Secretary of the Treasury Janet Yellen speaks to the Economic Club of Chicago luncheon on Jan. 25, 2024 in Chicago, Illinois. Yellen used the address to highlight the state of the U.S. economy. Photo by Scott Olson/Getty Images.

U.S. Treasury Secretary Janet Yellen touted investments in affordable housing and community development on a visit to Minnesota this week, promoting the policies of President Joe Biden as he campaigns for reelection. 

Yellen, the former chair of the Federal Reserve and the nation’s first woman secretary of the Treasury, visited the Neighborhood Development Center in St. Paul with U.S. Sen. Amy Klobuchar, D-Minn., to draw attention to a Treasury program that rewards lenders that invest in underserved communities, called community development financial institutions, or CDFIs. 

The Neighborhood Development Center offers loans and training to small businesses and entrepreneurs in the Twin Cities. Since 2006, the organization has received $11 million in Treasury funding — which the organization matched with private funds — to help businesses get off the ground. 

In her remarks, Yellen said she is working with other agencies to get more money out the door — demand for the CDFI Fund programs are three to five times higher than the available funds, she said.

On Monday, Yellen announced a new Treasury program — part of the CDFI Fund — that will pay out $100 million over three years to support the financing of new affordable housing projects. The funding is a drop in the bucket compared to the need; in Minnesota alone, around $3.9 billion was available for affordable housing programs from 2022 to 2023, including around $500 million in COVID-19 recovery funding.

But the federal dollars are meant to leverage and encourage private investment in new affordable housing construction. 

Yellen also promised a streamlining of the application process for CDFI funds and encouraged banks to devote more money to housing programs.

She attributed the country’s strong economy and recovery from the shock of the COVID-19 pandemic to efforts by Biden, who is neck-and-neck with presumptive Republican nominee Donald Trump in presidential polls.

“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,” Yellen said. 

The National Low Income Housing Coalition estimates the U.S. needs to build more than 7 million housing units for extremely low-income renters in order to alleviate the pressure of rising housing costs on the country’s poorest households.

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