Rohit Anand – In Washington, D.C., New Urgency for “Missing Middle” Housing Types and Price Points

UrbanLand ULI

April 28, 2017

Since 2000, Washington, D.C., has added more than 100,000 residents as a robust job market has attracted people both domestically and from abroad. The city’s population is expected to reach 1 million by 2045. The influx of new residents, most of whom are high-wage earners, has placed enormous pressure on the city’s housing market and has created new urgency around the production of so-called missing middle housing types.

A term coined by architect Daniel Parolek, missing middle housing lies on a spectrum between single-family homes and apartment units—townhouses, duplexes, triplexes, accessory dwelling units, live/work spaces, and lofts among them—that serve households in the middle of the income spectrum. The target consumers include young families, middle-income households, and seniors who are on fixed incomes.

At a recent ULI Washington conference, a panel of housing experts agreed that more missing middle housing types were needed for the city to maintain its competitiveness and continue its demographic upswing. Millennials flocked to D.C. when they were still unattached, but whether they remain in the city after marrying and starting families remains an open question. Thirty percent of millennials recently surveyed by ULI Washington said they “definitely” expected to be caring for children in the next three years, yet with the median home price being $549,000, many millennials may defer buying a home until after settling down.

The panel noted that although millennials may earn competitive salaries—enough to make a monthly mortgage payment—they do not necessary have enough saved for a significant downpayment.

“The millennial population is here,” said moderator Yolanda Cole, principal of Hickok Cole Architect. “It’s always easier to retain population than it is to attract or recruit people.” Yet millennials “haven’t come up against the reality of price, schools, daycare, and all the other things associated with having families. But you have a ready market who wants to stay if we can provide the kind of housing at the price point they can afford.”

Millennial families are not the only ones to benefit from these new housing types and price points. Essential members of the workforce—teachers, public safety officials, firefighters—who are being priced out of urban neighborhoods also benefit. Baby boomers and seniors who either want to remain in or move back to the urban core after downsizing also are searching for affordable housing options.

“This is putting a lot of pressure on housing in general,” Cole said. “We really need to provide housing across the board to get the price point down for everybody.”

Missing middle housing could be a remedy. Built with 16 to 50 dwelling units per acre (39 to 123 dwelling units per ha), missing middle housing creates density in neighborhoods, encourages a mix of uses, and maximizes developable land through the smart, efficient design. The concept promotes housing built around alleyways, courtyards, and other in-between spaces to expand supply and diversify a city’s housing stock.

Yet in Washington’s hot real estate market, even townhomes are inaccessible for many as townhome price increases have outpaced those of condos in recent years, explained panelist Evan Regan-Levine, vice president, JBG Companies. The availability of three- and four-bedroom townhomes under $1 million has dwindled, even in the eastern quadrants of the city—historically lower-income neighborhoods that are rapidly gentrifying.

Another problem is that there has been a downzoning trend in certain D.C. neighborhoods, reversing the densities and variety of housing types that missing middle housing leverages to create truly mixed-income neighborhoods, said Harriet Tregoning, a former deputy assistant secretary at the U.S. Department of Housing and Urban Development (HUD) and former Washington, D.C., planning director.

Tregoning noted one bright spot: the approval of accessory dwelling units on single-family homes, which could potentially add 100,000 new housing units to the city. The city’s housing stock—primarily rowhouses—is durable and has been reinvented over decades. Many rowhomes started out as single-family dwellings for large families pre-1950, were converted into duplexes or apartments, and may now be being restored to their original single-family state. “The mutability of that style of housing is a real strength of the city,” she said.

A new wave of architectural and design innovation is responsible for creating new missing middle product types. Rohit Anand, principal at KTGY Architecture + Planning, shared a prototype of a flexible, five-plex building module that can be configured in four different ways. Through densification of units and designs that incorporate outdoor space or walkable environments, missing middle housing fosters social interaction and community bonds.

“Millennials are looking for experiences beyond anything else—the experience of living in a community that is walkable and has amenities,” Anand said.

The so-called maker movement of small-scale or craft manufacturers has also created a demand for more live/work spaces and neighborhoods that blend industrial and residential uses. As more people increasingly spend part of their day working from home and cafés and coffee shops pop up to serve this population, the character of residential neighborhoods is changing with some buzzing.

In addition to missing middle housing, housing that can be customized throughout an owner’s life cycle keeps owner-occupiers in their homes and reduces “frictional costs” of turnover, noted Regan-Levine. “How do we built a flat on top of a rental unit so that the buyer can convert it into a home office or a nursery?” he asked. In Seattle—a city with affordability challenges and high-wage job growth similar to Washington, D.C.’s—a change to the zoning code is expected to encourage more of this type of housing. For both cities to retain their enviable workforces and enable their residents to thrive, missing middle housing becomes an essential strategy and “flexibility ends up being a key word,” Tregoning said.