Michigan has accelerated home construction in recent years, but Governor Gretchen Whitmer says deeper reforms are still needed to make housing more affordable across the state.
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In her final State of the State address, Whitmer pointed to measurable progress since launching a statewide housing strategy in 2022. Michigan has added nearly 87,000 new or rehabilitated housing units — reaching its initial target a year ahead of schedule. Building on that momentum, the state has now raised its goal to 115,000 new units this year.
The urgency is clear. Of Michigan’s 4.67 million housing units, 73.2% are owner-occupied — a rate above the national average — placing pressure on supply in both ownership and rental markets.
Whitmer emphasized that while construction activity has improved, outdated zoning rules and regulatory hurdles continue to limit affordability and density in key areas.
"For too long, however, our laws have made it easy to expand suburbs but hard to build walkable downtowns and main streets or do more with your own property," Whitmer said. "It shouldn't be so hard to build the homes people need in the places where they want to live."
The governor called for pushing forward with zoning reforms and creating a state-level affordable housing tax credit to complement the federal program. Such a credit could unlock additional public and private investment, particularly for income-restricted and workforce housing developments.
Michigan currently earns a “C” on the state-by-state housing affordability report card issued by Realtor.com — reflecting moderate progress but ongoing affordability challenges.
Whitmer also addressed regulatory reform more broadly, urging lawmakers to streamline construction requirements and remove what she described as unnecessary bureaucracy.
"There's still a lot of red tape that gets in the way of shovels hitting dirt," Whitmer said. "Let's make it easier to build in-law suites and multifamily homes. Let's modernize lot sizes, setback rules, and parking requirements. By improving zoning and building codes, we can build more homes quicker, at lower cost."
Michigan joins more than a dozen states considering legislation to loosen zoning restrictions in order to expand housing supply. Supporters, including the Michigan Housing Council and Abundant Housing Michigan, argue that easing restrictions on accessory dwelling units, duplexes, and multifamily projects could expand supply in high-demand communities.
However, the proposals have generated pushback from some local leaders and residents who argue that statewide reforms could infringe on local control. Petition drives and public hearings have reflected concerns about preserving neighborhood character and community planning autonomy.
Whitmer acknowledged those tensions but framed the debate in economic terms, arguing that attracting and retaining young professionals depends on providing diverse housing options in vibrant communities.
Despite record-level housing investments, affordability pressures have intensified amid inflation and rising construction costs. The state has invested heavily in stabilizing roughly 47,000 cost-burdened households, yet the total number of cost-burdened residents has continued to climb.
State officials say they have implemented a regionalized housing strategy to address these challenges. The approach divides efforts among 15 regional housing partnerships, each tasked with tailoring development plans to local needs while aligning with statewide goals.
"We've very much had a regional strategy, with folks on the ground," Michele Wildman, senior vice president of Community Planning & Development Readiness at the Michigan Economic Development Corp., told Realtor.com.
The state has also centralized certain permitting functions under its housing development authority and deployed financing tools such as tax increment financing and brownfield redevelopment funds to spur construction.
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"Many of the problems across communities are the same, even if they're slightly different," Wildman said. "Costs are going up. Reducing costs and removing barriers are important steps forward."
Republican lawmakers criticized Whitmer’s address, arguing that the state has not gone far enough to lower homeownership costs. Some GOP leaders have floated eliminating property taxes and the real estate transfer tax as more aggressive measures to reduce the cost of buying a home.
The debate highlights a broader national conversation about housing supply, zoning reform, and tax policy — issues increasingly shaping gubernatorial agendas and legislative sessions across the country.
As Whitmer concludes her term, housing policy stands as one of her administration’s signature priorities. Whether Michigan can reach its ambitious 115,000-unit goal may depend on how successfully lawmakers navigate the balance between deregulation, local control, and sustained public investment.
Originally reported by Tristan Navera in Realtor.
