* 3/9/26 - Crains - Chicago sees the ‘missing middle’ as sweet spot for addressing the city’s housing shortage, repopulating neighborhoods + missing middle housing toolkit from Metropolitan Mayors Caucus
Buzz Sawyer
"In all, the initiative’s goal is to build 250 to 400 two-, three- and four-flats as infill
housing on vacant city-owned lots on the South and West sides. As of spring 2025,
Chicago had more than 7,000 such lots citywide.
In addition to McKinley Park, East and West Garfield Park, and North Lawndale,
missing middle projects are taking shape in Chatham, South Chicago and Morgan Park."
Chicago sees the ‘missing middle’ as sweet spot for addressing the city’s housing shortage, repopulating neighborhoods
During one of her first community meetings as a newly elected alderman for Chicago’s McKinley Park neighborhood, Julia Ramirez heard from residents who were laser-focused on a problem that plagues disinvested communities across the city: an overabundance of vacant lots.
In this case, the discussion centered on the 2400 block of West 34th Place. At the end of the block, the wood-frame and brick homes give way to a small, paved parcel where weeds grow through cracks in the weathered concrete.
On several occasions, homeless individuals had taken up temporary residence on the land. “People wanted to know, what are we going to do about them?” Ramirez says of the lots, where a small industrial building once stood.
The city’s answer: repopulate the neighborhood by selling city-owned vacant lots that can be developed into sorely needed housing. This approach, “missing middle infill housing,” addresses Chicago’s persistent housing shortage for middle-income households and helps upgrade neighborhoods while also offering construction assistance to qualified developers.
As part of Chicago’s $75 million Missing Middle Housing Initiative, five two-flat residential buildings will be going up on West 34th Place. Ramirez grew up just blocks away near West 40th Street and Western Avenue, and hopes the project is the beginning of better days ahead for this working-class, immigrant-heavy community.
Finding a home they can afford that also provides the wealth-building opportunity that homeownership offers has become a bigger challenge in today’s high-flying market for working- and middle-class families: Their incomes are too low for the booming luxury home market but too high to qualify for traditional subsidized affordable housing programs.
Housing costs are an increasingly common concern among those in her ward, says Ramirez, whose 12th Ward also includes Brighton Park. “In the last five to 10 years, it’s become unaffordable for a lot of folks who want to stay here,” she says. “We’ve heard this a lot. We need to meet their needs by creating more housing.”
McKinley Park and East and West Garfield Park are the focus of the third round of Mayor Brandon Johnson’s missing middle housing program, financed with part of proceeds from a $1.25 billion housing and economic development bond sale. Developer Urbanism Bureau was selected through the city’s request-for-application process to build the five two-flats in McKinley Park.
In January, the mayor, city officials and representatives from developer Citizens Building a Better Community officially broke ground in North Lawndale on the first missing middle projects, on South Trumbull and South Homan avenues and West Douglas Boulevard. CBBC is one of five developers selected by the city to build a total of 40 multiunit buildings in the neighborhood.
In all, the initiative’s goal is to build 250 to 400 two-, three- and four-flats as infill housing on vacant city-owned lots on the South and West sides. As of spring 2025, Chicago had more than 7,000 such lots citywide.
In addition to McKinley Park, East and West Garfield Park, and North Lawndale, missing middle projects are taking shape in Chatham, South Chicago and Morgan Park.
‘We’re losing them out of the city’
At a time of rising home prices, Chicago’s missing middle program tackles housing affordability from a different angle: providing ownership options for working-class and moderate-income individuals and families who don’t qualify for traditional affordable housing programs. These types of multiunit buildings can meet a household’s needs at lower costs, but have been shut out of the housing mix in favor of larger single-family homes, as the Chicago Metropolitan Agency for Planning notes in a new State of the Region report.
Chicago’s missing middle homes will be sold at market rates, as individual condominiums or entire buildings for buyers who want to become owner/landlords. Prices are set to attract buyers whose incomes are at 80% to 140% of the area median income: $76,750 to $134,400 for a two-person household; for a family of four, $95,000 to $167,860.
“There’s an entire sector of middle-income people who we really haven’t built for in this city in a very long time,” says Abraham Lacy, president of Far South Community Development Corp., which plans to build four three-flats in Morgan Park as part of the missing middle initiative. “In many cases, we’re losing them out of the city … because they have the income, the means to be able to move, and they believe their dollars will stretch further elsewhere.”
Stretching dollars elsewhere to buy a home has indeed become easier, as a new report by real estate brokerage firm Redfin found. Chicago-area homebuyers need 3.5% more income now as compared to a year ago to afford a median-priced home, Redfin’s data showed. But in seven of the nation’s 10 largest metro areas, the amount of income prospective buyers need has declined. Nationwide, the level of income needed to afford a median-priced home fell by 4% in 2025.
In addition to homes that working- and middle-class families can afford, Chicago needs more homes, period, if it hopes to retain residents and attract newcomers, Lacy and others note.
“As a city, if we want to get back to the level of 3 million (population), we’re literally leaving (potential residents) on the table because we’re not building enough or fast enough,” Lacy adds. Far South CDC is among the community developers selected in the second round of the missing middle initiative, and plans to build the four Morgan Park three-flats in the 10700 blocks of South Loomis Street and South Glenroy Avenue.
“One of our major problems in Chicago is we just haven’t been building housing at all,” says David Doig, president of Chicago Neighborhood Initiatives and a former top planning and housing official under Mayor Richard M. Daley. “We have a significant supply problem, at all levels of the housing price and income spectrum.”
Chicago’s missing middle initiative has a target of creating up to 750 housing units. It will need to ramp up significantly to make a big dent in the city’s overall housing shortage. Illinois has a shortage of an estimated 142,000 housing units.
So far, however, Chicago “is taking the right approach,” says Emily Bloom-Carlin, director of housing for the Metropolitan Planning Council, a research and policy organization. “In this city, we like to see proof of what works in our community.” Plus, the housing type that City Hall is focused on, two- to four-flats, have traditionally been a major part of the city’s housing mix, she added.
Thousands of these homes, which also typically provide lower-cost rental housing, have disappeared due to disinvestment and tear-downs. “So this has been really exciting for a lot of people,” Bloom-Carlin says, “to see the city prioritize something to kind of bring them back.”
Bringing ‘gentle density to a community
The term “missing middle” was coined in 2010 by urban planner Daniel Parolek as a way to describe multiunit homes — duplexes, two-flats and similar building types — designed to fit architecturally into a neighborhood of single-family houses and provide more options in walkable communities.
Such new construction brings what Bloom-Carlin calls “gentle density” to a community, allowing it to accommodate more households and build up population without radically altering the existing housing mix, as a large apartment building would.
Other municipalities, including Oak Park and downstate Champaign, have embraced the concept.
Missing middle housing is a way to meet changing needs as the Chicago region’s population shifts toward smaller households, such as seniors who are downsizing and one- and two-person households, says Ben Schnelle of the Metropolitan Mayors Caucus, which put together a regional toolkit on the concept. Eighteen municipalities are part of the caucus’s missing middle peer network.
Lacy also points to the demographic shift in Morgan Park.
“You see a lot of intergenerational households now, with people taking care of parents and children,” Lacy says. “What the missing middle can do is offer intergenerational living. If you have a three-flat, you can have your parents in one, your kid’s first apartment in another, and you get the equity. It’s a win-win.”
The concept is also on the state’s radar. Gov. JB Pritzker in 2024 appointed a committee of housing experts, developers and leaders from other sectors to examine how it might alleviate the statewide housing shortage.
Among the strategies suggested in a September 2024 committee report was zoning reform to allow multiunit housing in single-family residential areas across Illinois. In his State of the State address in February, Pritzker took action and proposed statewide legislation that, among other steps meant to tackle the housing shortage, would ease local zoning restrictions on multiunit housing and allow the construction of “granny flats” or coach houses. Previous zoning reform proposals introduced by state Rep. Robert Rita, a Democrat from Blue Island, had stalled in the state Legislature.
Zoning reform in several neighborhoods was key to the success of missing middle efforts in Champaign, where planning officials now want to allow multiunit housing citywide. In Chicago, easing zoning restrictions would make a difference, too: Research by the Metropolitan Planning Council found that only 11% of land in Chicago is zoned to allow three- and four-flats and apartment buildings, while 41% is zoned for single-family homes or two-flats.
These restrictions make it harder to build new housing in large sections of the city, including on the Far South and Southwest sides, according to MPC.
Following footsteps of other cities
In west suburban Oak Park, village officials plan a series of community workshops on housing development beginning this month, part of its goal of bringing more multiunit housing into the village of largely single-family homes.
In Champaign, several neighborhoods have seen an uptick of roughly 4,000 new housing units — most of them rentals — after the city embraced missing middle housing by eliminating stringent parking requirements and zoning restrictions for new development, as well as embracing design standards to ensure that new construction fits into the existing housing stock, says the city’s senior planner, Eric Van Buskirk. Officials now want to expand the policy changes to allow multiunit housing of up to eight units in every neighborhood, with an emphasis on building close to public transit, schools, parks, and other amenities.
Across the country, cities and states jurisdictions including Minneapolis, Salt Lake City, Houston, Sacramento, Portland, Ore., and Vermont are in various stages of implementing missing middle housing.
According to a January 2024 analysis by Pew Research, Minneapolis is a case study in missing middle program success. Beginning in 2009, the city adopted four major housing policy changes to jumpstart new housing construction and accommodate the influx of new residents. The policy shifts included zoning reform to allow more duplex and triplex construction on residential lots.
The result: While rental costs rose elsewhere in Minnesota, they remained flat in Minneapolis as housing construction increased.
The other policy reforms played a role in keeping rent prices down. But “I think the biggest thing that moved the needle is that they permitted two- and three-flats on basically all residential lots,” Bloom-Carlin says.
It’s not enough to rely solely on new apartment construction to accommodate renters confronted with ever-rising prices, as Lacy points out.
“We can build large-scale apartments all day, but those take time,” he says. “But missing middle (housing) is something that can be done relatively quickly, and begin to help drive down these (high) rental prices that we’re seeing.”
A win for renters, buyers, developers
To make inroads in the affordable rental market, prospective missing middle buyers will have to have the means, and the willingness, to purchase a building and assume the role of landlord as well as owner. Doing so is a way to build wealth and provide naturally occurring affordable housing that Chicagoans embraced in the past.
“That’s one of the kinks that needs to be worked out,” Lacy says. “If you’re going to buy a multifamily building, then do you have the sufficient capital? You’re literally buying an income-generating property and typically lenders want 20%. Now you’ve got to have probably $100,000-plus in the bank.”
He and others note that the financial help for developers — $1 per vacant lot for land and up to $150,000 in construction assistance per individual housing unit — helps lower costs that can then be passed down as savings for buyers.
“Some of the things the city is doing helps make it more accessible,” Bloom-Carlin says. “Even bringing down costs a little bit can make a difference for a family trying to buy a home.”
Another option, she says, is for lending institutions to consider different strategies for underwriting mortgages so that moderate-income buyers “could actually afford to buy these and build wealth.” Lenders, especially community development financial institutions, are beginning to think about such strategies, she adds.
Whatever small kinks need to be worked out, more housing is an essential step toward the economic revitalization that is sorely needed in disinvested neighborhoods.
“There needs to be even more of a marketing campaign to really push this program,” Lacy says. “Because this is how we’re going to get residents back in this city. Whether it’s apartments, condos, single-family homes with accessory dwelling units, the biggest thing is that you’re giving people options.”