A Michigan court has temporarily paused new energy efficiency standards for residential construction after two builders groups argued the rules would raise building costs and make homes less affordable.

The Michigan Court of Claims granted the pause following a challenge by the Home Builders Association of Michigan and the Michigan Manufactured Homes Association. In their complaint, the groups said the Michigan Department of Licensing and Regulatory Affairs (LARA) failed to show the changes would meet cost-effectiveness requirements.

Under state law, any new construction codes must ensure that costs for improvements can be recovered through savings within seven years. The department must also demonstrate that the new rules won’t price qualified buyers out of the market or push the overall cost of principal, interest, taxes, insurance and utilities above what they were under the previous energy code.

While the updated rules — based on the 2021 International Residential Code — were set to take effect Aug. 29, 2025, Court of Claims Judge James Robert Redford signed an order Monday that pauses implementation while the case plays out. LARA also agreed to remove online access to the 2021 Michigan Residential Code Book until the issue is resolved.

In the meantime, builders will continue to follow the 2015 International Residential Code and its corresponding energy provisions

Industry Concerns About Affordability

The builders groups argue that while energy efficiency is important, the updated requirements — which would align Michigan’s residential code with newer national standards — could add thousands of dollars to construction costs. They say this risks putting homeownership out of reach for more Michigan families at a time when housing affordability is already strained by rising interest rates and labor costs.

Environmental Advocates React

Meanwhile, some environmental groups have expressed concern that delaying the updated code will stall progress toward lowering household energy consumption and carbon emissions. They argue newer standards improve insulation, window performance, and HVAC system efficiency, saving homeowners money in the long run while reducing the state’s carbon footprint.

What’s Next

The legal challenge could take months to resolve. Until then, builders can continue using the older 2015 code, which housing advocates say may leave Michigan behind other states adopting the latest energy-saving measures.

Potential Ripple Effects

The case is being watched closely by other states updating their building codes. Some industry analysts say the outcome could set a precedent for how courts weigh upfront construction costs against long-term savings in energy efficiency battles.

Originally reported by Kyle Davidson in Michigan Advance.