By David Lawder

WASHINGTON, (Reuters) – Wally Adeyemo, Deputy U.S. Treasury Secretary called Monday on the state and local governments of America to increase their share of a $350 million COVID-19 relief account to alleviate a serious shortage in affordable housing.

Adeyemo made a strong case for his rights during an appearance in Los Angeles. He was there to discuss the plans of California officials to spend $7.4 Billion from State and Local Fiscal Recovery Funds on housing.

It is the majority of the $11.7billion that has been budgeted so far for housing by 570 states and local governments out of their recovery funds. This was approved as part of President Joe Biden’s $1.9 Trillion American Rescue Plan Act.

Adeyemo stated to Reuters that addressing the lack of affordable housing is a key long-term goal for many counties and cities as they recover from the COVID-19 pandemic.

Adeyemo explained that the nation needs more housing – single and multi-family. Adeyemo also stated in an interview, “We need to build more houses in this country.”

His visit to Compton will be his first to a California community housing agency. He said that he would call upon other states and local governments in California to emulate California in allocating more ARP funds for housing.

The Treasury announced that California will invest $1.75 Billion in capital development to build “shovel ready” housing developments. It also plans to preserve existing affordable housing which is in dire need of major repairs, or could be converted into market-rate housing. This state is also the largest in population, and plans to rehab vacant buildings, apartments, and other structures, specifically designed for those who face homelessness.

Treasury’s $350 billion state and local funds for recovery have provided many communities with an unprecedented infusion of money. It is now the Biden Administration’s most important social policy tool, as well as being a larger plan to spend on climate and social issues.

The mortgage finance giant is a great resource for research Freddie Mac The US housing shortage reached 3.8 million units by 2020 according to the OTC. This is 52% more than 2018. This was due to slow entry-level home construction following the 2008-2009 financial crises and increasing demand from the large, millennial-age generation that is about to buy its first home.

Adeyemo indicated that he was meeting with Los Angeles County officials to get a better understanding of their needs in order for Treasury to provide maximum flexibility regarding the use of funds to support housing development.

ARP funds are able to help finance many projects by providing the “last dollars” in investments, along with bank loans, private-sector funds and incentives.