The missing middle construction 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 generally disappointed since the Great Recession. However, there was a noticeable uptick for this type of housing construction in recent data. For the fourth quarter of 2024, there were 5,000 2- to 4-unit housing unit construction starts. This is up 25% from the fourth quarter of 2023.
As a share of all multifamily production, 2- to 4-unit development was just above 5% of total multifamily development for the fourth quarter. However this is still lower than recent historic trends. 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. But recent data offer hope for additional housing supply for these kind of structures.
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