Missing middle multifamily starts backslide amid zoning headwinds

The recent decline in multifamily housing starts, specifically in the "missing middle" segment of 2- to 4-unit properties, is a concerning trend for the housing industry. According to the National Association of Home Builders (NAHB), these starts have dropped 24% year over year, which suggests that the momentum gained in the past few years is slowing down. This matters because multifamily housing, including smaller properties, plays a crucial role in providing affordable and attainable housing options for many Americans.

The main challenge facing the "missing middle" segment is zoning regulations that restrict "light-touch" density, or the ability to build more units on a single property without requiring significant changes to the surrounding neighborhood. These zoning curbs can make it difficult and expensive for builders to construct smaller multifamily properties, which can be a more affordable option for homebuyers and renters. As a result, the lack of available inventory in this segment can drive up housing costs and limit choices for consumers.

Looking ahead, it's essential to watch how policymakers and regulators respond to these challenges. The NAHB and other industry groups may push for zoning reforms that allow for more density and flexibility in land use. Additionally, builders and developers may need to adapt to these changing regulatory environments by exploring alternative construction methods or product types. For the paint industry, this trend may impact demand for certain products, such as those used in multifamily construction, and could influence the types of coatings and finishes that are specified for these projects.

Originally reported by housingwire.com. PaintNews adds analysis for real estate & property readers.