Yellen announces new housing fund amid sticky shelter inflation

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 comes 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 June consumer price index found overall inflation stayed flat in May, even while shelter inflation rose 0.4%.

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 will deliver formal remarks about the housing initiatives in Minneapolis later Monday. The speech is part of a tour around Minnesota, where she is lunching with CEOs and holding roundtables with housing officials in the state.

While the president hunkers down at Camp David to prepare for Thursday’s debate, Yellen is among a slew of Biden 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, ever since the race for the White House kicked into high gear.

Driven by pandemic-era supply chain clogs and labor shortages, the record inflation that followed is lingering for consumers, who still feel squeezed by higher prices. Polls show that many of them blame the president who was in office through it all.

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 June statement 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.”