The Biden administration announced the allocation of $85 million in housing funds to 21 state and local governments as part of a new program designed to remove barriers to the development and preservation of affordable housing units. The announcement was made by Vice President Kamala Harris and Department of Housing and Urban Development (HUD) Acting Secretary Adrianne Todman.

The funds come from HUD's initial Pathways to Removing Obstacles (PRO) to Housing program, created in the fiscal 2023 appropriations bill. The program aims to help update state and local housing plans, revise land use policies, and streamline the permitting process for new developments. This initiative is part of a broader strategy to address the high housing costs that have become a major concern for younger voters.

A chronic shortage of housing continues to drive up rentals and contributes to lingering consumer price inflation, delaying potential Federal Reserve interest rate cuts. "This investment is part of a larger strategy to lower rents and help more Americans buy a home," Harris said, adding that President Biden has proposed a national housing plan to build 2 million units of affordable housing.

On Tuesday, U.S. Treasury Secretary Janet Yellen announced that $100 million in revenue from COVID-era community lending investments would be redirected to a new affordable housing financing fund. The awards cover a wide range of U.S. cities, including $6.7 million for Los Angeles County, $6.6 million for the state of Hawaii, and $2.5 million for Ketchum, Idaho. Harris noted that a $2.1 million award to Milwaukee would help the city provide subsidies to builders for developing vacant lots and abandoned buildings. A $4.5 million grant to Denver will provide low-cost loans to housing developers to connect to utilities.

More than 175 communities applied for the funds, and the Biden administration plans to release another $100 million in grants later this summer. Additionally, Biden has requested another $100 million in his proposed budget for the 2025 fiscal year, which starts on October 1.

Harris and Yellen also urged Congress to pass Biden's proposed $10,000 tax credit for first-time homebuyers and a $25,000 equity grant for first-generation homebuyers in disadvantaged families. These proposals have stalled in the Republican-controlled House of Representatives. (Source: ET)