Michigan among the worst in the country for government's burden on homeownership

About 8 million people move across state lines every year, and the cost of living matters to where they end up. Michigan, which has below-average population growth, imposes above-average costs on homebuyers, according to new research.

“Burdens & Buyers: A comparison of state burdens on homeownership,” a report by Robert Aery of the Hern Policy Institute, finds that Michigan’s policies increase the costs of owning a home more than the national average. Michigan ranks 38th among the states, with the No. 1 position reserved for the state with the least burdens. Illinois, in the 39th position, was the only Midwestern state to rank lower than Michigan. Michigan’s neighbors on its southern border scored better, with Indiana ranked in the eighth position and Ohio in the 24th. Wisconsin stood at 31st.

“In recent years, Americans have experienced rising home prices and strained family budgets. One contributor to homeownership costs is government burdens, such as taxes and regulations,” the author noted. “This paper increases the understanding of homeowner cost drivers within states by providing a useful tool for comparing state policies that impact homeownership.”

Many factors affect the cost of owning or buying a home, but the report focused on those driven by state and local government economic policy. These factors include zoning restrictiveness, the difficulty of getting permits, property taxes and transfer costs. Michigan scored poorly on all measures.

The five states where the government places the lowest burdens on homeowners or prospective buyers are Louisiana, Idaho, Arkansas, West Virginia and Tennessee. The states that create the most burdens are New York, Vermont, Connecticut, New Hampshire and New Jersey, with the latter having the most burdens.

The report suggests lowering property taxes, reducing transfer taxes, making zoning more flexible and speeding up permitting. Michigan lawmakers have introduced a variety of legislative proposals along these lines.

House Speaker Matt Hall has proposed cuts to property taxes and transfer costs. That legislation passed the state House but has been in a Senate committee since June. And a bipartisan package in the state House would speed up permitting and lessen zoning regulations.