Michigan homebuilders are preparing a lawsuit against the state over outdated construction codes they claim add around $15,000 to the price of a new home.

“These mandatory requirements will limit house design and needlessly add costs,” Bob Flicka, CEO of the Home Builders Association of Michigan, told Crain’s Detroit Business.

The ordeal revolves around proposed 2021 building codes slated to take effect later this year over the objections of most Michigan homebuilders. Newer codes developed by an international agency came out in 2024, but Michigan’s convoluted process for adopting codes hasn’t yet updated current codes from 2015 to 2021.

Andrew Brisbo, director of the Michigan Department of Licensing and Regulatory Affairs’ Bureau of Construction Codes, testified before the Joint Committee on Administrative Rules last month that state law requires the agency to implement the 2021 codes before it can move to the updated 2024 codes.

HBAM disputes that perspective and argues the delay means homebuilders will be stuck with more rigid energy efficiency requirements than what’s available through the 2024 codes, which are less restrictive in regards to building materials for framing and insulation, according to Crain’s.

Flicka estimates the 2021 codes result in about $15,000 in added expenses to construct a new home than would be necessary under the 2024 codes.

“The 2024 model code uses a point system that allows innovation and better design to determine which products are utilized,” he said. “So long as a builder meets the necessary point totals, a variety of products and innovative designs may be used.”

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The forthcoming lawsuit will highlight areas where the 2021 codes violate other Michigan laws, such as a mandated seven-year payback for energy efficiency. The 2021 codes, according to a report from the U.S. Department of Energy, are based on a 12-year payback.

The situation is playing out as Gov. Gretchen Whitmer is proposing to spend $2 billion to combat “Michigan’s crippling housing shortage,” WSMH reports.

The Michigan State Housing Development Authority told the news site the state is short about 130,000 housing units, which is driving up costs.

“The cost of housing is still very expensive,” MSHDA Executive Director Amy Hovey said. “We’re still seeing the cost of building go up, as well as the cost of rentals.”

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It’s an issue Whitmer pointed to during her most recent State of the State address, and in media appearances across the state since.

“We must … address the core issue of supply,” Whitmer said during her State of the State address. “Right now, we’re short 140,000 homes statewide and the way forward is clear. We gotta build, baby build!”

“Both Texas and Minnesota built more housing and drove costs down,” she said.

But instead of working to cut the costs of new homes by skipping directly to the 2024 codes, which the HBAM contends are 6% to 8% more energy efficient, the Whitmer administration is moving ahead with the outdated and more expensive 2021 codes.

HBAM noted in a Tuesday press release the legislature’s JCAR could have changed the situation, but some Democratic lawmakers on the committee haven’t bothered to show up to meetings to address the problem.

“Ironically, on Earth Day Senate Democrats on JCAR failed to show up for a vote that could have produced a newer, more energy efficient and more flexible set of code rules in our state,” Flicka said in a statement.

“I’m very disappointed that a Governor, who has done much to promote the need for more housing, is now poised to add some $15,000 to the cost of each new home,” he said. “We have a housing affordability crisis and other economic headwinds facing us and … legislators on JCAR refused to ask LARA to change a 2021 set of code rules and replace them with a newer 2024 model code that is better for the environment.

“Let’s be clear,” Flicka said. “The 2021 code rules backed by the Governor stand to benefit manufacturers of insulation and other housing products more than it does homeowners or the environment. It’s a mistake and should be reversed.”

Environmental groups, meanwhile, are arguing otherwise and praising the 2021 codes as an improvement on current codes that will save homeowners cash.

“Michigan and the nation are feeling the dual threats of both rising costs and climate,” Carlee Knott, energy and climate policy manager at the Michigan Environmental Council, said in a statement cited by Crain’s. “As boring as they may sound, Michigan’s new building codes are a huge win for Michigan’s homeowners, workers and the environment.”