Demand for housing in Michigan has outstripped supply and led to higher prices. The solution to this is simple: Build more. But it is difficult because of government and market obstacles.

And despite massive government subsidies for more apartments, housing construction has barely budged for years. And we don’t build nearly as much as we did even in the 1990s.

The government isn’t particularly good at knowing how much or what types of housing needs to be built. But the market is good at it. It is unfortunate that so many rules and regulations have arisen that make it effectively illegal even to build much of the housing people in Michigan are currently living in.

Here are some ways to change that.

The Mercatus Center has released a menu of proven policy options state lawmakers can use to lower the cost of housing. This includes eliminating parking mandates, making it easier to build starter homes and accessory dwelling units, putting in place better guidelines for zoning, and updating construction standards and building codes.

The American Enterprise Institute also recently released a dashboard with a section on “The Case for Ending the Ban on Starter Homes.” The report estimates that zoning regulations prevented 3.4 million starter homes from being built over the past decade. Many local governments put in place minimum home and minimum lot size regulations that make it difficult or impossible to build smaller, less expensive homes.

“The relationship between lot size, land value, and home affordability [is striking],” the authors note. “Home value-to-income ratios fall dramatically when smaller homes are built on smaller lots in subdivisions on less-expensive land.”

There are signs that demand for buying homes in Michigan is weakening, which may start to reduce prices. But a flourishing state needs a robust housing market. State and local governments in Michigan place a significant financial burden on homeowners. The two policy reports show some ways to lessen that.

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