WASHINGTON, DC – With the nation experiencing a deficit of affordable homes and home prices and rents increasing to historic levels, Senate Democrats are offering a legislative solution to provide tens of billions of dollars to help create millions of new homes for low-income Americans.

U.S. Senators Jack Reed (D-RI) and Tina Smith (D-MN) are teaming up with several colleagues to introduce the Affordable Housing and Homeownership Protection Act (S.3754). This bill would generate up to $50 billion over ten years to help build and preserve approximately 2.9 million affordable housing units nationwide. The bill would be fully paid for through a new tax that disincentives institutional investors from purchasing large numbers of single-family homes.

Driven by a shortage of as many as 6.8 million homes nationwide, homes prices have surged 51 percent and rents 36 percent over the last six years, according to the National Association of Realtors and Zillow. During that same period, large investors exacerbated this shortage by purchasing hundreds of thousands of single-family homes across the U.S., many of which they hold within portfolios as rentals, preventing more families from reaching homeownership. In the first nine months of 2025, around 30 percent of single-family homes on the market were bought by investors, not hardworking households who cannot compete with private equity and other large investors that can make all-cash offers, waive contingencies, and provide additional concessions.

Higher rents and fewer opportunities for homeownership are devastating for millions of families. As housing costs skyrocket, more households are priced out of homeownership, while renters have less to spend on food, clothing, and other everyday necessities.

The Affordable Housing and Homeownership Protection Act would help level the playing field for families by taxing investors who purchase and hold more than 15 single-family homes, with the largest investors paying higher rates.

The Trump White House announced it is “taking steps” to ban large institutional investors from buying single-family homes and issued an executive order directing multiple federal agencies to limit federal support for such purchases. But that action will do next to nothing unless Congress codifies much stronger protections by passing a bill like the Affordable Housing and Homeownership Protection Act, which would specifically address the outsize role institutional investors have in the housing market.

The Affordable Housing and Homeownership Protection Act would raise $51 billion over a decade by taxing investors that purchase large numbers of single-family homes, with revenue split between the Housing Trust Fund (HTF) and Capital Magnet Fund (CMF) to help build and rehab 285,000 rental units for extremely low-income Americans through HTF grants and help finance 2.7 million rental and homeownership units for low-income families via CMF, which leverages other public and private investments.

“The Affordable Housing and Homeownership Protection Act isn’t just a slogan, it’s a solution. This bill would ease our national housing shortage. It would invest directly in the production of new housing and help individual homebuyers afford to buy a place to live, put down roots, and strengthen communities. And it would make it harder for institutional investors to snap up homes at the expense of hardworking American families,” said Senator Reed. “A home is more than a commodity or a profit center, it’s a place to live and a basic necessity. But many families have seen housing costs artificially inflated due to institutional investors treating housing stock like an investment vehicle. Under this bill, Wall Street investors can still buy all the properties they want, but commonsense guardrails would ensure they pay their fair share and it plows that money directly into creating more housing units.”

“Without a safe, affordable place to live, it becomes nearly impossible to hold a job, go to school, or stay healthy,” said Senator Smith. “Our country is facing a housing shortage crisis, with supply falling dramatically behind demand. This bill would hold the corporate investors accountable who take advantage of our country’s housing shortage at the expense of working families, and create millions of desperately needed new, affordable homes in the process.”

In addition to Reed and Smith, the bill is cosponsored by Senators Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Amy Klobuchar (D-WI), Sheldon Whitehouse (D-RI), Andy Kim (D-NJ), Ruben Gallego (D-AZ), Chris Murphy (D-CT), and Elissa Slotkin (D-MI).

The Affordable Housing and Homeownership Protection Act has been endorsed by several leading organizations, including the National Low Income Housing Coalition, National Housing Law Project, National Consumer Law Center (on behalf of its low-income clients), Americans for Financial Reform, and Consumer Action.

“Institutional investors and private equity firms exacerbate our nation’s housing crisis by purchasing rental properties and dramatically raising rents, engaging in predatory behaviors without regard for their impact on people,” said Renee M. Willis, president and CEO of the National Low Income Housing Coalition. “I applaud Senators Reed and Smith for reintroducing the Affordable Housing and Homeownership Protection Act, which would discourage these predatory practices and create additional investments in deeply affordable homes through the national Housing Trust Fund.”

“This bill targets the real problems of limited housing supply and lack of affordability,” said Ruth Susswein, Consumer Action’s director of consumer protection. “Best of all, it requires those who are fueling the housing shortage to help fund the solution for low income consumers.”

“The large investors, hedge funds, and private equity firms that are buying up our country’s most affordable homes are worsening the nation’s unprecedented housing unaffordability crisis. The Affordable Housing and Homeownership Protection Act will require big housing investors to pay their fair share and help invest in much needed affordable housing,” said Caroline Nagy, Associate Director of Housing at Americans for Financial Reform Education Fund.