Despite having significant economic capacities, Lorestan Province has always faced an unemployment rate higher than the national average and is considered one of the provinces sending immigrants in the country. Considering the labor-oriented nature of the housing sector and its potential capacity to create employment, this study examines the effect of investment in the housing sector on employment in Lorestan Province during the period 2000 to 2025 using the autoregressive distribution lag (ARDL) model. The results of the model show that, contrary to theoretical expectations in the short term, investment in the housing sector has had a negative and significant effect on employment in Lorestan Province, considering the index of the number of building permits issued. This result can be related to the specific conditions of the housing market and the economic structure of the province; factors that have caused the potential employment generation capacity of the housing sector not to be fully converted into actual employment. Therefore, given the conditions of the province, realizing these capacities requires identifying and removing structural and executive obstacles to investment in this sector; obstacles that, without their removal, any policymaking in the field of housing will not be effective and the gap between the current and desired situation will remain.