The Home Builders Association of Michigan warned the House Subcommittee on Licensing and Regulatory Affairs and Insurance and Financial Services on May 20 that implementing the 2021 Michigan Residential Code will increase the cost of building homes and strain the residential workforce.

“Michigan truly is in a housing crisis,” said Dawn Crandall, executive vice president for government relations at the Home Builders Association of Michigan, in testimony to the subcommittee. Crandall outlined trends in permit activity, labor demographics and materials prices, and described specific provisions in the 2021 code she said would raise costs for builders and homebuyers.

Crandall told lawmakers the state needs roughly 119,000 housing units and is currently underproducing; she said Michigan is projecting about 15,728 single‑family permits in 2025, with 4,542 pulled year‑to‑date as of April. She said national building material prices have risen about 41.6% since the pandemic and cited a national study that attributes roughly 24% of new‑home cost to regulation.

On the code itself, Crandall said the 2021 MRC—if adopted by the state—would mandate 2x6 exterior framing rather than 2x4, require R‑60 ceiling insulation, insulated interior ductwork, 1‑inch exterior insulated sheathing, solar energy readiness, and wider use of arc‑fault circuit interrupters. “If we do not receive an injunction, yes. It'll go into effect on August 29,” she said, referring to the department’s rule submission timeline.

Crandall described the state’s prior promulgation process, which used advisory committees composed of stakeholders to review International Code Council model codes and recommend Michigan‑specific changes. She said a recent Bureau of Construction Codes process redesign removed those advisory committees, moving more control inside the department and shortening adoption timelines; she urged restoration of the advisory‑committee process, either through rescinding Executive Order 2017‑3 or by legislation to codify the prior approach.

Crandall said the association filed a notice of intent to sue the Michigan Department of Licensing and Regulatory Affairs (LARA) and expected to seek an injunction to block the 2021 code from taking effect. She urged that the state adopt the 2024 model code instead, which she said uses a point system allowing alternative compliance paths and would be more energy efficient and flexible for innovation.

Committee members pressed Crandall on workforce and rehabilitation of older housing stock. She described HBA training efforts, including the Skills to Build Michigan Foundation, classroom materials for K–12 and veterans, and a 60‑hour prelicense training requirement for builder licensing. She also said many existing homes will enter a major repair or remodel phase, increasing demand for labor and materials.

Crandall acknowledged she was not a code promulgation official and said the Bureau of Construction Codes held public hearings on the rulemaking but that stakeholder testimony time was limited. She urged lawmakers to consider local regulatory impacts and to require local governments to assess housing cost impacts when adopting new land‑use rules.

The subcommittee took no formal action on the MRC during the hearing; at the start of the meeting Rep. Steele moved to approve minutes from the May 15 subcommittee hearing and the committee adopted the minutes with no objections.

The Home Builders Association asked the subcommittee to support either a reversal of Executive Order 2017‑3 or statutory language restoring an advisory‑committee process limited to the Michigan Residential Code, and to consider legislative fixes if the department proceeds with the 2021 code. Crandall said builders support energy efficiency but want stakeholder input and flexibility to avoid what they view as overregulation.