“Missing Middle” Multi-Family Construction Unchanged in Q2

On Friday, the National Association of Home Builders (NAHB) provided an update on the “missing middle” multi-family construction sector. The “missing middle” sector includes development of medium-density housing, such as townhouses, duplexes, and other small multifamily properties.

The multifamily segment of the “missing middle”—apartments in 2- to 4-unit properties—has disappointed since the Great Recession. In Q2, there were just 3,000 2- to 4-unit housing unit construction starts, unchanged from a year prior.

As a share of all multifamily production, 2- to 4-unit development was just above 3% of the total for Q2, NAHB reports. In contrast, from 2000–10, such home construction made up a little less than 11% of total multifamily construction. Construction of the “missing middle” has clearly lagged during the post-Great Recession period and will continue to do so without zoning reform focused on light-touch density.