A new Reason Foundation study is shedding some light on the housing affordability crisis at the center of America’s concerns over affordability.
The analysis examined U.S. Census Bureau Building Permits Survey data and the Zillow Observed Rent Index across the country’s 100 largest metropolitan areas. The 25 metro areas with the smallest rent increases had the highest rates of housing permits per 1,000 residents. Meanwhile, those with the lowest permitting rates saw the largest rent increases. The findings add weight to the long-standing explanation for America’s housing affordability problem: a shortage of supply.
A 🧵 on housing construction and rent data. Across the 100 largest U.S. metro areas, the 25 metros that permitted the most new homes from Jan 2024 through Sept 2026 saw rents rise a median 3.2%, while those that permitted the fewest saw rests rise 13.1%! Austin, with the sixth-most permits per resident, saw rents fall 6.6%. San Francisco, among the lowest permitters, had the biggest increase in rents at 19.7%. 1/3 @ReasonFdn
— Adrian Moore (@reasonpolicy) November 10, 2026
From January 2024 to September 2026, the 25 metro areas with the highest rates of new housing permits issued roughly four times as many permits per 1,000 residents as the bottom 25. The high-permitting group saw a median rent increase of 3.2 percent, compared with 13.1 percent in the low-permitting group.
Dallas, Houston, and Phoenix issued the most permits per 1,000 residents. Rents fell by 0.3 percent in both Dallas and Phoenix, while Houston saw an increase of just 1.9 percent. By contrast, Los Angeles, Chicago, and Philadelphia, the metro areas with the lowest permitting rates, saw rents rise by 6.2 percent, 15.9 percent, and 10.3 percent, respectively.
High rate of permitting = flat rents. Low rate of permitting = rising rents. 2/3 https://t.co/86ADwBvYRC
— Adrian Moore (@reasonpolicy) November 10, 2026
Most interestingly, even in metro areas with high permitting rates, an influx of residents from more expensive cities as a result of the COVID-19 pandemic has kept upward pressure on rents. But as construction has continued and more homes have become available, rent growth has largely leveled off.
During the pandemic people moved from low building cities to fast building ones, causing rents to rise in the latter, but continued building has flattened those rents while low building cities still see rising rents. 3/3 @graphgoesup @MariiFTrujillo https://t.co/OO6RjI6sCb
— Adrian Moore (@reasonpolicy) November 10, 2026
For those who insist that deporting illegal aliens should take priority over increasing housing supply, there are a few numbers to contend with. Dallas, Phoenix, and Houston lead in housing permitting, yet their respective counties ranked fifth, eighth, and second nationally in illegal alien population, according to 2023 Migration Policy Institute data.
So why have rents fallen in Dallas and Phoenix and barely increased in Houston despite their large illegal alien populations? Because supply-side economics works.
Deporting 20 million people is also a tall order for an administration that, by its own numbers, has managed just 10 percent of that in two years, and now faces the prospect of Democratic control of Congress for the next two. Even if it succeeded, deportations would not fix the barriers to building more homes. Without more construction, demand will outstrip supply again within a matter of years, putting us back at square one.
So which is more practical: making Americans wait for cheaper rent until the administration delivers on an enormous deportation promise, or building enough homes that housing affordability doesn’t depend on it?
We can do both. But don’t kid yourself into thinking Republicans’ new favorite policy in deportations will solve a housing shortage without more housing.