The Biden administration on Wednesday announced it is awarding $85 million in grants to help more than 20 cities clear pathways to building new housing and preserving existing homes as part of its efforts to lower housing costs. 

What You Need To Know

  • The Biden administration on Wednesday announced it is awarding $85 million in grants to help more than 20 cities to clear pathways to building new housing and preserving existing homes, part of its bid to address rising housing costs 
  • The funds, part of a program called Pathways to Removing Obstacles to Housing or PRO Housing, will allow local jurisdictions to reduce barriers to building affordable housing, such as a lack of infrastructure, difficult permitting processes and gap financing for projects that reach unexpected cost overruns, administration officials told reporters on a call 
  • The S&P CoreLogic Case-Shiller index released Tuesday found home prices around the country increased 6.3% in April compared with a year earlier; The Case-Shiller 20-City Composite Home Price Index records home prices in March 2024 as 46% higher than in March 2020
  • President Joe Biden laid out a plan in his proposed budget to build over two million homes as well as provide middle-class first-time homebuyers with a tax credit for two years and up to $25,000 in down payment assistance to first-generation homebuyers 

The funds, part of a program called Pathways to Removing Obstacles to Housing, will allow local jurisdictions to reduce barriers to building affordable housing, such as a lack of infrastructure, difficult permitting processes and gap financing for projects that reach unexpected cost overruns, administration officials told reporters on a call. 

Milwaukee, for instance, will use the grants to provide subsidies to builders to turn vacant lots and abandoned buildings into affordable housing, Vice President Kamala Harris told reporters on the call.

Denver, on the other hand, will use its designated funds to give loans to developers to build infrastructure such as power lines on land where new housing can then be built, Harris added. 

“Our announcement today is focused on making sure that homes can be built probably in places where homes could not have been built before,” an official said. 

“Many of you may have heard the term ‘not in my backyard’ or zoning rules or ‘there's too many rules that make it hard to build housing and that makes building housing more expensive,’” the official continued. “Our announcement today is to help clear the path so that housing can be built.”

The $85 million comes from already appropriated funds in the Department of Housing and Urban Development’s 2023 budget. Later this year, officials said, the administration will give out another $100 million from the department’s 2024 budget to address the same issue. 

Although housing often takes a while to build, officials said they expect the money to start making an impact as soon as later this summer as some of the grants will aid in the completion of projects already underway. Recipients, however, have multiple years to spend the dollars, meaning improvements will be made “year-over-year for the next several years,” an official said. 

“Rent is high and homeownership feels out of reach for too many families. One reason for this is that for more than a decade, our housing supply has not kept up with the demand for homes," Acting Secretary of the Department of Housing and Urban Development Adrianne Todman told reporters. "That shortage, along with our aging housing stock and rise in rents has exacerbated the pressure being felt by families.”

The nation has continued to grapple with rising housing costs after the COVID-19 pandemic. The S&P CoreLogic Case-Shiller index released Tuesday found home prices around the country increased 6.3% in April compared with a year earlier. The Case-Shiller 20-City Composite Home Price Index records home prices in March 2024 as 46% higher than in March 2020. 

In Minneapolis on Monday, Treasury Secretary Janet Yellen announced $100 million over the next three years to support financing of affordable housing. 

Harris noted to reporters that President Joe Biden laid out a plan in his proposed budget to build over two million homes as well as provide middle-class first-time homebuyers with a tax credit for two years and up to $25,000 in down payment assistance to first-generation homebuyers. The administration is calling on Congress to pass the proposal.