The Go Zone

Even with a site zoned for high density, the VISION House Hickory Grove overcame obstacles to build workforce housing.

An estimated 4.7 million more units of housing are needed to meet demand in the U.S., according to Zillow’s analysis of Census data, a major contributor to the affordability crisis for homebuyers. While numerous factors led to the supply and demand gap, one culprit, particularly for “missing middle” homes, is zoning. Rules that limit density and don’t allow for creative solutions such as accessory dwelling units (ADUs), duplexes and triplexes make it even more difficult for attainably priced housing to pencil out for builders.

VISION House Hickory Grove in Hickory, N.C., a partnership between Green Builder Media and Rob Howard, president of Howard Building Science in Granite Falls, N.C., has bumped up against numerous regulatory challenges during the quest to build 16 units of workforce housing.

The term “missing middle housing,” coined in 2010 by Opticos Design founder Daniel Parolek, refers to a range of housing options between single-family homes and large apartment buildings that are generally absent in housing markets throughout the U.S. Missing middle homes can be in any price range and include duplexes, triplexes, small multifamily buildings or clusters of smaller homes in pocket neighborhoods or cottage communities. Increasing the supply of sustainable homes in walkable neighborhoods is a goal of the missing middle movement.

Sometimes “missing middle” is used interchangeably with “workforce housing,” but they’re not always identical concepts. Workforce housing is typically defined as rental or for-sale homes designed to be affordable to people earning 80 percent to 120 percent of area median income. Often people in that income range earn too much to qualify for subsidized housing but are priced out in markets where rents and home values are high. Some examples of people who could benefit from a larger supply of workforce housing include recent college graduates, teachers, first responders and lower-paid healthcare workers. Missing middle housing can increase options for workforce housing.

A “Not in My Backyard” revival?

On paper, missing middle and workforce housing sound like a great solution to ease housing woes. But in communities all over the U.S., zoning codes and other regulations limit their viability.

“The No. 1 reason that missing middle housing is so difficult to build is that it’s basically illegal in most municipalities,” Howard says. “Even when planners address this issue and recommend rezoning, the next step is to go to the council. Most elected officials won’t vote for rezoning for missing middle housing because they want to get re-elected and don’t want to confront vocal opposition. NIMBYism is alive and well in most communities.”

It’s the same story everywhere: Building any missing middle, pocket neighborhood or community of fourplexes is difficult because of zoning regulations, says Jennifer Truman, design principal of The Rocket Shop, a Durham, N.C.-based residential design and land planning firm.

“We’ve made some progress over the past five years in Raleigh, Durham and Asheville to make zoning changes in urban infill spaces to allow missing middle and affordable housing to be built,” she says.

The site for VISION House Hickory Grove is zoned for high density, which allows up to 20 units per acre. While Howard could build up to 16 units on the 0.8-acre lot, he faced other regulatory issues that slowed the project and required numerous redesigns.

“Our first site plan had to be sent back to the drawing board after the city of Hickory reviewed it, so that’s when we brought in Rocket Shop to help us,” Howard says. “The city says yes or no, but not why certain things needed to be changed. Jenn Truman knows things really well, such as the fire code, so that helped us find a middle ground.”

The main issues faced by Howard in planning VISION House Hickory Grove were parking mandates, emergency vehicle access, and sanitation rules that require an enclosure for a dumpster rather than roll-out trash bins. While these may seem minor, when you’re trying to include open space and affordable units on a small lot, every inch of space matters, he says.

“We’re literally designing this pocket neighborhood around the dumpster,” Howard says. “Plus, there’s no recycling option with the city-supplied dumpster, so we’re handling all recycling ourselves and taking it to a community site.”

Fixing Past Prejudice

In North Carolina and many other states, zoning regulations establish density standards that eliminate the option for anything other than single-family homes, says Aaron Lubeck, development principal of The Rocket Shop.

“In most of the South, zoning allows for just four to six units of housing per acre, which leads to stealth suburbanization even in cities,” Lubeck says. “A good missing middle density would be 20 to 40 units per acre.”

Lubeck says older zoning codes often reflect the original planners’ prejudices.

“Zoning codes were originally based on race, but in more recent years they’re based on class,” Lubeck says. “People feel those nuances and realize that some of the codes are written to keep poor people out of various neighborhoods. If cities don’t address this themselves, the state will do so.”

Oregon, Washington and California have led the way to impose state rules that supersede local jurisdictions, Lubeck says.

“They’re basically restoring property rights to landowners, homeowners and builders to build what they want and what works in each location,” he says. “I think we’ll see more of this, and it will radically impact small builders.”

Common zoning reforms to address

Common sense regulations and a little flexibility could go a long way toward making it easier to develop missing middle or workforce housing, says Alison Adams, community and regional planning director for the Western Piedmont Council of Governments, which helped create a Housing Growth Toolkit that can function as a blueprint for builders and developers.

“It would be better to let the market and site conditions drive the decision about how many units of housing can be included on a given site,” Adams says. “Instead of a mandate about how many parking spaces are needed or a specific number of allowable units per acre, it would be smarter to have requirements for a certain amount of open space, stormwater criteria and then natural encumbrances like a river nearby drive the number of units that can be built.”

For example, a great property with a flat topography could accommodate more units without a zoning exception, she says. Builders want to provide sufficient parking to attract residents and can estimate what’s needed based on proximity to transit options and likely resident needs.

Several common zoning issues affect missing middle and workforce housing development, including:

• Density and setbacks: Mandatory maximum units per acre and impractical  setback rules can be a deterrent to missing middle housing, according  to Lubeck. “In Durham, the setback rules accidentally made all corner lots basically unbuildable,” he says. “Even though everyone knew it, it still took 10 years to fix the rules.
• Lot sizes: Most locations require a mandatory minimum lot size, typically 5,000 square feet, but in Durham, for example, lots can be as small as 2,000 square feet with three houses, Truman says. “Opening up small lots to development can be especially useful in historic downtown neighborhoods, which they’ve done really well in Austin and Houston, for example,” she says. “You can quickly build two houses where there used to be one.”
• ADUs: One of the easiest ways to rapidly add  housing units to a community  is to allow ADUs to be built next to or attached to existing homes. 
• “In Durham, you can build an ADU on any lot with a duplex, which increases  housing supply and affordability and lowers the land price per unit,” Lubeck  says.
• Duplexes and triplexes: Allowing duplexes and triplexes on lots that were  formally reserved for single-family homescan immediately increase supply,  Lubeck says. “In Durham, you can now put three units on an open lot,” he says. Minneapolis received a lot of attention for eliminating its single-family zoning, Lubeck says, but it neglected to fix its building code at the same time. The lesson there, he says, is that the city didn’t ask practitioners what was  needed and just left it up to the planners. “They made it almost impossible to build triplexes and fourplexes because they still had to fit in the box of single-family homes,” he says. “Portland, Oregon passed a similar law, and it has all kinds of cottage courts and other missing middle housing because they were more flexible.”
• Parking: Mandating two parking spaces per unit is common in many  locations and can make it nearly impossible to fit enough units on a site to make it financially viable, especially in infill locations, Truman says. “North Carolina is likely to be the first state to eliminate parking requirements  statewide,” Lubeck says. “The bill has already been partially passed there.”
• Emergency vehicle access: While everyone wants residents to be safe, some mandatory rules about large ladder fire truck access impact development. Rules that require a turnaround space can reduce available land for more housing units. “There are alternatives municipalities can look at, such as buying smaller vehicles in places with single-story or two-story buildings,” Adams says. Truman says there’s no one-size-fits-all way to create space for emergency vehicles. “What works for turning farmland into the suburbs doesn’t necessarily work for  urban infill locations,” she says.
• Lighting: Depending on the municipality, a certain number of lights are often required in a new development. Adams  suggests builders can make the case that fewer lights may be needed in a dense community with more porch lights and headlights from cars, which could save money.

Regulatory costs case study: VISION House Hickory Grove

The first challenge Howard faced at VISION House Hickory Grove was the mandate for two parking spaces per unit, which meant 32 parking spaces were required.

“Our options were to reduce the number of units or go to a multifamily design instead of the duplexes we had planned,” Howard says. “The duplexes didn’t qualify as multifamily. Multifamily zoning reduces the mandatory parking to 1.5 spaces per unit.”

One version of the site plan had a one-car garage underneath each unit, but Howard found that the city didn’t count a garage as a parking space since a lot of people use them for storage.

“An open carport would count, just not a garage,” he says. “We’ve had at least four or five versions of the plans by now and had to pay engineers to re-do those plans.”

Redoing the plans has added extra cost to the project and delays, plus, Howard adds, “it just felt unproductive.”

The current plan has four four-unit buildings configured to look like duplexes. Each building has three stories, with two two-bedroom, 2.5 bathroom units upstairs and two one-bedroom, one-bathroom units downstairs.

The sanitation issue was resolved with an enclosed dumpster, but Howard still hopes for a small variance to reduce the space it requires.

“The Hickory municipality required an enclosed dumpster at Hickory Grove, when the adjacent multifamily community has six uncovered dumpsters in its green space,” Adams says. “I suggested that maybe Rob can partner with one of the adjacent properties for a shared covered dumpster with a use agreement instead of taking up some of his land.”

A third issue was fire truck access, which requires a large enough radius to turn around a truck unless you have a certain amount of linear driveway space, Howard says.

“We were able to meet the requirement for a fire truck to pull in and pull out,” he says. “Of course you want to provide the safety for all the residents, but we spent a lot of time trying different options for the site to accommodate these rules.”

Howard says every town should have a separate ordinance to meet the needs of pocket neighborhoods or cottage infill sites, since they are smaller and more complicated to design than a subdivision with half-acre lots and single-family homes.

Role of builders and developers in zoning reform

Naturally, builders and developers, particularly smaller businesses, don’t have the time to become activists for zoning reform, but they can have a shared impact, Adams says.

“The biggest impact is to get an ordinance changed at the state level,” she says. “Builders can work with their regional home builder associations and tell the story of how zoning changes could benefit the community, not just their business. It’s better to approach this as a whole city issue rather than just a single parcel.”

However, smaller builders are often left out of policy discussions that can impact their business, Lubeck says.

“Builder associations tend to be dominated by bigger builders and smaller builders tend to be treated like the ‘red-headed stepchild’ and left on their own,” Lubeck says. “The result is that they often have to compromise on their projects even when they would prefer to build greener, more affordable homes.”

Lubeck recommends builders focus on zoning reform for greater density, since larger minimum lot sizes combined with single-family, home-only zoning naturally leads to larger luxury homes.

“It’s a simple math problem: 10 years ago, a buildable lot was $30,000 and now it’s $100,000 to $150,000 on average,” he says. “You need to lower the cost of land per unit to make building attainable homes financially viable.”

Truman suggests builders focus on design choices that may be more amenable to neighbors and more cost-effective.

“We try to provide good shared outdoor space, semi-private outdoor space and private outdoor space,” Truman says. “Cottage communities can still feel like single-family home communities. It can also be less costly to build 12 cottage units instead of a large apartment building.”

In addition, Truman recommends focusing on needs that are not being met in your market.

“Rob is trying to provide the size of homes that are not available in Hickory,” she says. “He’s including a mix of sizes that work for a family and some smaller units for single people or a couple to provide flexibility within the same site.”