Remarks by Secretary of the Treasury Janet L. Yellen in Minneapolis, Minnesota

and executive director of the Minneapolis public housing authority I'm proud to be here today um to unveil or to go through our family housing Expansion Project this was a project a labor of love for Minneapolis public housing staff before I start I want to give a shout out to my staff can you put your hand up folks from [Applause] m without these wonderful uh colleagues of mine we wouldn't been able to be here today this was a great project we took 13 uh units offline and we built 84 units we couldn't have done this without uh what we call the four Ps which is the main priorities of the agency preservation we're the largest Housing Authority in the state of Minnesota we're a key infrastructure of the City of Minneapolis we want to preserve what we have production we want to add more units in order to get out of the housing crisis that we're in Partnerships without the Partnerships of the federal government without the Partnerships of our state without the partnership and Leadership of our city um we wouldn't be able to produce what we've produced but the most important P out of the four pce is people people like Trina who just allowed us to visit our home today people on our waiting list the people that we serve we are a people Centric agency so the four Ps was this is the entire four Ps and it wouldn't be we wouldn't have achieved what we have achieved without the leadership and the courage of the mayor of the City of Minneapolis mayor Jacob fry who you know in his term we passed the 2040 comprehensive plan and without the comprehensive plan we wouldn't be able to do what we did today we wouldn't be able to do what we did today without the funding that the City of Minneapolis allowed us to have and the support it gave us so what I want to do is I want to introduce the great mayor of the City of Minneapolis my friend Jacob fry [Applause] well thank you to our incredible leader here of the Minneapolis public housing authority and obdi War Sami he leads with both vision and compassion which is ultimately how you get these projects done and I want to take you back to five six even 10 years ago and so many people would ask how do you get more affordable housing throughout the city and the first answer is that to get more affordable housing you got to allow for it and previously we had a system that was set up that by and large kept all of the affordable housing in just a couple of locations throughout Minneapolis because while it might have been allowed practically speaking it didn't make a lot of sense to dump tons of money into getting just one unit here and another unit over there so what we push for is this 2040 comprehens hensive plan which allowed for a diversity of housing options and therefore A diversity of people throughout Minneapolis uh and then when you supplement it with some incredible subsidy in these Partnerships that we have set up Partnerships with people like our Senator Tina Smith and senator Amy kashar Partnerships from the federal government where we get arpa funding that we can then utilize to bridge the gap between whatever constitutes the market rate and the affordable rate on these projects when you have partnership set up with the incredible staff at the public housing authority and with people that are acting innovatively like like Christian Lawrence and Rise modular that find ways to put these buildings up in an efficient amount of time and also to do it cheaper not cheaper in the sense that the buildings don't look extraordinary because look at this you would not look at these beautiful buildings and say that's affordable housing they're beautiful homes that people like Trina get to live in and they get to rise from that's ultimately what this is all about and you know you get sucked into the day to day of living in a city governing a city working in a city loving a city uh and sometimes when you pick your head up you realize that the work that we are doing here because of these Partnerships it is surpassing most any other place in the whole country we've managed to keep rents down more than almost any City in the entire country we are producing more and more deeply affordable housing every single day because we believe that housing is a right and that people should have a foundation from which they can rise and we pass Landmark policies like the 20 240 comprehensive plan which allows for that diversity of housing options to be in all neighborhoods and adds to that critical Supply this is why you get into government to begin with you have these amazing projects they help extraordinary people and then those amazing people go on to do incredible things hopefully in Minneapolis so you know this particular project or series of projects went along with $5.8 million uh about four million of which came directly from arpa funds and then we attached on uh affordable housing trust funds and a number of of other segments as well to ultimately arrive at this uh uh to bring this to fruition uh but as I said it wouldn't be possible uh without this partnership between the city and the federal government uh and the arpa funding that was so flexible that allowed this project to happen someone who pushed for it was an advocate of it made sure that these projects were Community Centric and people minded is is our great Senator here uh Senator Tina Smith she's been an amazing partner and deserves a lot of credit in ultimately getting great stuff like this done in our city and in our state would you please give a huge round of applause to Senator Tina Smith than n thank you oh thank you oh I've got a handy oopsie got a handy stool here so look how tall I am now it's kind of incredible I think that might be just a little too tall well thank you good afternoon everybody how are you all today you're good that's that's great I want to just um thank everybody who has helped to make this fantastic day um possible um starting with um obdi and the great Folks at Minneapolis housing to Mayor fry uh I want to thank the resident who showed us around her incredible unit just a little bit ago and um just everybody who's here and was also part of a round table discussion we had with secretary um Yellen um a little bit ago it's been a really a really fantastic afternoon secretary Yellen we are just delighted that you are here in Minnesota to see what we're doing to fulfill our mission which is that everybody in our community has a safe decent affordable place to live I really see this as a human right I think that housing is the first thing that people need in order to be healthy in order to take care of their families in order to get an education and take and have a have a job and we know that in this country we still have a steep hill to climb to make sure that this is a reality for everyone the National lowincome Housing Coalition tells us that Nationwide we have a shortage of about 7.3 million affordable places for people to rent in this country so these are working families with kids they are young folks just starting out they are seniors living on a fixed income there are folks that are living with disabilities and the bottom line is that we don't have enough places for people to live and we have a housing Supply crisis and it is a big challenge it is a challenge of equity and fairness and we need to build our way out of this and it's going to take the public sector and the private sector working together to make this happen so here's the good news we are making significant progress and today we are celebrating a great example of that progress thanks to the work of President Biden and vice president Harris thanks to the work that Senator clob Bashar and representative Omar and I did in Congress and thanks to the incredible local Innovation and Leadership of public private Partners here in Minnesota we have this project that we're celebrating today 84 new very affordable apartments in Minneapolis scattered throughout this community the largest number of affordable units that we have built in this community in over 20 years and that's led by Minneapolis Housing Authority in the City of Minneapolis and it is built with state-of-the-art modular construction thanks to an upand cominging Minnesota company rise modular and it is financed with the strong support of the Biden Administration and the laws that Amy and ilhan um and I helped pass so I want to just quickly highlight three things about this project that I think people around the country are paying attention to that are models for our future work and the first is the strong leaders ership in Minneapolis this city as the mayor just mentioned has passed some of the most Progressive zoning reforms in the country it ended single family zoning and it reduced parking requirements for apartment buildings and it was these reforms that allowed these apartments to be scattered throughout the community understanding that this is a strategy to overcome the exclusionary zoning that is the root of racial segregation and racial discrimination around housing in our city and in cities around the country and then what I love about this is how this project respected the dignity and the self-determination of the residents living in Minneapolis public housing by asking them what they needed what they didn't need what they what we needed to make sure we're included in these buildings so it would be the kind of place that they want to live in the second piece I want to draw your attention to that people are watching all over the country is this new kind of construction very high quality modular construct built in a factory by Rise modular so I got a chance to tour this Factory um and meet the workers there in owana last year while they were building this units and it is truly impressive everything is built by Minnesota construction workers inside a factory setting so imagine what that means you don't have to worry about how hot it is or how cold it is workers are safer and in fact the build time is 30 to 50% faster than it would be under traditional Construction and that saves time and it saves money and I know that we're going to be seeing a lot more of this style of construction as we think about how to increase our housing Supply and the third thing about this project that I want to draw your attention to is this strong partnership that we're talking about today led by President Biden and vice president Harris it this project could not have happened it would not have happened without President Biden and his work along with what we did in Congress to help Finance these apartments and at the same time time add solar panels on them so that the energy cost in this building will be reduced for everybody it's almost 20 million dollar in support from federal tax credits it is four million of support thanks to the American Rescue plan act and it is half a million dollars in solar tax credits thanks to the inflation reduction act solar energy that will you will create up to 30% of the energy that the folks living in these buildings will require and as I said help bring their costs down so this is a really great example of what we can accomplish and we have more work to do and that brings me to secretary Yellen as treasury secretary an economist and as a student of the US Labor Market secretary Yellen understands the connection between housing and employment and having a strong economy and she is at the Forefront of President Biden's work to lower costs for Americans especially when it comes to housing secretary Yellen we are so grateful for your leadership and for coming to Minnesota to let us tell you all about this project and to hear more about what President Biden intends to do to help lower costs for Americans especially when it comes to housing thank you very [Applause] much okay well good afternoon everyone I'm so glad to be in Minneapolis with Sen Senor Smith 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 Rising real wages and a bigger share of working age Americans in the workforce than before the pandemic inflation is down almost 2third 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 affordable is the president's top economic priority and we're 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 the shelter inflation will moderate and we see certain positive signs such as the fact that total units under construction remains at a 50-year high but we Face a very significant housing Supply shortfall that has been building for a long time and this Supply crunch has led to an affordability crisis 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's Lead that housing matters is intuitive to all of us it's the backdrop of our day-to-day lives and the foundation for a better economic future quality housing that's affordable supports good health saving families from unsafe situations such as lead exposure it supports education preventing frequent moves that disrupt learning and it supports job possibilities enabling workers to live close to jobs while they'll be the most productive for many Americans housing is a Lynch pin of the American dream and a gateway to the middle class but challenges have been increasing from 2 to 2019 even despite the global financial crisis how housing prices doubled they Rose 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% of the US population the National lowincome Housing Coalition finds that today not one single state has sufficient housing available for lowincome renters the burden is especially great for these lowincome families and for populations that have historically been 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 are impacting a broad swath of working Americans across the country so since his first day in office President Biden has been focused on advancing a housing agenda that addresses the needs of everyday Americans we began with ensuring housing stability during the depths of the pandemic roughly 7 million renter households were behind Ed on rent and there was a very real possibility of a wave of devastating evictions and foreclosures at this crucial moment treasury's programs provided immediate relief to keep people housed it reached over 58,000 households here in Minnesota and we created the first Nationwide infrastructure for eviction prevention since then the Biden Administration has been focused on taking action to build more housing and lower its cost including through implementing our housing Supply action plan and treasury has been leveraging every tool at our disposal we deploy dollars through state and local governments to finance housing construction and provided guidance so that remaining covid funds could be more easily used for Housing Development recipients have allocated $19 billion in treasuries state and local fiscal recovery funds to housing related uses across over 3,000 projects Ramsey County and the City of St Paul collectively budgeted nearly 75 million in recovery funds to increase the supply of Housing and the City of Minneapolis budgeted 4 million for the project we're visiting today those are just two examples treasury also supports the construction of affordable rental housing including this project through the lowincome housing tax credit that's the largest source of financing for affordable housing in this country we put out a rule that will enable the creation of more housing in Rural and more sparsely populated areas and we're looking for ways to further strengthen the credit to make sure the homes it finances remain safe and affordable we've also helped finance housing construction through our Partnerships with community development financial institutions providing historic amounts of funding and other changes to encourage more housing production the cdfi fund helped finance more than 100,000 affordable housing units in 20203 more than 10,000 affordable housing units in Minnesota since 2017 but given the scale of the challenge we must and will continue to do more and I'm excited today to outline several key housing initiatives the treasury is pursuing first I'm announcing a new treasury program administered by the cdfi fund that will provide an additional hundred million over the next three years to finance the financing of affordable [Applause] housing it uses revenues the treasury will be receiving in connection with our investments in community financial institutions through the emergency capital investment program this new program will be primarily focused on increasing the supply of affordable housing we look forward to designing it over the coming months to make sure that we're putting these new funds to their most effective use second earlier this year we worked with the Department of Housing and Urban Development to permanently extend the Federal Financing bank's lowcost lending that helps Finance affordable multifam housing developments we estimated this would help preserve or create 38,000 affordable units over the next decade and I'm now glad to announce that we're exploring a major Improvement to bolster this initiative by bringing greater interest rate predictability to participating state and local Housing Finance agencies we estimate this will lead to thousands of additional housing units in the coming years third treasury is in has been engaging with the federal home loan Banks government sponsored Enterprises that play an important role in the ing Finance system to explore ways they can further fulfill a key aspect of their public Mission and increase their support for affordable housing the federal home loan banks are required by law to devote 10% of their net income to Housing Programs they've already taken a positive first step to voluntarily increase their commitments to 15% but in this time of Crisis we must all do more to support housing investment in line with the federal Housing Finance agency's report and the president's proposal today I call on each of the federal home loan Banks to work to voluntarily direct 20% or more of their net income to support housing programs and to prioritize new construction [Applause] if this level of commitment had been in place over the past five years the federal home loan Banks would have contributed nearly $2 billion dollar more to Housing Programs than was required by the law finally I'm announcing today that the cdfi fund is updating the rule for the capital magnet fund a critical treasury housing program to provide greater flexibility and reduce administrative burden on recipients this update reflects input we've received from many stakeholders who considered this program to be a crucial source of funding and it will allow recipients to focus their resources on impact instead of dealing with red tape [Applause] I look forward to continuing to push forward these actions in the coming months but the federal government cannot address this challenge alone we need Congress to act the president's tax plan would cut taxes for middle and lowincome Americans to put more money in people's pockets on housing specifically the president has called on Congress to provide a tax credit for first time home buyers which would help more than three and a half million families purchase their first home in the next two [Applause] years President Biden is also focused on expanding housing Supply putting forward a plan to build over 2 million homes and supporting legislation like the bipartisan tax bill that would expand the lowincome housing taxes credit and the Senate should pass this [Applause] bill state and local leadership is also crucial and I applaud Minnesota on making the largest single investment in housing in State history a bit more than a year ago and I congratulate the City of Minneapolis on enacting changes and laws that enable more housing construction allowing residents to live near Transit and job centers and making this project possible eliminating needless legal barriers to Housing Development doesn't just affect individuals and communities economists estimate that restrictive residential land use regulations cost our country up to 2% of GDP each year I strongly encourage more state and local governments to take additional AC action to address the housing shortage and I look forward to continuing to make sure the federal government is a strong partner to them so let me end here for now there are many efforts underway I haven't focused on none of the solutions I've mentioned are silver bullets given that Working Families have faced price pressures for decades but the efforts we're making and will continue to make are critical and this project shows that different policies and programs can be strategically leveraged to fuel more housing that's affordable I understand the project is even planning to use inflation reduction Act tax credits to help finance a solar system that's projected to cover nearly 30% of residents electricity consumption so it's a fitting place for us to recommit to advancing the president's top economic priority and bring down cost for American families and to call on Congress and State and local governments to take urgent actions as well so thank you so much to all of you for being here today and for being part of this work