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The Missing Middle: Supply vs. Aesthetics in the Drive for New Housing

Zoning changes in cities such as Minneapolis have helped prompt new construction, but allowing more units on formerly single-family lots isn’t a panacea for housing shortages.

Construction crews digging on a lot to build housing.
Housing construction in Los Angeles.
A spate of recent zoning changes across the country has focused on opening up single-family neighborhoods to accommodate more housing units and more people on each lot. The focus on reforming typical single-family zoning makes sense; only allowing the most expensive type of housing (single-family houses with their own big yards) is the linchpin of American zoning, and it’s restricting housing supply and causing affordability problems. Unfortunately, some high-profile changes to single-family zoning are not leading to much new construction.

I believe zoning reform needs to include allowing more housing in existing single-family neighborhoods. However, reforms that only change the number of units allowed on existing lots — rather than employing additional changes like reducing minimum lot size requirements, reducing setback requirements and increasing allowable height — are drawing backlash from residents without proportionate improvements to housing supply and affordability.

Instead, policymakers should legalize types of housing that get built in large numbers — such as small-lot single-family houses and large apartment buildings — even if this violates the sensibilities of what I call the “compatibility movement”: A school of architects and urban planners who support allowing new housing in existing neighborhoods, as long as the new construction isn’t in significantly larger buildings. They often support form-based codes that allow for more than one unit of housing in a structure, while still mandating that new construction is of a similar size and appearance to surrounding buildings.

Daniel Parolek has been one of the most influential voices of this movement, outlining the approach in his book Missing Middle Housing. He coined the now-common term “missing middle” to refer to a category of housing falling between apartments and single-family houses that’s especially lacking in new construction in the U.S. Examples of missing middle can be found in old neighborhoods that include duplexes and fourplexes mixed in with single-family houses. Missing middle housing can offer construction costs that are lower on a per-square-foot basis than high rises while also providing a less expensive option than lots of the same size with single units.

Some localities across the country have leaned into this theory for creating units and reducing housing costs. In 2019, Minneapolis became the first city in the United States to repeal single-family zoning. Its new law replaced single-family zoning with triplex zoning, allowing triplexes to be slightly larger than single-family houses. At the state level, legislators from California to Maryland have implemented similar reforms. Localities in these states are required to permit between two and four units on lots within the built envelope that would previously only allow for a single-family house.

A 3,000-square-foot duplex or triplex can blend seamlessly into the appearance of neighboring single-family houses. This approach has the advantage of allowing policymakers to explain the change to constituents as a change that will have little effect on the outward appearance of their communities, and this may contribute to why it’s proven popular.

But in fact, the politics of the “same box, more units” approach haven’t proven so simple. At the same time they were eliminating single-family zoning, Minneapolis policymakers made changes to allow large apartment buildings in mixed-use neighborhoods. Units in larger apartment buildings are now the vast majority of new housing being built in Minneapolis. But the single-family zoning changes fueled a lawsuit that threatened the entire package.

Similarly, Arlington County, Va., has long been a nationwide leader in allowing large multifamily buildings to be built around its transit stations. But recent changes allowing missing middle construction — forecast to produce a tiny fraction of the units the county permits in large apartment buildings — has drawn fierce opposition and resulted in another homeowner-driven lawsuit that could require a return to single-family zoning.

Houston, meanwhile, has the most permissive land use regulations among U.S. cities. It has made some important liberalizations in the past decade that are facilitating redevelopment of single-family neighborhoods. There, buildings up to 75 feet tall are permitted adjacent to single-family houses, about double the three-story maximum height that the compatibility approach suggests legalizing in residential areas. Houston policymakers dropped the minimum lot size requirement from 5,000 square feet down to 1,400 square feet for part of the city in 1998, expanding the standard to the whole city in 2013.

Like the Minneapolis triplex policy, the Houston policy generally permits three units to be built on a lot where one was allowed previously. But Houston allows much more square footage in each new unit by allowing taller structures and small setbacks. In Houston, when a single-family house is replaced with new small-lot houses, the new built square footage typically exceeds the old house by a factor of 4.2. It rarely makes financial sense to demolish an existing house or substantially renovate it into more units without adding significant square footage in the process.

Parolek acknowledges that many cities will need to do more and address large minimum lot size requirements in order to facilitate the level of walkability that low-rise development can provide when buildings are close together. For example, he suggests legalizing stacked triplexes on lots as narrow as 30 feet. Many single-family lots today are three times that wide or more.

However, Parolek and other compatibility advocates celebrate Minneapolis’ changes, which lack the Houston-style approach to lot-size requirements that have led to much more construction. While Houston’s lot-size reforms have facilitated tens of thousands of new houses, Minneapolis’ resulting new units number in the hundreds. Parolek, meanwhile, excludes most Houston townhouses from his definition of missing middle because of technicalities regarding the garage placement. Further, he counsels against allowing more than one house-sized unit on existing lots, which Houston effectively does, because this significant increase in built square footage would be out of scale with the neighborhood.

The compatibility-only approach misses the fact that the development pattern in many U.S. neighborhoods is itself incompatible with infill construction adding units within the scale of single-family houses. It’s not uncommon to see lot-size requirements of one acre or more in the U.S. The market for fourplexes on such a large piece of land is miniscule. This typology would offer less quiet and privacy than single-family housing without the benefits of proximity to jobs, restaurants, shops and lively public spaces that significantly denser neighborhoods can offer.

Allowing more units within the rough envelope allowed for single-family houses is one step toward urgently needed housing. However, alternative approaches — such as permissive rules for Houston-style small-lot development and expanding the areas zoned for large apartment buildings — could deliver more housing for the same political capital. Housing affordability is not a problem with one easy fix.
Emily Hamilton is a Senior Research Fellow and Director of the Urbanity Project at the Mercatus Center at George Mason University. She can be reached on Twitter at @ebwhamilton.