New home construction in the U.S. has focused on growing the inventory of single- and multi-family homes to increase supply and affordability. But StorageCafe found that most states were overlooking one key solution to the affordability crisis in 2023: more inventory of “middle housing.”
That revelation comes from a company report released earlier this week. The report used U.S. Census Bureau data to analyze changes in housing stock in 489 cities between 2005 and 2023. StorageCafe categorized inventory changes by home type – including single-family homes, multi-family homes, mid-rise homes, mobile homes, boats, RVs and vans.
StorageCafe ranked the top cities for expanding housing stock across single-family, multi-family and mid-rise housing types. The ranking also included data on per capita housing availability, prices, employment and storage space use.
StorageCafe also sorted cities by population size, with large cities having at least 250,000 residents, medium-sized cities with at least 100,000 residents, and small cities with fewer than 100,000 residents.
The report draws a lot of attention to the growth of the stock of mid-priced housing. Mid-range housing types include duplexes, triplexes, townhomes and other medium-density housing types. StorageCafe wrote that mid-rise housing is “often touted as a potential solution to the affordability crisis. However, it has not gained any major momentum yet.”
Nationally, mid-priced homes grew by 11.3% between 2005 and 2023 – the lowest inventory increase of all property types. StorageCafe describes this discrepancy as the “missing middle,” and analysts blame zoning regulations and rising construction costs.
“Zoning laws often favor single-family homes or large apartment buildings, leaving little room for ‘in-between’ options,” says Doug Ressler, business intelligence manager at Yardi matrixthe report said. “Rising construction costs for materials and labor make building middle-income housing less profitable for developers, while limited land availability in urban areas increases the challenge.”
One city in Texas has something to say about that. McKinney – located in the Dallas area – had the fastest growing stock of mid-priced housing among the cities, growing 185% from 2005 to 2023. The mid-sized city also saw the second-largest expansion in total housing stock – up 127% to nearly 79,000 . units. The median home price in McKinney last year was $497,700.
According to StorageCafe, this expansion can be attributed in part to Texas’ statewide population growth due to increased migration to the Lone Star State, rivaled only by Arizona. Migrants are likely to focus on mid-range housing because of affordability.
“As a more affordable option – typically 30% cheaper per unit than single-family homes – the rise of townhouses and other mid-rise housing types is a response to demand for diverse and accessible housing options,” the report explains.
Allen, Texas (+182%); South Gate, California (+130%); San Marcos, California (+126%); and Gilbert, Arizona (+125%) rounded out the top five cities for median housing stock growth.
The East Coast leads all regions in median housing density and has 30 of the top 35 cities on the national list of median housing hotspots. In Reading, Pennsylvania, 82% of the total stock consists of mid-rise homes. The average home price there is $137,000.
StorageCafe notes that “in about half of the 35 U.S. cities where mid-rise housing makes up the majority of the local market, home prices remain below the national average of $340,000 – making them a win for affordability.”
