A maintenance worker sweeps the street in front of a row of new homes in Fairfax, Virginia, on August 22, 2023.
Andrew Caballero-Reynolds | AFP | Getty Images
Treasury Secretary Janet Yellen on Monday unveiled a new slate of financing initiatives to support housing development, including a $100 million fund specifically for affordable housing.
The announcement came days before President Joe Biden faces off against former President Donald Trump in the first presidential debate, where inflation is likely to be a key point of contention.
The past several inflation reports have shown prices slightly cooling off, but shelter costs have remained persistently hot. The latest consumer price index report found overall inflation stayed flat in May while shelter inflation rose 0.4%.
“I expect that shelter inflation will moderate,” Yellen said at a speech in Minneapolis Monday afternoon. “But we face a very significant housing supply shortfall that has been building for a long time and this supply crunch has led to an affordability crisis.”
As part of its new actions, Treasury will provide $100 million over the next three years to finance affordable housing projects. It is also calling on several agencies that help finance housing to bolster their support for new development.
Yellen’s speech was part of a multi-day tour around Minnesota, that includes lunching with CEOs and holding roundtables with state housing officials.
While the president hunkers down at Camp David to prepare for Thursday’s debate, Yellen is among a slew of cabinet members who are making the rounds nationwide in an effort to promote the president’s economic agenda.
Acting Secretary for Housing and Urban Development Adrianne Todman and Transportation Secretary Pete Buttigieg, for example, have been traveling across the country to tout Biden’s infrastructure investments.
The economy has proven to be a major sticking point for Biden among voters.
Driven by pandemic-era supply chain clogs and labor shortages, the record inflation that followed is lingering for consumers who still are feeling squeezed by higher prices. Polls show that many of them blame the president, who has been in office throughout this time.
Housing costs in particular, which make up some of the largest portions of consumer spending, have remained stubbornly high even as other sectors have cooled down.
Biden has tried to punt the responsibility of high housing costs on corporate landlords, accusing them of “rent gouging,” keeping consumer rents artificially high even as their own costs have come down.
“Folks are tired of being played for suckers,” Biden said in March. “And I’m tired of letting them be played for suckers.”
The National Apartment Association, a major landlord lobby, issued a statement earlier in June rejecting Biden’s aggressive campaign rhetoric against landlords.
“Politics has no place in housing and it’s far past time for policymakers to act on housing,” the group wrote in the statement. “Over the coming months, NAA will continue to stand up for housing providers on the campaign trail.”