New analysis points to permitting delays and fees as major contributors to housing shortage and affordability challenges.
By yourNEWS Media Newsroom
The United States is facing a housing shortfall of approximately 10 million homes, according to findings outlined in the newly released 2026 Economic Report of the President, which attributes much of the gap to regulatory barriers that have increased construction costs and slowed development.
The report, issued April 13 by the Council of Economic Advisers, calculated the deficit by comparing current housing output to historical construction trends prior to 2008. It concludes that the slowdown in building activity, combined with rising demand, has contributed to a widening imbalance in the housing market.
According to the analysis, government-imposed costs—including permitting delays, development fees and regulatory mandates—have added what it describes as a six-figure “bureaucrat tax” to the price of constructing a new home. The report identifies stricter regulatory environments, such as those seen in California, as a key factor driving higher housing costs.
Officials said these constraints not only increase home prices but also limit economic mobility and productivity by restricting access to affordable housing. The report contrasts this with states like Texas, where fewer regulatory hurdles have allowed for faster construction and comparatively lower housing costs.
Data cited in the report show that development-related fees average about $29,000 per housing unit in California, compared to less than $1,000 in Texas. In addition, the time required to complete housing projects in California is estimated to be roughly 22 months longer than in Texas.
The 10 million figure exceeds several other recent estimates of the housing gap. The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, previously estimated a shortage of 3.7 million homes in 2024, while Realtor.com projected a gap of just over 4 million units for 2025.
Rick Palacios Jr., director of research at John Burns Research and Consulting, disputed the higher estimate, stating in a post that his firm places the shortage closer to 1 million homes and that the gap is narrowing.
President Donald Trump linked the housing imbalance to immigration policies under the prior administration, writing in a letter accompanying the report that increased demand from illegal immigration contributed to rising housing prices and wage pressures.
“Uncontrolled illegal immigration inflated the price of housing and lowered real wages for Americans—all while burdening taxpayers with hundreds of billions of dollars in benefits paid to these illegal immigrants annually,” Trump wrote.
The administration has prioritized housing affordability as part of its policy agenda. In March, Trump signed an executive order aimed at reducing obstacles to new construction by streamlining permitting processes and limiting regulatory requirements, particularly those tied to environmental reviews.
The report concludes that reducing regulatory burdens could expand housing supply, improve affordability for new buyers and stabilize costs for existing homeowners.
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