Home Builders warn 2021 Michigan Residential Code will raise costs; plan injunction after JCAR quorum fails

At a May 20, 2025 meeting of the Michigan House Subcommittee on Licensing and Regulatory Affairs and Insurance and Financial Services, Dawn Crandall, executive vice president for government relations at the Home Builders Association of Michigan, told members that implementation of the 2021 Michigan Residential Code (MRC) will raise the cost of building homes and that the association intends to seek an injunction to stop the rule from taking effect.

"Michigan truly is in a housing crisis," Crandall said, describing long-term declines in single-family building and current shortages. She told the subcommittee the state needs roughly 119,000 housing units and that the median price of a new single-family home in 2025 is about $430,000, which she said requires an income near $138,000 to qualify.

Crandall said the association objects to the Department of Licensing and Regulatory Affairs' (LARA) revised rulemaking process and to specific 2021 MRC requirements that she said will add cost and complexity. She listed provisions that would become mandatory under the 2021 MRC as promulgated by the department: move from 2-by-4 to 2-by-6 exterior framing, R-60 ceiling insulation, insulated interior ductwork, one-inch exterior insulated sheathing, solar-energy readiness, and expanded requirements for arc-fault protection and unclear sprinkler language. "If we do not — if we're not successful in receiving an injunction, yes. It'll go into effect on August 29," Crandall said about the 2021 code's effective date.

Why it matters: Crandall and the association argued that the changes will increase materials and labor costs at a moment when building permits and the workforce are constrained. She cited national figures that building-material prices rose about 41.6% since the pandemic and that regulation accounts for roughly 24% of the average new-home price in a national survey. Crandall also said Michigan currently builds to the 2015 MRC; she noted the 2015 MRC ran about 847 pages and the 2021 edition about 1,115 pages.

Process concerns and recent steps: Crandall criticized LARA's move to eliminate the advisory-committee model that previously allowed stakeholder deliberation during code promulgation and described the bureau's new timeline as faster but with less stakeholder input. She said the Joint Committee on Administrative Rules did not have a quorum to sustain objections and that, as a result, the 2021 MRC and corresponding Part 10 of the Michigan Uniform Energy Code were sent to the Office of the Great Seal on May 1. Crandall said the Home Builders Association filed a notice of intent to sue LARA on May 1 and that the association expects to seek an injunction the following week.

Questions from members focused on cost drivers and workforce. Crandall described workforce demographics — she said there are about 58,011 individuals holding relevant licenses in Michigan and that the median age of a builder is about 58 — and described the association's workforce efforts through the Skill to Build Michigan Foundation, including student materials and a veterans-targeted booklet.

Committee action: At the start of the hearing Rep. Steele moved to approve the minutes of the May 15, 2025 subcommittee hearing; the committee adopted the minutes by voice vote with no recorded objections. (Motion: "Approve minutes of 05/15/2025 subcommittee hearing." Mover: Rep. Steele; outcome: approved.)

What the association asked for: Crandall asked the committee to urge Governor Gretchen Whitmer to rescind Executive Order 2017-3 and to restore the advisory-committee approach to code promulgation, or, if the governor will not act, to consider legislation to re-establish that stakeholder-driven process for the MRC. She said the association supports energy-efficient homes but wants flexibility and a process that includes builders and other stakeholders.

The hearing record contains technical and policy details about the differences between the 2021 and 2024 model codes, the bureau's amended rulemaking process, and the association's planned legal challenge. The subcommittee did not vote on any code changes during the meeting.