Biden administration provides $85 million to facilitate affordable housing development

By David Lawder

WASHINGTON (Reuters) – The Biden administration on Wednesday announced it was awarding $85 million in housing funding to 21 state and local governments for a new program aimed at helping them remove barriers to developing and preserving more affordable housing units .

Vice President Kamala Harris and Department of Housing and Urban Development Acting Secretary Adrianne Todman said awards from HUD’s initial Pathways to Removing Obstacles (PRO) to Housing program would help update state and local housing plans, review 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 a government push this week to show that President Joe Biden is taking steps to address the high housing costs that have become a major concern for younger voters.

Chronic housing shortages continue to drive up rents and persistent consumer price inflation, contributing to a delay in Federal Reserve interest rate cuts.

“This investment is part of a broader strategy to lower rents and help more Americans buy a home,” Harris told reporters when 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 proceeds from COVID-era community loan investments would be diverted to a new affordable housing finance fund.

Awards include 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 said a $2.1 million award to Milwaukee would help the city provide subsidies to developers to help them develop vacant land and abandoned buildings more easily. A $4.5 million grant to Denver would help provide low-cost loans to real estate developers to make utility connections.

More than 175 communities have applied for the funds, and Harris said the Biden administration will release another $100 million in grants later this summer. Biden requested another $100 million as part of his budget proposal for fiscal year 2025, which begins Oct. 1.

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

(Reporting by David Lawder; Editing by Miral Fahmy)