Secretary Yellen To Unveil New Housing Initiatives to Combat Rising Costs
WASHINGTON: Today in Minneapolis, Secretary of the Treasury Janet L. Yellen is announcing a series of bold measures aimed at tackling the nationwide issue of housing affordability. These initiatives, part of the Biden Administration’s broader efforts, underscore a commitment to lower housing costs and expand access to affordable housing across the United States.
Secretary Yellen emphasizes the urgent need for action, stating, "Given the scale of the challenge, we must and will continue to do more."
Here are the key components of the initiatives to be announced:
1. New Funding for Affordable Housing: The Treasury Department will launch a new program under the Community Development Financial Institutions (CDFI) Fund, allocating $100 million over the next three years. This initiative aims to bolster financing for thousands of affordable housing units, supporting low- and moderate-income households.
2. Strengthening Financing Predictability: Efforts will be made to enhance interest rate predictability for state and local housing finance agencies borrowing from the Federal Financing Bank (FFB). This measure is expected to facilitate new housing developments by reducing borrowing costs.
3. Federal Home Loan Banks Commitment: Secretary Yellen calls on Federal Home Loan Banks (FHLBs) to increase their support for housing programs, urging them to elevate their commitment to at least 20%, focusing particularly on new construction projects.
4. Guidance for State and Local Governments: Treasury released an updated "How-To Guide" to assist state and local governments in utilizing recovery funds effectively for housing construction. This guidance aims to facilitate the creation of over 25,000 new housing units, responding to local needs exacerbated by housing market dynamics.
5. Flexibility in Capital Magnet Fund: Updates to the Capital Magnet Fund will provide greater flexibility to CDFIs and nonprofits involved in financing affordable housing. This initiative aims to streamline administrative processes and enhance resource allocation towards housing production and preservation.
These initiatives build upon previous pandemic-era efforts that prevented widespread evictions and foreclosures, ensuring stability for millions of Americans.
Secretary Yellen highlighted the Treasury’s Emergency Rental Assistance program and Homeowner Assistance Fund, which collectively disbursed over $40 billion to homeowners and renters, including substantial aid to Minnesota households.
In her address, Secretary Yellen also urged Congress to support legislative proposals, such as expanding the Low-Income Housing Tax Credit, projected to generate over 2 million new homes. These measures are critical steps towards achieving sustainable housing affordability and economic resilience.
The announcement is to be made at the Family Housing Expansion Project in Minneapolis, underscoring the Administration’s commitment to community-driven solutions and equitable housing policies. Secretary Yellen participates in a roundtable discussion with Senator Tina Smith and local stakeholders, highlighting collaborative efforts to address regional housing challenges.
Looking ahead, these initiatives mark a pivotal moment in the Biden Administration’s housing policy, aiming to mitigate the impact of rising housing costs and ensure equitable access to affordable housing for all Americans.
Source: U.S. Department of Treasury, June 24, 2024
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