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Cities nationwide face a severe housing crisis characterized by soaring costs, low production, and limited housing options. This has left many communities grappling with affordability challenges and housing insecurity. Resolving the housing crisis requires a holistic approach that involves implementing multiple policy actions simultaneously. Revising zoning restrictions and introducing new amendments are critical components of this approach.

Restrictive zoning has critical impacts on housing production, the economy and society. First, it can lead to a financial slowdown and lower economic growth by limiting the number of businesses operating within an area. Second, restrictive zoning is a crucial driver of urban sprawl, with severe environmental and social implications due to high car dependency, leading to increased pollution and greenhouse gas emissions. Moreover, given that homeownership is closely tied to wealth generation, restricting its availability results in high costs, reduces opportunities for homeownership, and disproportionately affects lower-income individuals and people of color. Collectively, these factors exacerbate residential segregation and contribute to reducing the number of available units in the market, limiting access to opportunity and increasing costs for first-time homebuyers and renters alike.

New York City in particular is experiencing an acute housing crisis, with demand for housing units, particularly affordable ones, higher than ever before. Access to affordable and available housing has worsened due to the absence of a comprehensive plan, outdated zoning regulations, and downzoning measures implemented by past administrations. With a historically low rental vacancy rate of just 1.4% and an increasing number of people experiencing homelessness, the need for more housing units is only increasing. As a result of the city’s housing shortage, market-rate rents have increased by 36% since 2015.

Today, 52% of renters in New York City are cost-burdened, spending up to a third of their income on rent, and nearly a third are severely cost-burdened, spending half or more of their income on rent.

To address the housing crisis, the city is introducing a zoning reform package, the City of Yes for Housing Opportunity. This initiative aims to create a little more housing in all neighborhoods across the city, ensuring a more balanced distribution. A key objective of the plan is to reintroduce middle-density housing typologies in low-density areas. These buildings are already common in low-density areas, but current zoning largely bans new ones from being created. In fact, for too long a few council districts have had to shoulder the bulk of our City’s new affordable housing development, with over 50% of new affordable housing units being built in just 20% of the council districts. By addressing zoning restrictions and advocating for amendments conducive to more middle-density, the city can create new housing opportunities and address critical challenges contributing to the housing shortage.

This report is the first in a two-part series that examines the benefits of Missing Middle Housing in NYC and how zoning reforms can support this type of housing. This first part will focus on case studies from other parts of the country, showcasing the applications and outcomes in communities building middle-density housing. In the second part, we will explore the background and context of the City of Yes plan and review the importance of reintroducing middle-density to address the housing crisis in NYC.

What is Missing Middle Housing?

The missing middle housing typology primarily consists of buildings or conversions with 2-4 units that can be added in low and medium density neighborhoods while still maintaining the character enjoyed by those communities. It is considered to be “a range of house-scale buildings with multiple units - compatible in scale and form with detached Single-Family Homes - located in walkable neighborhoods.” This housing strategy is gaining popularity in the US as a promising solution to address the shortage of housing and produce more affordable units and is a viable solution to provide new and affordable housing among diverse communities nationwide.

A focus on missing middle housing offers several advantages, including the creation of more affordable housing options, fostering walkable communities, and reducing the need for excessive off-street parking spaces. The illustration above shows examples of housing types in the missing middle typology, which includes ADUs, Duplexes, Fourplexes, Courtyard Complexes, Multiplexes, and Live-Work houses. While missing middle housing presents an opportunity to address the housing crisis, the existing zoning regulations in many cities pose a significant obstacle to achieving this.

1

The Production Problem in NYC

Examining the housing permits issued over the years can offer insights into the impact of the city’s restrictive zoning regulations on housing production. Specifically, reviewing the number of permits issued for 2-4 unit buildings over time highlights the shift made away from prioritizing middle-density housing. The chart below presents the change in the number of housing unit permits issued by housing type since 1990. The data highlights that the number of permits issued for 2-4 unit developments has declined dramatically since the 2008 financial crisis and has not yet returned to pre-recession numbers. Restrictive zoning in low-density areas helped to fuel the shift, limiting housing development in many communities around the city.

The City of Yes for Housing Opportunity aims to improve housing production by creating more opportunities to build 2-4 units and multi-family housing in low-density neighborhoods. The plan seeks to increase the number of available units across neighborhoods to help alleviate housing costs for both renters and homeowners. This is not a new concept, and a significant body of research provides evidence that producing new housing can lead to lower rent prices.

A 2023 meta-study reviewing research from the US and various global contexts regarding changes in housing costs reveals that new housing construction either reduces or slows the rise in rent prices. For example, one study found that a “1 percent increase in yearly new housing supply causes the average rent level [in the local municipality] to fall by 0.2 percent.” Moreover, introducing new housing types provides a range of affordability levels, and is especially beneficial in low-density areas where single-family homeownership or rentals are out of reach for many.

The stabilization or reduction in housing costs is directly related to the increase in new units. It has been shown that rezoning can have a positive effect on housing production. Long-term research carried out in Zurich, Switzerland, spanning 25 years, found that land use policies that upzoned roughly 20% of the land led to a 13% increase in housing supply in the subsequent ten years. While these findings are promising, it is important to keep in mind that factors, such as labor, market demand, supply chain, available funds, and others also play a significant role and can substantially impact housing production.

2

Implementing Missing Middle Housing Strategy

Many strategies to address Missing Middle Housing have been implemented fairly recently, and it will take time to realize their full potential. Still, we are starting to see the tremendous benefits that action on middle-density housing can have.

Minneapolis, Minnesota

Minneapolis, MN stands out for its successful land use reforms that have transformed its housing market. The housing policy shift in Minneapolis can be attributed to various factors, including a rapidly growing population and inadequate affordable housing, which have resulted in a significant increase in housing prices throughout the city. Between 2010 and 2016, the city saw over 37,000 new residents, but only 12,000 new housing units were built. To address these challenges, the city implemented significant changes to its zoning code starting in 2009.

The need for a more robust approach led to the Minneapolis 2040 comprehensive plan effort, which went into effect in 2020. The new comprehensive plan revised existing zoning regulations, prioritized more housing units on residential lots, set minimum building height standards in high-density areas, and legalized duplexes and triplexes in residential districts. Additionally, the new policy included the removal of minimum parking requirements, which has encouraged housing construction and development along commercial corridors.

The housing policy shift in Minneapolis can be attributed to various factors, including a rapidly growing population and inadequate affordable housing, which have resulted in a significant increase in housing prices throughout the city. Between 2010 and 2016, the city saw over 37,000 new residents, but only 12,000 new housing units were built. The new comprehensive plan revised existing zoning regulations, prioritized more housing units on residential lots, set minimum building height standards in high-density areas, and legalized duplexes and triplexes in residential districts. Additionally, the new policy included the removal of minimum parking requirements, which has encouraged housing construction and development along commercial corridors.

Minneapolis has established four primary objectives with the aim of easing the housing shortage by promoting the construction of more missing middle homes:

First, the plan focused on increasing the production of affordable housing and expanding housing options to cater to diverse needs.
Second, efforts were directed towards ensuring equitable outcomes, particularly by addressing the racial homeownership gap.
Third, the initiative increased density within the city to optimize land use and accommodate population growth.
Lastly, the plan emphasized boosting the availability of housing that aligns with the specific needs and preferences of the community. These goals represented a comprehensive approach to tackling the city’s housing challenges.

Data from 2020 to 2022 demonstrates that Minneapolis’s comprehensive plan has yielded positive results in the construction of new housing units. In particular, there has been a 45% increase in permits issued for 2-4 units, surpassing the annual average for the years 2017 through 2019. These findings suggest that the implementation of new housing policies has begun to enhance the city’s housing supply, marking a promising step forward in addressing its housing challenges. The reduction in parking requirements was a significant factor in driving up the permits issued for multi-family housing, as seen in the chart below.

Changes in land use and bulk regulations in low-density residential areas, while important, were not the only factors that led to the creation of new housing units. Data suggests that removing parking requirements and increasing housing density in areas near transit and commercial corridors— as currently proposed in New York City—have had a significant impact on generating additional housing units and lowering housing costs. RPA found that in NYC, the partial elimination of parking requirements under Zoning for Quality and Affordability (ZQA) helped to unlock more middle density housing by reducing costs and parcel size needed to facilitate development. We expect these benefits to scale up through the City of Yes for Housing Opportunity proposal.

Although it is too early to understand what the full impact will be, initial evidence suggests that these recent initiatives in Minneapolis are contributing to efforts to address the housing shortage and have had positive impacts on the housing market. From 2017 to 2022, the city increased its housing stock by 12%, while rent increased by just 1%. In comparison, over the same period, Minnesota as a whole added only 4% to its housing stock while experiencing a rent increase of 14%.

Salt Lake City

Salt Lake City, UT implemented a rezoning initiative to advance a new housing policy by the close of 2023 in response to approximately 7% population growth from 2010 to 2020 and soaring housing costs that increased by over 5%. Moreover, only 25% of land that is currently zoned for residential use permits Missing Middle Housing. At the core of the city’s zoning reform is the goal to improve housing affordability through incentives that promote the development of Missing Middle and multi-family housing. This initiative is driven by the current land use, where only 25% of land that is zoned for residential use permits Missing Middle Housing.

The primary change under the new zoning regulations is that duplexes, triplexes, fourplexes, and row houses are now permitted in all residential neighborhoods, including on single-family lots where they were previously not allowed. Moreover, the zoning reform enables an increase in building height by 1-3 stories in multi-family housing, streamlining approval processes for housing projects to reduce time and costs, expanding the types of multifamily housing allowed in commercial areas, and reducing minimum parking requirements.

The Council also adopted new regulations for accessory dwelling units to make it easier for property owners to get approval and construct an ADU that fits their needs. The amendments expanded areas where ADUs were permitted and streamlined the process, and council is supporting financial help for constructing the units.

Houston

Houston, TX, as one of the largest cities in the country, has several policies that support low-density development, such as subdivision limits, minimum lot size requirements, setback requirements, and parking requirements, that encourage urban sprawl. Despite this, they are also incorporating missing middle housing strategies. Houston already allows for ADU construction, but parking requirements present an obstacle to reducing costs and constructing these housing units at scale.

Building upon three years of work by the Livable Places project, initially launched by the city’s Planning & Development Department, Houston promoted an initiative to address existing land use and housing policies, aiming to “diversify the variety and affordability of homes built in Houston.” The proposal passed in 2023, and new amendments were incorporated into the building codes, subdivision rules, and parking requirements.

The new regulatory framework presents opportunities to increase affordable housing by allowing for an increase in the number of multi-family buildings with 3-8 units as well as expanding ADUs. Additionally, the plan introduces a unique housing typology—courtyard-style developments, which allows for the construction of several units around a central courtyard without minimum lot size or maximum density restrictions.

The introduction of new regulations and the adoption of middle density housing strategies, coupled with reductions in parking minimums and adjustments to street frontage requirements, have prompted significant changes aimed at diversifying housing types and stimulating increased housing production.

Sacramento

Sacramento, CA serves as a compelling example, where single-family zoning has profoundly impacted the city’s housing landscape. Roughly 70% of residential areas are designated for single-family housing, highlighting the need for zoning reform to promote a more diverse range of housing types and facilitate faster housing construction. This has contributed to significant housing affordability challenges, especially with population growth, with 39% of households being housing cost burdened. Moreover, housing affordability has declined by 44% from 2011 to 2020, and with a 19% increase in rent from 2021 to 2022, the city is facing a severe housing crisis.

As a response, the city embarked on an effort to promote missing middle housing typology through its new comprehensive plan (2040 General Plan) adopted in February 2024. A report commissioned by Sacramento’s Community Development Department in 2022 identified key policy barriers the city faces in expanding its housing stock, and emphasized the benefits of embracing missing middle housing as a viable solution. Efforts to rezone residential areas and promote the construction of duplexes, triplexes, and fourplexes represent a significant shift away from traditional housing policies. While recent zoning changes have not yielded results thus far, they have sparked encouraging actions, prompting the city to revise its housing strategy by integrating more Missing Middle Housing alternatives.

Portland

Portland, OR has been pushed to reconsider its zoning and housing policies due to population growth in recent years. A 2016 report estimates that by 2035 the city will have approximately 123,000 new households and 260,000 new residents. The report further indicates that Single-Family zoning covers over 44% of Portland’s land, and less than 25% of housing units are of the middle density type. To address the need for more affordable housing options due to population growth, the city introduced the Residential Infill Project (RIP) plan in 2020. The purpose of RIP is to modify land use in Portland and aims to increase the housing stock by rezoning and enabling the construction of more duplexes, triplexes, or fourplexes.

The project is focused on promoting diverse and affordable housing options, explicitly emphasizing missing middle housing as a possible solution connected to social and economic opportunities.

The recent rezoning efforts in Portland have been a positive step towards enabling the construction of more missing middle housing, which has created several benefits for the planning process and housing stock. The city has implemented its development standards to regulate new housing types, which has resulted in better predictability of the anticipated built outcomes. The city has also enforced stricter parking regulations and limitations while compensating them by enabling additional parking options in narrow lots.

According to a 2023 report that reviewed the program, 86% of middle density housing units were constructed near designated centers and corridors, and nearly 80% of middle density housing units were within a 1/4 mile of transit. In comparison, around 53% of single-family homes permitted during this period were located in the same proximity.

Vermont

The State of Vermont’s housing production has stagnated since 2010, with production shrinking from an average pace of 1% before 2010, to less than .2%. In addition to limited new housing growth, 17% of the state’s housing stock is used for seasonal homes and there is a growing number of short-term rentals. This strain on available supply has created challenges for households, with estimates that nearly three out of every four extremely low income renter households are housing cost burdened. In response to these housing challenges, Vermont signed into law the Housing Opportunities Made for Everyone (HOME) Act in June 2023 to help the state more proactively address the state’s housing shortage. The bill provides a number of provisions to enable missing middle housing across the state:

Requires 5+ units per acre in areas that have water and sewer service
Allows duplexes wherever single-family homes are permitted and multi-family up to 4 units in areas with water and sewer service
Limits local appeals based on the character of an area to pushback on typical NIMBY efforts to stymie development
Enables more as-of-right development so long as projects meet basic requirements
Makes it easier to build up to 25 units of housing in new designated districts for a five-year period by streamlining the review process

In an effort to further promote the development of missing middle housing, the Vermont Department of Housing and Community Development created a Homes for All Toolkit, released in March 2024. This toolkit is intended to guide stakeholders interested in learning about and delivering middle density housing across the state and is built around three components - a workbook to help builders understand new regulations and advice for development; a design guide to encourage development that addresses local architectural features and weather conditions; and a series of case studies highlighting how these various housing typologies have found success throughout the state. The effort built off examples from other states to develop community check-lists and make it easier for developers to align with new housing policies to increase supply.

Eventually, there is hope that the state will be able to adopt a set of pre-approved designs and streamline the regulatory process, making it easier for developers and communities to accommodate new housing supply in a predictable way.

It is still too early to see the full impact of Vermont’s housing reforms. However, the policies that are being implemented coupled with the toolkit to educate stakeholders and help spur development are anticipated to help ease the housing challenges that Vermont is grappling with.

Solving the Missing Middle

Adopting strategies to address missing middle housing typologies is gaining traction across various cities across the country, presenting a promising solution to housing shortages and affordability challenges. By promoting the construction of 2-4 unit structures and moderately sized multifamily buildings in low and medium-density neighborhoods, cities are already working to diversify housing options while fostering walkable communities and reducing reliance on excessive parking. However, restrictive zoning regulations and parking requirements often pose an obstacle to such initiatives, exacerbating the housing shortage and slowing economic growth.

Cities like Minneapolis, Houston, Salt Lake City, and Portland are prime examples of the efficacy of zoning reforms and new housing policies that prioritize introducing more middle-density housing options. These initiatives emphasize density, affordability, and the diversification of housing options. These cities and others demonstrate the positive impact of forward-thinking approaches to housing policy, setting a precedent for other cities and towns nationwide to follow in addressing their housing challenges. The City of Yes for Housing Opportunity will help New York City catch up to peer cities when it comes to housing policy so that more New Yorkers are able to find stable and affordable housing across our diverse communities.

In Part 2, we will provide an overview of the City of Yes for Housing Opportunity initiative and dig deeper into the housing conditions in New York City and the proposal’s impact on housing production across the City.