Report: HBA Forecasts Michigan Housing Shortage


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HBA Michigan projects there will be a "severe" housing shortage, barring immediate action at the state and local level.

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The Home Builders Association of Southeastern Michigan (HBA) today announced a report entitled “Housing Challenges Threaten Our Economic Outlook, Where Will 10 Million Michiganders Live?” which details what experts are calling historically low housing inventory levels. The report emphasizes that without action, it will continue to be more difficult for communities to attract necessary housing investments in the future.

“Though the housing industry has experienced modest growth since the end of the recession, the recovery has been slowed significantly due to policies that hamper housing investment, including lengthy regulatory delays and requirements that are raising costs,” says Bob Filka, HBA Michigan’s CEO. “This combined with a severe shortage of skilled workers and lots to build upon means production levels aren’t able to keep up with demand. We hope this report serves as a call-to-action tool for economic developers and policy leaders to address the housing challenges our state faces.”

The report also contains 13 recommendations following a recent series of regional housing summits statewide, where more than 250 people testified regarding the challenges and opportunities affecting residential construction in Michigan. The recommendations are intended to stimulate discussion with local and state government officials, ultimately leading to increased housing investment and economic growth.

At its height, Filka adds Michigan’s residential building industry annually contributed more than $3.3 billion in local and state taxes, generated nearly $10 billion in income, and helped create and sustain more than 153,000 jobs. Today, the industry is less than half that size, though demand for housing and renovation services continues to grow.

The 13-point plan focuses on three main areas, including attracting housing investment, reducing regulatory delays, and attracting people to fill a shortage of skilled workers. A primary recommendation is to have the Michigan State Housing Development Authority (MSHDA) partner with other economic development organizations on a best practices study analyzing how local municipalities manage land development, housing, and renovation approval processes.

The plan also recommends reducing regulatory delays at the local level, and seeks to enhance the powers of the state regarding legal violations. It also calls for state officials to work with local authorities to set clear expectations for timeframes on reviews and evaluations of building projects and the fees and costs associated with them.

“About 25% of the cost of a typical home is now attributed to the cost of government regulations,” adds Filka.  “Now, more than ever, an efficient review and approval process will not only benefit the builder or developer but the government and taxpayers of communities across the state.”

HBA Michigan believes that implementing its plan will alleviate a housing shortage over time, and will serve as a major stimulus for Michigan’s economy. 

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