Fact Check: Do Regulations Contribute to Rising Housing Costs in Michigan?

Michigan’s housing affordability crisis has emerged as a key issue in the 2026 gubernatorial race, with candidates from both parties pointing to regulatory burdens as a primary culprit for the state’s housing challenges. However, a closer examination reveals a more complex picture than campaign rhetoric suggests.

At the recent Northern Michigan Policy Conference in Traverse City, candidates repeatedly highlighted regulatory costs as a barrier to affordable housing development. Democratic Secretary of State Jocelyn Benson claimed it costs $90,000 “before you even put a brick in the ground” in Michigan, while Republican Senate Minority Leader Aric Nesbitt cited a similar figure of $95,000 in regulatory costs per new home.

These figures, however, come from a nationwide study by the National Association of Homebuilders that estimated regulatory costs average $93,870 per home across the United States—not Michigan specifically. Bob Filka, CEO of the Michigan Association of Homebuilders, acknowledged that state-specific figures aren’t available but suggested Michigan’s costs would be comparable.

Housing affordability metrics paint a nuanced picture. According to Zillow, the typical Michigan home cost $249,916 in December, representing a 49% increase since January 2020. While Michigan homes are less expensive than those in Illinois or Wisconsin, they cost more than in Ohio or Indiana. Michigan residents also spend a larger portion of their income on housing compared to some neighboring states.

Construction costs in Michigan, estimated at up to $290 per square foot by Home-Cost.com, are on par with Indiana and lower than in Ohio, Illinois, and Wisconsin. Ryan Coffey, a land use planning educator at Michigan State University Extension, points out that multiple factors beyond regulations influence housing costs, including inflation, land values, labor availability, and local market dynamics.

The housing shortage itself is difficult to quantify precisely. Michigan’s estimated housing deficit ranges from 119,000 units (according to state officials) to 185,000 (per the National Low Income Housing Association). Michigan’s homeownership vacancy rate of 0.7% matches Ohio’s, exceeds Wisconsin’s, but falls below Illinois and Indiana. The state’s rental vacancy rate of 5.7% is the highest among Great Lakes states.

Claims about Michigan’s building timeline disadvantages also require context. While former Attorney General Mike Cox asserted that projects take a year in Michigan compared to 2-3 months in neighboring states, builders across the region report similar construction timeframes. State agencies responsible for building approvals defend their efficiency, with the Department of Licensing and Regulatory Affairs (LARA) noting that 92% of building plan reviews are completed within 30 days after assignment.

Michigan’s building code structure differs only slightly from neighboring states. All five Great Lakes states base their regulations on International Code Council standards, with Michigan actually having fewer regulations than Ohio and Illinois. Michigan currently uses a 2015 version of the residential building code—the oldest among its neighbors—and is caught in litigation over proposed updates.

Local government processes also play a significant role in housing development. Michigan’s 1,856 local governments (excluding school districts) is fewer than all neighboring states except Indiana. Jennifer Rigterink of the Michigan Municipal League pushed back against characterizations of local governments as obstacles, noting that many have streamlined permitting processes to facilitate housing development.

While Michigan has invested significantly in housing, allocating $2 billion in 2024 for production, preservation, and purchase of more than 12,000 housing units, some advocates suggest following models from states like California, which in 2021 effectively overrode local zoning to enable multi-family housing development. Texas and Oregon have implemented similar reforms and are seeing higher construction rates relative to their housing stock.

As Michigan’s 2026 gubernatorial campaign heats up, the debate over housing affordability and regulatory reform will likely continue, with candidates seeking solutions to address the complex interplay of regulations, market forces, and construction challenges facing the state.