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Biden administration awards $85 million to ease affordable housing development

Published 06/26/2024, 05:03 AM
Updated 06/26/2024, 05:15 AM
© Reuters. FILE PHOTO: A house under construction is seen in Los Angeles, California, U.S., June 22, 2022. REUTERS/Lucy Nicholson/File Photo

By David Lawder

WASHINGTON (Reuters) - The Biden administration on Wednesday announced the award of $85 million in housing funds to 21 state and local governments for a new program aimed at helping them remove barriers to the development and preservation of more affordable housing units.

Vice President Kamala Harris and Department of Housing and Urban Development Acting Secretary Adrianne Todman said the awards from HUD's initial Pathways to Removing Obstacles (PRO) to Housing program would help update state and local housing plans, revise land use policies and streamline the permitting process for new developments.

HUD's PRO Housing program was created in the fiscal 2023 appropriations bill and the awards were timed with an administration push this week to show that President Joe Biden is taking action to address high housing costs that have become a major concern for younger voters.

A chronic shortage of housing is continuing to drive up rentals and lingering consumer price inflation, contributing to a delay in Federal Reserve interest rate cuts.

"This investment is part of a larger strategy to lower rents and help more Americans buy a home," Harris told reporters in announcing the grants. "President Biden and I have 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 diverted to a new affordable housing financing fund.

The awards include a wide swathe 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 said a $2.1 million award to Milwaukee would help the city provide subsidies to builders to help them more easily develop vacant lots and abandoned buildings. A $4.5 million grant to Denver would help provide low cost loans to housing developers to make connections to utilities.

© Reuters. FILE PHOTO: A house under construction is seen in Los Angeles, California, U.S., June 22, 2022. REUTERS/Lucy Nicholson/File Photo

More than 175 communities had applied for the funds, and Harris said the Biden administration will release another $100 million worth of grants later this summer. Biden has requested another $100 million as part of his proposed budget for the 2025 fiscal year, which starts on Oct. 1.

Harris and Yellen also this week called on Congress to pass Biden's proposed $10,000 tax credit for first-time home buyers and a $25,000 equity grant for first-generation home buyers in disadvantaged families. The proposals have languished in the Republican-controlled House of Representatives.

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