S. 3754: Affordable Housing and Homeownership Protection Act of 2026

This bill, known as the Affordable Housing and Homeownership Protection Act of 2026, seeks to address concerns related to housing affordability and the impact of large investors on the single-family housing market. Here is a summary of its main provisions:

Tax on Investor Purchases

The bill introduces a tax on certain large investors who purchase single-family homes. The tax is determined based on the number of homes the investor owns:

• 1% tax for medium-sized investors (owning 16 to 25 homes)
• 3% tax for large investors (owning 26 to 100 homes)
• 5% tax for giant investors (owning more than 100 homes)

This tax is imposed on each covered investor based on the purchase price of the single-family homes they acquire in a given taxable year.

Definition of Covered Investors

A "covered investor" is defined as anyone who falls into one of the above categories, excluding specific entities that focus on affordable housing or similar missions, such as:

• Non-profit organizations focused on affordable housing
• State or local governments
• Public housing authorities
• Land banks
• Community land trusts

Reporting Requirements

Covered investors will be required to report the following information when filing their taxes:

• The total number of single-family homes they own by the end of the taxable year
• The total number of single-family homes they purchased during the taxable year

Allocation of Tax Revenue

The revenue generated from this tax will be allocated as follows:

• 65% to the Secretary of Housing and Urban Development for the Housing Trust Fund, which supports affordable housing initiatives.
• 35% to the Capital Magnet Fund, which provides grants for affordable housing and economic development.

Effective Date

The provisions of this bill will take effect for taxable years beginning after December 31, 2025.

New Construction Exemption

New single-family homes constructed by the taxpayer will not be subject to this tax unless they replace a prior single-family home on the same site.

Aggregation Rules

There are rules to ensure that investors who are part of a larger entity or group are treated as a single covered investor for the purposes of this tax.

Exceptions

The bill outlines specific exceptions for individual homeowners who purchase a primary residence, differentiating them from investment purchases covered by the tax.

Relevant Companies

• AMZN - Amazon could be indirectly affected due to the impact of this legislation on housing availability in locations where they have large campuses.
• INVH - Invitation Homes, a significant player in the single-family rental market, may face increased costs due to the tax impacting their investment strategies.
• EXR - Extra Space Storage might see changes in the rental market dynamics as housing prices fluctuate due to investor purchases.