The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties.
While townhouse construction has trended higher in recent quarters, the multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has disappointed. For 2021, there were only 12,000 starts of such residences. This is flat from from 2020, during a period of time when most construction segments expanded. For 2022, the total increased but to only 16,000. Nonetheless, this marks the best year for this type of multifamily construction since the Great Recession.
For the fourth quarter of 2022, there were just 3,000 2- to 4-unit housing unit construction starts. This is flat from a year prior.
As a share of all multifamily production, 2- to 4-unit development was only 2.2% of the total for the fourth quarter. In contrast, from 2000 to 2010, 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.