Listen to the article
Michigan’s Housing Market Faces Regulatory Scrutiny as Affordability Concerns Mount
Housing regulations and their impact on affordability have emerged as a key issue in Michigan’s 2026 gubernatorial race, with candidates from both parties highlighting regulatory burdens as a major obstacle to affordable housing development.
At the recent Northern Michigan Policy Conference in Traverse City, candidates cited steep regulatory costs as a significant factor driving housing prices upward. Democratic Secretary of State Jocelyn Benson claimed it costs about $90,000 to build a house in Michigan “before you even put a brick in the ground,” while Republican Senate Minority Leader Aric Nesbitt suggested “regulatory red tape” adds approximately $95,000 to new home costs.
However, these figures appear to come from a national study by the National Association of Homebuilders rather than Michigan-specific data. Bob Filka, CEO of the Michigan Association of Homebuilders, acknowledged that precise state figures aren’t available, though he estimates Michigan’s costs are likely similar to the national average of $93,870 per home.
The typical Michigan home cost $249,916 in December, according to Zillow data, reflecting a 49% increase since January 2020. While Michigan’s housing prices are higher than those in Ohio and Indiana, they remain below Illinois and Wisconsin levels. Construction costs in Michigan, estimated at up to $290 per square foot by Home-Cost.com, match Indiana’s rates and are more competitive than those in Ohio, Illinois, and Wisconsin.
Ryan Coffey, a land use planning educator at Michigan State University Extension, notes that numerous factors influence homebuilding costs, including “inflation, land and labor costs, the availability of contractors, and local supply and demand.”
Michigan’s housing shortage estimates vary widely. State officials suggest a need for 119,000 new housing units, while the National Low Income Housing Association places the figure closer to 185,000. The state’s homeownership vacancy rate stands at 0.7%, comparable to Ohio but slightly lower than Illinois or Indiana. Michigan’s 5.7% rental vacancy rate is the highest among Great Lakes states.
Census data reveals Michigan is building fewer homes as a share of total housing stock than all neighboring Great Lakes states except Illinois. Despite claims by gubernatorial candidate Mike Cox that building homes takes “a year here” compared to “two to three months in Ohio or Indiana,” industry professionals report similar build times across these states.
The Michigan Department of Licensing and Regulatory Affairs (LARA) defends its efficiency, stating that 92% of building plan reviews are completed within 30 days after assignment. Similarly, the Department of Environment, Great Lakes, and Energy typically processes permits in two-thirds of the time allowed by statute.
Michigan currently operates under the 2015 version of the residential building code—the oldest among Great Lakes states—which contains fewer energy efficiency requirements than other states. A proposed update to the 2021 version has been challenged by the state homebuilders association, which argues its energy efficiency requirements would increase costs.
The Michigan Municipal League (MML) has proposed the MI Home Program, which would provide grants to local governments that update zoning regulations and support developers in bridging the gap between construction costs and affordability. Jennifer Rigterink, assistant director of state and federal affairs at the MML, defends local governments against criticism, noting that many have already streamlined permitting processes and reduced regulatory burdens.
Other states have taken more aggressive approaches to housing policy. California passed a law in 2021 allowing multi-family housing to be built regardless of local zoning restrictions. Texas and Oregon have implemented similar zoning reforms, with Texas building far more housing as a share of total stock than any Great Lakes state.
Michigan has primarily addressed the issue through financial investment, including $2 billion spent in 2024 on “the production, preservation, or purchase of more than 12,000 housing units,” according to the Michigan State Housing Development Authority.
As housing affordability continues to shape Michigan’s political landscape, the debate over regulatory reform versus financial investment remains a central campaign issue heading into the 2026 gubernatorial election.
Fact Checker
Verify the accuracy of this article using The Disinformation Commission analysis and real-time sources.
6 Comments
The lack of precise state-level data on the regulatory cost impacts is a bit frustrating. Hopefully more research can be done to quantify the Michigan-specific situation and inform policy decisions. Finding the right balance between sensible regulations and housing affordability is crucial.
It’s interesting that the cited figures seem to come from a national study rather than Michigan-specific data. While that provides some context, localized analysis would be more helpful in understanding the dynamics at play in the state. This is certainly an issue worth digging into further.
The housing affordability challenge is a complex one with many factors at play. Regulatory costs are certainly an important consideration, but there may be other supply, demand, and policy levers that also need to be examined. A holistic, data-driven approach will be key to finding solutions.
Interesting to see the debate around housing regulations and their impact on affordability in Michigan. Seems like a complex issue with valid points on both sides. It would be helpful to have more state-specific data to really understand the local dynamics.
This is a timely discussion as the 2026 Michigan gubernatorial race heats up. Candidates from both parties highlighting regulatory burdens as a factor in rising housing costs suggests it could be an important campaign issue. I’ll be curious to see how the debate evolves.
Housing affordability is such a crucial issue. The $90,000-$95,000 regulatory costs per home sound quite significant. I wonder if there are ways to streamline the permitting process or adjust certain rules to reduce the burden on builders and home buyers.