Why is Missing Middle Housing Missing?

“Missing Middle Housing” is a popular notion in urban planning and design circles. The term was coined by Daniel Parolek in his book by the same name. The main point is that our urban environments often leave out buildings of a particular scale – we define that here as being between 4-7 stories. This particular scale of development has become more popular in cities across the United States over the last decade. It allows for a much more efficient use of space and utilities than suburban development, pairs well with transit-oriented-development, and solicits less push-back than larger scale development. However, as our research shows, this type of development has largely remained out of New York City.

The Opportunity

Our research begins by understanding how lots are currently zoned across the city. 76% (612,167 tax lots of 806,334 total residential tax lots) of residential lots zoned throughout the city are considered low density (R1-R5). An additional 23% (185,140 tax lots) are what the city deems ‘Medium-Density,’ (R6-R8). These ‘Medium-Density’ lots, however, can sometimes yield projects as tall as 17 stories under as-of-right requirements, meaning they are hardly what most would consider medium-density.

For the purpose of our analysis, we looked at a much narrower set of lots which under current zoning could yield projects of between four and seven stories – or a maximum height between 40-75 feet. This criteria matches four residential districts: R6A (15,291 tax lots), R6B (50,758 tax lots), R7B (3,429 tax lots), R8B (7,371 tax lots) for a total of nearly 10% (76,849 tax lots) of NYC’s total residential tax lots (806,334). For the purpose of this analysis, we utilized what was until recently called the “Quality Housing” bulk regulations. Those regulations are now the default zoning pathway for projects in the city as of the passage of the City of Yes for Housing Opportunity package on December 5, 2024. Within this group, and as of 1/15/25, PLUTO records identify 1,181 “vacant” lots (R6A 413 lots, R6B 697 lots, R7B 59 lots, R8B 24 lots).

Under current zoning and code requirements, these lots could yield an estimated 11,000 additional dwellings units across the city. This is calculated by taking the areas of vacant lots in the described districts, multiplying by their base FAR and dividing by a standard 680 SF DU factor. To put this in perspective, in the 1920s and 1930s, a significant portion of NYC’s housing stock – brownstones, walk-ups, and courtyard buildings – was built at this scale, forming the backbone of walkable, transit-oriented neighborhoods. Encouraging missing middle housing could not only add much-needed housing but also preserve and enhance the city’s historic urban fabric.

Regulatory and Financial Barriers

Currently, development within the city is dominated by large developers and contractors, which has led to an erosion of trust between communities and those building within them. This situation is largely the result of arduous approval and financing processes, which require substantial resources and specialized industry knowledge, making it difficult for new entrants to compete. The complexity of the city’s approval processes means that navigating zoning variances, environmental impact reviews, and community board approvals can take years to complete, adding substantial uncertainty to any development. This disproportionately impacts smaller projects, as the costs of compliance do not scale linearly—smaller projects often face the same bureaucratic hurdles as much larger ones, making them financially unviable. As a result, many developers opt for large-scale projects where higher unit counts justify the lengthy and expensive approval process, further marginalizing smaller-scale, community-led initiatives.

Additionally, financing mechanisms strongly favor large-scale, well-capitalized developers. Traditional lending institutions prioritize projects with high return-on-investment guarantees, often requiring pre-leased commercial spaces or large-scale developments to justify lending risk. Small and mid-sized developers struggle to secure funding, particularly when attempting to develop missing-middle housing that may not offer the same speculative profit margins as luxury high-rise developments. This discourages investment in four- to seven-story, multi-family housing, despite the fact that such housing typologies historically formed the backbone of NYC’s most vibrant neighborhoods.

One way to address these obstacles is for the city to streamline building department approvals and expand opportunities for Self-Certification for a broader range of projects, allowing licensed architects and engineers to approve more mid-rise developments without prolonged review processes. Revisiting these requirements is a natural extension of the recently passed City of Yes for Housing Opportunity initiative, which explicitly acknowledges that “we have created more and more barriers to building the kind of housing that people need in every corner of the city.” Expanding these reforms could unlock the development of a new generation of affordable, community-scale housing projects that balance density with neighborhood-scale development.

Building Code and Zoning Challenges

Beyond regulatory and financing obstacles, there are significant physical and zoning-related challenges that make developing medium-density housing difficult. Under current code requirements, mid-rise projects often just barely surpass height and occupancy thresholds that trigger costly compliance measures, including:

Multiple Egress Staircases

• New York City Building Code (NYCBC) § 1006.3 and Table 1006.3.3 require at least two means of egress for R-2 buildings taller than three stories – or with an occupancy exceeding 10 people per floor – unless built with more expensive non-combustible construction and fully sprinklered.
• Impact: This requirement increases core space, reducing usable floor area, and adds cost due to additional stair construction.

Elevator Installation Mandates

• NYCBC § 3002.4 mandates elevator access in multifamily buildings at and above 5 stories – or with a common entrance serving 3 or more dwelling units above the 3rd story.
• Impact: Adds substantial upfront installation costs and long-term maintenance expenses, making mid-rise buildings disproportionately expensive compared to walk-up buildings.

Accessibility Requirements

• Buildings with 4+ dwelling units under NYCBC Chapter 11 and FHA guidelines must be ‘adaptable.’ Larger buildings, and elevator buildings, then require all units to be adaptable, and at least 1 unit – or 5% of units, whichever is larger – to be fully accessible.
• Impact: Compliance increases unit sizes and more costly design features.

Non-Combustible Construction & Sprinkler Requirements

• NYCBC Chapter 6 mandates non-combustible (Type I or Type II) construction for buildings exceeding 6 stories. Additionally, per NYCBC § 903.2.8, buildings with four or more stories or a total floor area exceeding 12,000 sq. ft. require full sprinkler coverage.
• Impact: Significantly increases material and labor costs, limiting the feasibility of cost-effective mass timber or light-frame construction for missing middle housing. One common way around this is the use of “5-over-1” construction, where 5 stories of combustible construction are erected above a 1-story non-combustible concrete podium with the portions of the building treated as two distinct buildings from an egress and occupancy perspective.

Off-Street Parking Minimums

• The NYC Zoning Resolution (ZR) 25-31 establishes parking minimums that vary by district. For the districts we analyzed, projects of up to 10-15 units can be exempt from the requirement, again, depending on the zoning district. Smaller sites can also be exempt, but that only applies to lower density districts. For the districts we are analyzing, these exemptions do not exist, meaning that no matter how small the site is, off-street parking is required. The 2024 City of Yes for Housing Opportunity package reduces some of these requirements in transit-accessible areas.
• Impact: Parking requirements consume buildable square footage, drive up per-unit costs, and discourage small-scale developments.

Each of these elements adds substantial costs to missing-middle housing projects, making them economically infeasible when compared to either smaller-scale (1-3 unit) developments, which avoid these thresholds altogether, or large-scale (100+ unit) projects, where costs can be distributed over a much larger number of units. This regulatory structure creates a disincentive to develop mid-sized buildings, which historically formed the fabric of NYC’s walkable, mixed-use neighborhoods.

For example, requiring two means of egress (e.g., staircases) for buildings taller than three stories dramatically reduces the efficiency of floor plates in small buildings. Many European cities, for instance, permit single-staircase buildings up to six stories, allowing for more efficient floor layouts without compromising safety. The requirements in New York City not only limit design flexibility but also forces developers to allocate a disproportionate amount of square footage to circulation spaces rather than housing units. In turn, this results in fewer overall units, raising per-unit construction costs and reducing the affordability of the project.

Similarly, mandated off-street parking requirements—particularly in areas well-served by public transit—are an outdated legacy of 20th-century car-centric planning. Parking minimums significantly increase construction costs, often requiring underground garages or the acquisition of additional land, both of which inflate overall project costs. Fortunately, the recently passed City of Yes for Housing Opportunity, expanded the zones exempt from parking minimums, and created a new zone where the requirements are cut roughly in half. Still, the mandate for parking minimums at all remains an impediment to missing-middle development in the city.

In many cases, these added expenses make medium-density projects financially infeasible, leading developers to either scale down projects or scale project up; in either case, they avoid mid-sized development.

Where We Go

Revisiting the building code items noted above – as well as bolstering city and state sponsored programs to fund projects of this scale – would encourage mid-sized, community-scaled developments, creating an alternative to the current system that favors either small-scale luxury townhouses or massive high-rises.

Policy solutions could include:

• Expanding Self-Certification for mid-rise projects.

• Creating a public financing program specifically for missing middle developments.

• Exploring tax incentives for 4-7 story projects that include affordable units.

• Allowing single-staircase buildings up to six stories, as in many European cities.

• Further reducing off-street parking minimums citywide.

By making it more viable for small and mid-sized developers to build missing-middle housing, NYC could unlock thousands of new affordable housing units while preserving the walkable, mixed-use neighborhoods that define the city’s historic urban fabric.

December, 2024

RESEARCH TEAM

Galia Solomonoff, Director

Eddie Palka, Adjunct Associate Research Scholar, ‘18 M.Arch

Benjamin Vassar, Graduate Research Assistant, ‘25 M.Arch

Julian Krusic O'Donnell, Graduate Research Assistant, '26 M.Arch