The Biden administration is unveiling steps to increase affordable housing as home and rent costs continue to rise.
Treasury Secretary Janet Yellen will announce new initiatives Monday to address the supply of housing. The Treasury Department said in its announcement that the new steps will “strengthen” programs and policies, such as tax incentives and fiscal recovery programs, that address affordable housing.
“We face a very significant housing supply shortfall that has been building for a long time,” Yellen said in prepared remarks set for Monday afternoon, according to The Associated Press. “This supply crunch has led to an affordability crunch.”
The initiatives will include establishing a new program that will give an additional $100 million over the next three years to support funding affordable housing and urging Federal Home Loan Banks to boost their spending on housing programs, among other measures.
In her remarks later Monday, Yellen will “will urge Congress to pass bipartisan legislation to expand the Low-Income Housing Tax Credit,” according to the department. She will also press state and local officials to “remove excessive legal barriers to housing development.”
The announcement comes after home prices reached a record high in May, with the median price of an existing home that sold hitting $419,300. This is up nearly 6 percent from last year and marks the largest gain in prices since October 2022.
A new analysis from the Treasury Department shows that housing demand has grown more than housing supply since 2000 due to changing demographics. The rise in house prices also comes as the Federal Reserve has kept interest rates at a 23-year high of 5.25 percent to 5.5 percent.
The Associated Press contributed.