The missing middle construction sector includes development of medium-density housing, including 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 market segments expanded.
As a share of all multifamily production, 2 to 4 unit development is only 2.5% of the total. 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.
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