Despite what you may hear from your favorite conservative pundit, the largest driver of out-of-control housing prices is not illegal immigration. As usual, the culprit remains the more complex, less politically appealing issue: government regulation.

This time, however, the cost is not merely theoretical. According to data analyzed by the National Association of Home Builders, regulations imposed by federal, state, and local governments account for roughly 26.4 percent of the price of an average new single-family home, about $131,734 on a home selling for $499,500. This compared to the just over six percent attributable to illegal immigration.

The burden, however, is not limited to higher costs. NAHB also found that 94.2 percent of developers said regulatory compliance also causes significant delays during the development process, averaging roughly seven months and compounding the supply problem which heavily trails behind demand.

The problem is government bureaucracy: duplicative paperwork, needlessly long approval and permitting processes, misplaced files, endless compliance checks, poor communication across departments, disorganized data and personnel, and a persistent lack of transparency. In other words, the usual operation taxpayers have come to expect.

But according to the Cicero Institute, artificial intelligence could give politicians a path towards addressing that dysfunction.

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While reducing the sheer volume of government regulation should remain the long-term goal, the Cicero Institute offers a more immediate proposition: make the existing bureaucracy actually work.

The institute argues that AI could help governments streamline routine functions, reduce administrative burdens, improve service delivery, monitor agency performance, and identify waste and unnecessary red tape, all while making public agencies more accountable to the people who pay for them. Many critics of AI understandably worry that it will displace workers or automate tasks once performed by people. But in an organization defined by inefficiency and making things more difficult and more expensive for the private sector, that may be the point. 

AI could also reduce government’s reliance on living bureaucrats for routine administrative work, reducing government payrolls, lowering costs and giving agencies an opportunity to return more money to taxpayers, or at least less reason to insist that every government failure demands higher taxes. 

It could even make regulation less of an indistinct, catch-all villain. By making permitting, compliance, recordkeeping, and communication between agencies faster and more transparent, AI could expose the specific rules, and bottlenecks driving delays and higher costs. Bad regulations would not vanish overnight, of course, but they would have fewer places to hide.

Americans should not accept an inefficient bureaucracy simply because reforming it is difficult. 

Reducing unnecessary regulation remains essential, but the integration of AI offers a real path forward. For ordinary Americans, that means the housing debate does not have to end with frustration over an abstract, immovable problem called “government regulation.” If government insists on retaining the power to regulate, fine, but taxpayers should insist that it exercise that power transparently and efficiently. That reduces the need to pay an ever-growing class of bureaucrats to make housing more expensive and the process of building it less functional.