United States

As housing affordability challenges escalate, an increasing number of middle-income renter households are facing cost burdens. In response, states and localities are implementing policies to address these needs. While these programs aim to expand affordable housing in high-cost areas, they face criticism for potentially diverting resources from lower-income households.

This new research paper from the Harvard Joint Center for Housing Studies explores these middle-income housing initiatives, evaluating their goals, benefits, and the tradeoffs involved. By examining eleven state and local programs, the paper finds these initiatives are becoming more common across diverse regions, primarily focusing on expanding housing supply for the “workforce” based on area median income.

However, these programs often fall short of assisting the most cost-burdened renters, who are predominantly lower-income. Moreover, the demographic disparity, with middle-income renters being disproportionately white, raises concerns about reinforcing racial inequities.

The paper recommend designing middle-income housing programs that do not detract from resources for the lowest-income households, operate in areas where the market fails to serve middle-income renters, and provide additional benefits to lower-income communities. Read the full report to understand the complexities and potential solutions in addressing middle-income housing needs.

Vermonters need better housing options and more affordable homes. Achieving this goal requires changing how homes are built in Vermont, particularly regarding the location and types of new homes.

Currently, Vermont’s housing production is focused on large and expensive single-family homes on sizable lots and large-scale multi-family apartments. However, Vermonters seeking housing options in-between, such as duplexes, four-plexes, cooperative housing, senior housing units, age-friendly homes, or townhouse condominiums, face limited choices. Regulatory and financial barriers have made developing diverse homes on a smaller footprint more challenging and complicated for small-scale developers who want to contribute to their communities.

This project aims to change that by unraveling regulatory complexities and reviving common-sense solutions that work for Vermont, such as Missing Middle Homes (MMH). The Vermont Homes for All Toolkit and community engagement process will re-introduce MMH to Vermont by focusing statewide attention on small-scale gentle infill and incremental development as a strategy to address Vermont’s housing and affordability crisis.

Video: In March 2024 the Department of Housing & Community Development launched the Homes for All Toolkit at a special event that brought together novice and emerging small-scale home builders, community development professionals, and local leaders interested in innovative home-building and home-renovation solutions to connect, network, and learn. Watch the Summit recording here!

In 2023, the Terner Center published “Making It Pencil: The Math Behind Housing Development” to assist policymakers in understanding the financial feasibility of large-scale, for-rent midrise apartment buildings. However, recent state and local land use reforms have focused on smaller-scale housing in lower-density neighborhoods, including accessory dwelling units (ADUs), duplexes, and fourplexes, often referred to as “missing middle” housing. States like California, Oregon, and Montana, along with cities such as Minneapolis and Portland, have introduced legislation and rules to promote this housing growth.

This policy paper employs the methodology from our 2023 report to analyze the development characteristics of missing middle projects. Through a series of project pro forma case studies across four California markets, the report finds that many missing middle housing types are not financially feasible, with four-unit ownership buildings being the most challenging to develop. Despite these challenges, missing middle housing can play a crucial role in providing entry-level homeownership and naturally affordable rental options. It is imperative for local and state policymakers to reexamine regulations that hinder the development of missing middle housing, such as lot size, parking, and insurance requirements.

Key insights:

Single-family zones – which cover three-quarters of residential areas in many Northern American cities – can produce harmful side effects such as inflated land values, racial and economic segregation, and urban sprawl. In response, many communities are looking at ways to introduce “missing middle” housing into existing single-family neighbourhoods.

One of the most notable reforms in recent years was the Minneapolis 2040 Plan, implemented at the beginning of 2020. Housing policies in the plan made headlines as it meant Minneapolis became the first major city in the US or Canada to abolish single family- zoning, allowing duplexes and triplexes to be built on most residential blocks. The Plan also included several provisions related to denser housing, including eliminating parking requirements and upzoning transit corridors and downtown areas.

This Small Housing Case Study shares key details of the Plan, its impact to date, and what other communities can learn from it.

Key insights:

The United States foreign-born population has quadrupled since the 1960s. In 2021, one in seven US households were headed by a foreign-born resident. Around half of these foreign-born residents have naturalized as citizens. Foreign-born residents comprise a growing share of the United States housing market: research projects that foreign-born households will become the primary source of new housing demand by 2040.

This literature review synthesizes previous research on the key barriers to and strengths of immigrants in becoming homeowners.

This report was authored by Sharon Cornelissen and Livesey Pack.

Key insights:

Manufactured housing holds promise as an affordable form of housing that could expand homeownership opportunities for low- and moderate-income households.

This report, from the Joint Center for Housing Studies of Harvard University, reviews the available literature to assess the principal barriers to greater adoption of manufactured housing, including:

• lingering negative perceptions of the quality of the homes despite notable improvements in quality over time;
• zoning and other land use regulations that limit the ability to site these homes in many communities;
• market conditions that erode the cost advantage of manufactured homes; the unique nature of the supply chain for these homes that makes it difficult for consumers to obtain homes in many urban areas;
• and limits on access to affordable financing.

This report was authored by Christoper Herbert, Alexander Hermann, Daniel McCue & Chadwick Reed.