Changes to the Land Division Act Likely to be Adopted
Earlier this year, on February 12, 2025, House Bill 4081 was introduced, which if adopted, would result in notable changes to the rules for division of parcels under the Land Division Act, Act 288 of 1967, as amended (the “LDA”). First, House Bill 4081 would increase the number of property divisions allowed under Section 108 of the LDA for the first ten acres of the parent parcel. Second, it would allow local governments to adopt an ordinance to allow a larger number of divisions than Section 108 of the LDA. The Michigan House of Representatives passed House Bill 4081 on April 22, 2025. House Bill 4081 has moved out of the Senate committee and is expected to be passed by the Senate this month. If signed by Governor Whitmer (as expected), the changes would go into effect one year after the Governor’s approval. This article discusses what will change and what will not change when the amendment goes into effect.
Change in Number of Allowed Divisions for the First 10 Acres of a Parent Parcel
Section 108 of the LDA limits the number of divisions that are allowed for a single “parent parcel.” A “parent parcel” is a parcel lawfully in existence as of March 31, 1997. The reason why March 31, 1997 is used is because that is the date when major changes to the process to approve land divisions went into effect, under Public Act 591 of 1996.
Section 108 of the LDA provides a formula to determine how many resulting parcels may be divided out of a parent parcel. Currently, the maximum number of resulting parcels that may be created out of a parent parcel measuring at least 10 acres, but less than 20 acres, is 4. Provided that House Bill 4081 becomes law, the maximum number of resulting parcels that could be created in this same situation would be increased to ten – more than doubling division rights.
Option for Local Governments to Allow More Divisions
House Bill 4081 would also allow local governments to adopt ordinances that allow more divisions than the maximum allowed under Section 108 of the LDA. For example, a local government could adopt an ordinance allowing the first 10 acres of a parent parcel to be divided into 12 or 20 resulting parcels, or some other number greater than 10 resulting parcels. A local ordinance could also change the number of divisions allowed after the first ten acres.
Impact on Local Governments
The intent of these changes is to promote affordable housing, upon the theory that homes on smaller lot sizes will be more affordable. However, that goal will not necessarily be realized because, as discussed below, local governments would still retain their authority to establish minimum lot sizes through their zoning or other regulatory authority.
Section 109 of the LDA requires each resulting parcel after a division to comply with the minimum lot width and minimum lot area requirements in the local government’s applicable land-use ordinances, and House Bill 4081 is not going to change those requirements. For example, if a local zoning ordinance requires a minimum lot area of two acres in a certain zoning district, the local government would not be required to approve a proposed division of a property in that district which would result in one or more lots measuring less than two acres in area.
Further, it is important to remember that approval of a division is not land use approval. The land division process determines only whether a parcel may be divided, not whether it can be used for a certain purpose. This is made clear by Section 109(6) of the LDA, which provides that approval of a division is not a determination that the resulting parcels comply with other local ordinances and regulations. Expanding on this same concept, Section 109a of the LDA also specifically provides that a building permit shall not be issued for a parcel that is less than one acre in area unless it is served by public water or a health department-approved on-site water supply, and by public sewer or a health department-approved on-site sewage disposal. None of this is expected to change if House Bill 4081 becomes law.
Perhaps one of the more significant changes that local governments could experience under the new law is to receive more land division applications that seek to establish smaller residential developments (e.g., up to ten lots on a single parent parcel) on private roads, without going through the platting process that would otherwise be required under the current terms of the LDA. Such developments could increase the need for public water and sewer supply systems and could increase the risk of stormwater drainage issues. Therefore, local governments will need to evaluate whether they should improve their ordinance requirements for providing adequate water and sewer systems, stormwater management, private streets and driveways, and more.
Local governments will otherwise need to use the one-year phase-in period, following the adoption of the HB 4081, to update their land division ordinances to reflect the new land division formulas, and, if desired, to reflect the availability of a number of divisions in excess of those required to be allowed by HB 4081.
If you have any questions about HB 4081 or its likely impact, please contact a lawyer in our Local Government Practice Group.
