low-Income Housing Tax Credit, which would collectively build and preserve over 2 million homes and will urge additional state and local action to remove excessive legal barriers to housing development.
“Eliminating needless legal barriers to housing development doesn’t just affect individuals and communities,” she said. “Economists estimate that restrictive residential land use regulations cost our country up to 2 percent of GDP each year. I strongly encourage more state and local governments to take additional action to address the housing shortage, and I look forward to continuing to make sure the federal government is a strong partner to them.”