As Prepared for Delivery
Good afternoon. I’m glad to be in Minnesota with Senator Smith today to visit a project that serves as an example of federal, state, and local efforts working in concert to increase the supply of housing and lower its cost.
Thanks to President Biden’s economic plan, the American economy is strong and resilient, with robust economic growth in recent quarters. The labor market is remarkably healthy, with low unemployment rates, rising real wages, and a bigger share of working-age Americans in the workforce than before the pandemic.
Inflation is also down almost two-thirds from its peak. But President Biden and I know that prices for key household expenses like health care, energy, and housing are still too high, in large part due to challenges that have been mounting over decades. 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.
On health care, our actions include capping the cost of insulin for seniors; enabling Medicare to negotiate drug prices for key prescription drugs; requiring dozens of pharmaceutical companies to pay for raising prices faster than inflation; and cutting health insurance premiums for millions of Americans.
On energy, we used the Strategic Petroleum Reserve and put in place a price cap on Russian oil to help keep global energy markets well-supplied and costs lower than they could have been. The Inflation Reduction Act is helping American families make energy-efficient improvements to bring down energy bills right away.
On housing, I expect that shelter inflation will moderate, and we see certain positive signs such as the fact that total units under construction remain at a 50-year high. But we face a very significant housing supply shortfall that has been building for a long time. This supply crunch has led to an affordability crunch.
Here today, I will focus on how the federal government, along with state and local leaders, acted quickly during the pandemic and is now doing everything we can to increase housing supply to lower costs for families across the United States. As we look ahead, we also need Congress to act and more state and local governments to follow Minnesota’s and Minneapolis’ lead.
The Longstanding Housing Challenge
That housing matters is intuitive to many of us. It’s the backdrop of our day-to-day lives and the foundation for a better economic future. Quality housing that is affordable supports good health by saving families from unsafe situations such as lead exposure. It supports education by preventing frequent moves that disrupt learning. And it supports job possibilities by enabling workers to live close to jobs where they’ll be most productive. For many Americans, housing is a linchpin of the American Dream and a gateway to the middle class.
But challenges have been increasing. From 2000 to 2019—even despite the Global Financial Crisis—housing prices doubled, rising faster than median incomes. The challenges are not confined to one part of the country. Recent Treasury analysis shows that from 2000 to 2020 median rents increased by more than median incomes in counties covering 97 percent of the U.S. population. The National Low Income Housing Coalition finds that today not a single state has sufficient housing available for low-income renters.
The burden is especially great for these low-income families and populations historically locked out of economic opportunity. Here in Minnesota Black households are six times more likely than white households to be precariously housed. But high housing costs impact a broad swath of working Americans across the country.
Biden Administration Actions
Since his first day in office President Biden has focused on advancing a housing agenda addressing everyday Americans' needs.
We began by ensuring housing stability during the depths of the pandemic when roughly seven million renter households were behind on rent facing potential evictions or foreclosures. At this crucial moment Treasury’s programs provided immediate relief keeping people housed reaching over 58 thousand households here in Minnesota while creating nationwide infrastructure for eviction prevention.
Since then we've focused on building more housing lowering its cost through our Housing Supply Action Plan leveraging every tool at our disposal deploying dollars via state/local governments financing construction providing guidance so remaining COVID funds could be used easily developing new projects allocating $19 billion across over three thousand projects such as Ramsey County City St Paul collectively budgeting nearly $75 million Recovery Funds increasing supply City Minneapolis budgeting $4 million today's visit example among others supported construction affordable rental units via Low-Income Housing Tax Credit largest financing source putting out rules enabling rural sparsely populated areas looking ways strengthen credit ensuring homes financed remain safe affordable partnerships Community Development Financial Institutions historic funding changes encouraging production CDFI Fund financing more than hundred thousand units last year ten thousand since '17 given scale challenge must continue doing excited outline initiatives pursuing new program administered providing additional $100 million next three years supporting financing revenues receiving investments community institutions Emergency Capital Investment Program primarily focusing increasing supply designing months putting funds effective use earlier worked Department HUD permanently extending Federal Financing Bank low-cost lending estimating preserving creating thirty-eight thousand units decade exploring improvement bringing interest rate predictability participating agencies estimating thousands additional coming years engaging Federal Home Loan Banks exploring fulfilling public mission increasing support required law devoting ten percent income already taken positive step voluntarily fifteen calling twenty percent prioritizing new construction five years contributing nearly two billion critical updating rule Capital Magnet Fund greater flexibility reducing administrative burden reflecting input stakeholders considering crucial funding allowing focusing resources impact instead red tape
Call To Action
Federal government cannot address challenge alone needing Congress acting tax plan cutting taxes middle-low-income pockets specifically called providing credit first-time homebuyers helping over three-and-a-half million purchasing next two years expanding supply proposing building over two million supporting legislation bipartisan expanding Low-Income Tax Credit Senate passing bill State Local leadership crucial applauding largest single investment history congratulating enacting laws enabling near transit centers eliminating needless barriers affecting individuals communities economists restrictive regulations costing GDP strongly encouraging taking action addressing shortage continuing ensuring strong partner ending mentioning underway focusing solutions silver bullets given facing pressures decades making critical showing policies programs strategically leveraged fueling affordable planning using credits financing solar system projecting covering electricity fitting recommitting advancing priority bringing down costs calling urgent actions thank you being here being part work
