Despite the current volatility of other economic indicators, the housing market has remained strong. Inventory is down, the number of buyers is up, and prices are increasing to match. However, the increase in values could price some people out of the market in their area, or low inventory could mean that there is simply not enough housing in a given locale for all of the interested buyers. How can this be solved in a way that is beneficial for the housing market, municipalities, and buyers?
The answer may already exist. Now commonly referred to as “missing middle housing,” mixed multi-unit, live/work, and small-densified housing was commonly constructed and used throughout the United States right through the middle of the twentieth century. Since, there has been a lapse in the construction of this kind of housing in favor of single family home suburban sprawl and high-density housing solutions (think high-rise condos and apartments).
What is it?
“Missing middle housing” is a blanket term for a wide range of different types of housing. They tend to be smaller in size, lower in cost, and have a modestly higher unit per acre density than communities of exclusively single family homes. There are various types of dwellings that are usually lumped into this category, including duplexes, triplexes, cottage clusters (or bungalow courts), mixed residential/commercial buildings, and small townhouse blocks.
However, it is worth noting that “missing middle housing” is used, generally, in reference to a style of development which incorporates these many types of housing into walkable, convenience-oriented communities. Walkability, convenience, and affordability are of increasing importance to buyers, and “missing middle housing” tidely addresses these considerations. That means that it is more desirable to buyers in addition to being more affordable.
What’s the community and economic impact?
Once a common style of development, “missing middle housing” is garnering renewed interest from areas that are already experiencing a housing shortage. According to research at Zillow, San Francisco, for example, would be able to increase their housing stock by 18.4% (versus only 11.8%) over the next twenty years by allowing just one in ten lots developed to host two dwellings. Allowing for diverse development far outpaces the rate at which housing will be able to be added using their current system of suburban sprawl.
More housing availability and greater community desirability increases the number of buyers who can and want to purchase; having mixed types of dwellings at a large range of price points helps people to more quickly move away from renting and become homeowners. As more incremental housing opportunities exist, it also allows those same buyers to more quickly transition into larger or more desirable homes. All of this means that agents would be closing more deals for their clients and would see their number of clients increase.
Adding “missing middle housing” to development boosts the number of people who can live in an area, thus, allowing for greater public investment in infrastructure to serve the area. Live/work buildings allow for job growth, locally oriented business, and serve to further increase the tax base of areas in which “missing middle housing” is found. This style of housing can do a lot to anchor a community.
As these styles of housing are kept roughly similar to single family homes in scale, it is easy to work them into existing communities during redevelopment with minimal impact on neighborhood aesthetics. That means that concerns over this style of densification leading to a complete shift in the look of a neighborhood are largely unfounded.
Why isn’t it more common?
Having a greater range of housing opportunities is a win for buyers, agents, and municipalities. Why, then, is “missing middle housing” still missing? In some areas it isn’t. There are cities who have seen the opportunity that it presents and paved the way for its renewed expansion. Other places are already in the process of removing some of the barriers to its construction. Most places, however, still need input from professionals and policy makers in order to transition existing codes and ordinances to make way for the renewal of the construction of these types of dwellings.
It won’t work everywhere, to be sure. It is not a silver bullet to every housing and urban planning conundrum. However, in many areas, most of which are still not yet investing in developing “missing middle housing,” it presents a tremendous and untapped opportunity for buyers, investors, and communities.
