The Biden administration on Tuesday announced it is investing $100 million in affordable housing construction efforts in a bid to resolve the country's affordability crisis.
In a press release, the administration said it will offer grants ranging from $1 million to $7 million to state and local governments, metropolitan planning organizations, and multijurisdictional entities as part of the Pathways to Removing Obstacles to Housing program. All grantees will be able to use the funding to create and carry out housing policy plans and facilitate affordable housing productions.
In addition to building affordable homes, the program will address restrictive land use or regulatory practices, facilitate repairs to existing homes, and cut energy costs.
The program is part of the Biden administration's Housing Supply Action Plan, a larger effort that aims to "increase housing supply, lower housing costs for families, ensure equitable development, and build climate-resilient, sustainable communities."
"This funding is designed to cut red tape, and make sure that we're building more homes, especially affordable homes, with urgency because people need help now," HUD Acting Secretary Adrianne Todman said in the press release.
"The Biden-Harris Administration has made it a priority to reduce housing costs by increasing our nation's housing supply and our partnerships with local communities are critical to achieving this goal," she added.
The US Housing Affordability Crisis
The Biden administration's program comes as the US is experiencing a housing affordability crisis. As of April, the typical American household would need to earn an annual income of $110,871 to comfortably afford a median-priced home of $402,343, per a Bankrate analysis. That is nearly a 50% increase in the last four years.
The required income also increased in the West and Northeast where homes are more priced higher. In California, for instance, the analysis noted that buyers would need to earn between $156,814 and $197,057.
The required income could still climb, especially as the typical starter home in over 200 cities now costs $1 million. Starter homes are defined as those in the lowest third of home values in a given region or area. In comparison, the typical starter home is worth $196,611 nationwide.
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