Despite Multiple States Abolishing Single-Family-Only Zoning, Very Few Duplexes and Triplexes Are Being Built
A new report illustrates that the middle of the housing market is still missing.
Duplexes, triplexes, and fourplexes remain a small fraction of overall home construction despite several states' passage of reforms legalizing this type of "missing middle" housing in all residential neighborhoods.
"Multifamily development projects have been growing in size," wrote Apartment List researchers Chris Salviati and Rob Warnock in a new report parsing U.S. Census Bureau building permit data. "From 1990 to 2009, 18 percent of multifamily units permitted were in buildings with two to four units; from 2010 to 2022, this type of 'missing middle' housing accounted for just 8 percent of multifamily building permits."
In 2022, local jurisdictions permitted 52,735 homes in two- to four-unit buildings. That's a paltry 3 percent of overall construction. It's an increase in raw numbers from the 2010s when the country was typically permitting under 40,000 missing middle units per year but a drop in the share of permitting for new housing. That drop is partially explained by a boom in larger multifamily construction.
Still, these permitting figures also speak to the slow start, and often disappointing results, of missing middle reforms that have passed thus far.
Three states now, Oregon, California, and Maine, have passed bills allowing at least duplexes on almost all residential land statewide. On a local level, Minneapolis garnered a lot of attention for being the first jurisdiction in the country to eliminate single-family-only zoning in late 2018.
Minneapolis implemented its reforms in 2020. Portland, Oregon, implemented state-level reforms in August 2021. (Other jurisdictions in the state had until June 2022 to act.) California's S.B. 9, which legalized duplexes and lot splits, went into effect in January 2022.
(Maine gave municipalities until July 2023 to implement that state's missing middle reforms.)
This means we have at least a year's worth of these reforms being in effect in most places that have adopted them. The evidence so far suggests that they're doing little to boost housing production.
In January, the University of California, Berkeley's Terner Center for Housing and Innovation found that construction activity related to S.B. 9 was "limited or non-existent" in a survey of 13 cities where those kinds of projects should have been most feasible. Los Angeles approved just 38 S.B. 9 applications for duplexes and lot splits. San Francisco approved only four.
Things are going somewhat better in Portland, Oregon. From August 2021 to February 2022, missing middle reforms led to 127 new units in formerly single-family-only zones, of which 36 units were accessory dwelling units.
The abolition of single-family-only zoning in Minneapolis led to the construction of 104 new duplex and triplex units in the first two years post-reform.
The modest increase in housing production can be largely explained by how marginal many of these missing middle reforms have been.
Often, cities will legalize missing middle housing without allowing the new multi-unit buildings to be much larger than the single-family homes they'd replace. That means a builder faces all the costs of tearing down an old unit without the ability to add much additional revenue-generating floor space.
One explanation for Portland's relative success at building missing middle housing is that it provides a schedule of density bonuses whereby duplexes can be larger than single-family homes, triplexes can be larger than duplexes, and so forth.
Nevertheless, all these structures have to be smaller than the single-family structures Portland's zoning code used to allow.
Another problem facing missing middle home construction is a whole thicket of nonzoning rules and practices that assume new construction will either be single-family homes or larger apartment buildings.
For instance, California's S.B. 9 legalized duplexes and lot splits on single-family zoned properties. But missing middle builders report that some utility companies in the state will only allow one metered connection per single-family property.
It's a similar problem in Portland. The state has both legalized fourplexes and expedited the process for dividing single-family properties into multiple fee simple lots.
That latter reform should theoretically expand the market for fourplexes, as they can be chopped up and sold like traditional single-family homes. (The alternative is that people have to rent them or buy into a condo association.)
But existing requirements that each individual property comes with a separate water line can make these lot divisions both physically impractical and financially infeasible on the city's typically sized single-family lot.
"We don't know if it's going to be possible to get four sewer taps in that 50 feet of street frontage," Eric Thompson, a missing middle developer in Portland, told Reason last year. Each tap can also cost as much as $10,000. "That really acts as a tax."
The Terner Center report notes that everything from fees, building codes, and subdivision rules can also make S.B. 9–style duplexes difficult or infeasible to build. These headwinds can all surface in jurisdictions that are genuinely trying to implement state-level zoning reforms instead of cynically undermining them.
Missing middle reforms have been justified as a way of making housing more affordable. More units per property allow land costs to be split across a greater number of households. More supply overall will lower prices.
The Apartment List report underscores the truth of that latter statement.
"The nation's most expensive markets—e.g. New York City, Boston, San Francisco, and Los Angeles—demonstrate clearly how they got that way. Namely, by building new housing at extremely low levels for decades, in spite of booming demand," write Salviati and Warnock.
Those listed cities have far lower rates of per capita building than booming, more affordable Sunbelt metros like Phoenix, Dallas, and Houston.
A number of state legislatures are considering missing middle reforms this year. The fewer existing regulations they leave in place, the more they'll play their intended role in boosting housing supply.
