How developers and municipalities can mitigate “Missing Middle” and scarce new housing inventory issues

Grand Rapids, Michigan, and surrounding areas have been named among the nation’s hottest real estate markets and best places to live by U.S. News and World Report, WalletHub and But our local communities are facing housing issues similar to those in larger metropolitan areas, like Manhattan, San Francisco and Los Angeles.

Two issues that have been recently reported by Bloomberg Businessweek and the Washington Post – scarce new housing inventory and the “Missing Middle” — are significant to West Michigan’s real estate and new housing construction industry.

In the Bloomberg article, “America Isn’t Building Enough New Housing — The long reach of the last crash” published on Feb. 11, industry analysts explain how the low housing inventory is causing home sales to increase to a point beyond what many Americans can afford these days. Coupled with low unemployment, not-in-my-backyard zoning rules and government regulation, the national housing shortage could linger throughout much of 2019, according to industry analysts.

“We are under-housed,” said Aaron Terrazas, a senior economist for Zillow Group Inc.

The Washington Post article, “Downsizing the American Dream: The new trend toward ‘missing middle housing” published on Feb. 14, shares a story about a Denver couple who experienced difficulty finding an affordable home in their price range. After a decade, the couple finally found a “lifeline” in a development project, called the American Dream, which includes 1,200- to 1,400-square-foot houses priced between $220,000 and $260,000.

According to data from the National Association of Home Builders (NAHB), more developers nationwide are beginning to build for the “Missing Middle” home buyers – building homes moderate-income buyers can afford rather than building the larger, more affluent homes from years past. NAHB data shows the average size of new houses fell for the third straight year in 2018. Median square footage of single-family houses decreased to 2,320 last year after peaking at more than 2,500 square feet in 2015.

In greater Grand Rapids, we strive to work with governing officials and address certain impractical requirements in order to provide housing for our “Missing Middle” citizens. Residential developers, like us, want to help and sustain the communities they’re building in, but their hands are often tied to unreasonable municipal government requirements. After years of larger lot-size developments, local governments are struggling with how to handle the need for additional housing and the need for “Missing Middle” homes in their respective communities. We hope local municipal governments understand the need to adjust their building requirements and zoning ordinances in order to help today’s home buyer purchase their dream home.

Leave a Reply

Your email address will not be published. Required fields are marked *