Senators introduce plan to expand housing investment

A bipartisan group of lawmakers is leading an effort to increase housing supply through the introduction of a bill that would boost investments in affordable housing — a priority set by the Trump administration.

Senate Banking Committee Chair Tim Scott, R-S.C., and Sen. Lisa Blunt Rochester, D-Del., along with several other senators, introduced the Community Investment and Prosperity Act in the Senate on Thursday.

The bill would raise the statutory cap on public welfare investments for banks, increasing it from 15% to 20%. Lawmakers said in a press release that the change could unlock “billions in capital” for community development projects such as affordable housing, financial education and small businesses.

Senator Scott said updates to “outdated laws” are needed to incentivize public welfare investments, which are currently limited under existing regulations.”Our regulatory framework should encourage investment in affordable housing and community development projects in communities that need it most,” he said in a statement.

“For the first time since 2006, this bill makes commonsense changes to unlock capital and increase investment opportunities that will boost our housing supply, expand financial inclusion, and support small businesses while ensuring the safety of our banking system.”

The last time Congress raised the cap was nearly two decades ago, when it increased the limit from 10% to the current 15%.

Sen. Angela Alsobrooks, D-Md., a co-sponsor of the bill, said the legislation would help address the lack of single-family housing, a challenge that worsened during the pandemic amid low interest rates, rising costs and heightened competition in the housing market.

“Homeownership is one of the surest paths to building wealth,” Alsobrooks said. “By making housing more affordable, we are blazing new pathways for Americans to build generational wealth and provide for their families.”

Another co-sponsor, Sen. Bernie Moreno, R-Ohio, criticized the Federal Reserve, blaming the central bank for its slow pace in lowering interest rates.

“Skyrocketing housing costs and the Federal Reserve’s absurd refusal to lower interest rates have put that dream out of reach for too many,” said Moreno.

The bill aligns with the Trump administration’s focus on increasing the housing supply.

In a memo issued in January 2025, the White House called for action to reduce housing costs and increase the availability of homes. While no major policies have yet been implemented, several ideas have been proposed to address housing scarcity under the current administration.

The Department of Housing and Urban Development, led by Secretary Scott Turner, announced in June that it is prioritizing manufactured housing as a strategy to address the shortage more quickly.

Turner said the department plans to update regulations for HUD’s manufactured housing program, which he said may have previously discouraged lender participation.

In addition to manufactured housing, Turner has proposed opening federally owned land for new development. At a summit in May, he said the administration, in partnership with the Department of the Interior, has identified more than 500 million acres of underutilized federal land as potentially suitable for affordable housing construction.