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By Suzanne Blake
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The U.S. Treasury is starting a $100 million program to provide affordable housing nationwide, Treasury Secretary Janet Yellen said Monday.
The money will be spent over the next three years on housing projects, and the Biden administration's aim is to make housing more accessible to those with moderate or low incomes.
Previously, the Treasury's 2021 Emergency Capital Investment Program funded $8.57 billion for community lenders, who then spent $1.2 billion on affordable housing projects. The new $100 million program is slated to create thousands of affordable housing units under the Community Development Financial Institutions Fund.
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"This program dramatically reduces costs for housing finance agencies by allowing them to borrow funds at just about the rate at which the U.S. government borrows," the Treasury Department said in a statement. "This extension is expected to create a preserve of approximately 38,000 additional rental homes over the next 10 years alone."
The news comes a few days before President Joe Biden is set to face off against Donald Trump in the year's first presidential debate, with the economy likely to be a primary topic of dispute.
Nationally, inflation has caused mortgage and rental costs to surge. The June consumer price index remains above 3 percent, while shelter inflation increased by 0.4 percent.
In the days before Biden takes on Trump in the presidential debate, several of his Cabinet members, including Yellen and Transportation Secretary Pete Buttigieg, have been traveling across the country to promote his economic policies.
"President Biden and I know that prices are key household expenses like healthcare, energy, and housing are still too high, in large part due to challenges that have been mounting over decades," Yellen said in a statement. "Making life more affordable is the president's top economic priority and we are pursuing a broad affordability agenda to address the price pressures that families have been feeling."
Previously, Biden said, landlords were "rent gouging" even in the aftermath of the coronavirus pandemic, which led to many being priced out of neighborhoods or even losing their homes.
"Folks are tired of being played for suckers," Biden said earlier in the year. "And I'm tired of letting them be played for suckers."
Not everyone believes landlords are solely responsible for the uptick in rental prices, and the National Apartment Association indicated Biden and other lawmakers' policies could play a role.
"Politics has no place in housing and it's far past time for policymakers to act on housing," the National Apartment Association said in a statement at the time. "Over the coming months, NAA will continue to stand up for housing providers on the campaign trail."
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek that housing remains the largest expenditure for most Americans and continues to keep them from being able to save and invest beyond everyday living expenses.
"It's not just the lack of housing affordability but the lack of housing period," Beene said. "Many cities are struggling to keep up with the demand of housing more, and the results are more people living in more impoverished conditions or, worse, being homeless."
It is not clear how far the Treasury Department's $100 million will go and which locations will get the bulk of the funding, Beene said.
"Development and building of properties carries staggering price tags. It's a worthwhile endeavor, but it remains to be seen just how well it will benefit the current housing situation," he said.
Alan Chang, the founder and president of Vested Title & Escrow, echoed this sentiment, calling the program a "last-ditch effort" to ease the pain many Americans have been feeling over housing in the past few years.
Chang told Newsweek that "$100 million from a national perspective is a drop in the bucket, and I don't see this changing anything for the majority of Americans that cannot afford to jump in the current market."
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