Daniel Parolek is an architect, urbanist and the founder of Opticos Design, which has been working in urban placemaking and master planning for two decades. Daniel is best known for framing the idea of ‘missing middle housing’ just as the critical absence of affordable housing was becoming a major planning issue for cities nationwide.
The ‘missing middle’ can be broadly defined as those housing types in between single-family detached and large apartment complexes. This means multi-unit housing types, such as duplexes and fourplexes, bungalow courts and mansion apartments, all of which were typically mixed in with single-family homes in pre-war city neighborhoods. Daniel has thus become a high-profile advocate for zoning reforms that would allow ‘the right kind of density.’ More people, less parking, walkable neighborhoods, broader demographics.
Daniel’s new book, Missing Middle Housing – Thinking Big and Building Small to Respond to Today’s Housing Crisis, is a how-to book exploring these issues, just came out this year. Daniel also co-authored the book, Form Based Codes (2007), and is a member of the founding team of the Form-Based Code Institute (2004), a nonprofit think tank working to bring back traditional urbanism through zoning reform. His firm, Opticos Design, has been a triple bottom line B-Corp since 2007.
Insights and Inspirations
- There are some serious barriers to building the ‘missing middle housing’ types.
- Antiquated zoning systems need to be reformed and NIMBY-ism needs to be controlled.
- Communication is key in terms of over-coming misconceptions about up-zoning and increased density.
Information and Links
- Opticos is currently working on the master plan and architecture for Culdesac Tempe (yes, it’s ironic), which will be the largest car free community in the United States when built next year.
- Missingmiddlehousing.com is the web portal for all subjects on missing middle housing.
- Daniel wanted to highlight B-Corp/B-Lab as a great community of triple-bottom line companies of which his firm is a part.
- He also wanted to sing praise for Richard Rothstein’s, The Color of Law (stay tuned on this one, by the way), on real estate, segregation add government policy.
Read the podcast transcript here
Eve Picker: [00:00:12] Hi there. Thanks so much for joining me today for the latest episode of Impact Real Estate Investing. My guest today is Daniel Parolek. Daniel’s an architect and rising star urbanist. His firm, Opticos Design, has been working in urban placemaking and master planning for two decades now. But Daniel is best known for framing the idea of “missing middle housing.” Just delivering more housing is not enough, says Daniel. We need to think about how this housing reinforces a high quality built environment, and how to provide a range of housing for all segments of the market, including moderate- and low-income households. Daniel’s new book, “Missing Middle Housing: Thinking Big and Building Small to Respond to Today’s Housing Crisis,” is a how-to book exploring these issues. Please listen in to our fascinating conversation, and if that’s not enough, be sure to go to EvePicker.com to find out more about Daniel on the show notes page for this episode. You can sign up for my newsletter to access information about impact real estate investing and get the latest news about the exciting projects on my crowdfunding platform, Small Change.
Eve: [00:01:44] Hello, Daniel. I’m really excited to have you on my show.
Daniel Parolek: [00:01:48] Thank you, Eve. I’m really excited to be here.
Daniel: [00:01:50] Good. I wanted to dive right in and talk about what’s wrong with housing and housing choice in the U.S. today. And you coined a phrase that’s really widely used now, and that is “missing middle housing.” And I’d love to know what that is. What is missing middle housing?
Daniel: [00:02:10] Yeah, it’s a great starting point. So, it’s a topic I’m obviously very passionate about. And the reason that I decided to emphasize, and and I coined this term back in 2011, is I wanted to help emphasize and frame a conversation about the broad range of housing choices that the market is wanting and needing, that the development industry is not delivering, in any market across the United States. And historically, right, we’ve done a really great job of defining policy, creating zoning, and creating development industries that can deliver single-family homes in large quantities. So, we’ve done a really great job with that over a series of five or six decades. I’d say over the course of the last couple of decades, starting in the early 2000s, really, in the United States, cities started figuring out how to plan for, and zone for, in the development industries and financial industries. Figured out how to deliver, the larger, you know, five, six, seven-plus story condos, a mixed-use or apartment buildings. What the missing middle is, is it’s all of these housing types in between those single-family homes, such as a duplex, a fourplex, a cottage court, a small courtyard apartment, that existed in neighborhoods prior to the 1940s and delivered a broad range of price points and types of housing. And, really since the 1940s, put barrier after barrier in place for the delivery of these. So, starting in the 1970s, based on some research we, I did for my book, an American Housing Survey, there has been a steady decline in the percentage of overall housing that is missing middle since the late 1970s. And I think, in 2013, the missing middle housing, which I define, and it sort of ties into the categories of an American Housing Survey, as 19 units or less per building. But typically it’s really kind of that eight-unit or less. Less than three percent of housing delivered in 2013 was missing middle housing. And so, what we’re seeing is that there’s a shift in demand in the markets and people want walkability. They want mobility choices. They want more compact living. They want access to goods and services around the corner from their households. But that sort of lifestyle in home is being delivered less and less.
Eve: [00:04:44] So, the question I have really is why is that? I mean, we, you know, I suspect some of it is financing, but …
Daniel: [00:04:53] Yeah.
Eve: [00:04:54] … why has it, you know, why has it declined so much?
Daniel: [00:04:57] One of the things I really enjoyed about writing my book is I got to actually sit down and do some research and write a chapter on the many barriers that are in place for the delivery of missing middle. And, you know, we could talk for a couple of hours just about those barriers. But I think the real starting point for a good conversation about why they’re not being delivered really starts with antiquated zoning. We’re utilizing a zoning system that was created over, as an operating system, that was created over 100 years ago.
Eve: [00:05:29] You know, the more I do these podcasts, the more zoning seems to be the root of all evil.
Daniel: [00:05:37] Yeah. I sort of often ask the question when I’m talking to an audience of like how many operating systems that are 100 years old are we still using? And there’s very, very few of them. But zoning is one of them. So, actually, starting 20 years ago when I started my firm Opticos Design, one of our real focuses was pushing for zoning reform, because both with our developer clients as well with our clients that were cities, we were finding that everybody wanted the right kind of projects, but the zoning was in the way. Now, that’s just one of many barriers, as I mentioned before, right? That’s, there’s everything from, right, there’s construction defect liability that makes it really hard in many states, or risky, I will say, in many states for developers to build condos at the missing middle scale, just too much risk to sort of warrant taking that type of condo project on, right? It’s really hard for developers to finance condos, and for households to purchase condos. It’s just not an easy system that’s set up …
Eve: [00:06:45] Right.
Daniel: [00:06:45] … in the same way as you can buy a single-family detached house.
Eve: [00:06:49] Yeh, I built a built an eight unit condo building years ago. And it was pretty miserable.
Daniel: [00:06:55] Yeah. And obviously there is, you know, community pushback from, you know, this whole NIMBY conversation that’s happening, that there’s just a lot of communities that are kind of afraid of anything that’s not in single-family detached. I think a big part of why the missing middle concept has spread so broadly is that it’s giving communities a way to talk about the need for a broader range of housing choices without using these intimidating and scary terms like density or multifamily or upzoning, but rather talking about a cottage court. Like how can a college court be that intimidating to somebody, and personalizing those stories. Because most people, when we’re talking about this in communities to try to build support, have either lived in one of these types, they have kids that have lived, or are living in these types, or a relative or a good friend. Or maybe there’s a duplex right around the corner on their block that some of their friends live in. So, that, we find that sort of shifting that conversation away from some of this terminology like density that brings really negative perceptions to people’s minds is a really important way to kind of remove that community pushback barrier.
Eve: [00:08:11] Right. So, you talked about a decline since the 1970s, but I mean, these zoning systems were already in place. So, what prompted that moment in time for people to stop building that way? Because zoning had already been pushing against it for a while, right?
Daniel: [00:08:31] Yes. Zoning in the United States really started in the late 20s, sort of through the 30s and early 40s in terms of its initial application. And what I would say is I don’t actually know and I don’t know of anybody that’s done the research to understand why there was such a specific threshold or turning point in the 70s to shift this. I mean, it must have had to do with federal funding or federal programs. But I don’t, I don’t actually know the answer to that. But it would be really, it’s a good sort of research project for a graduate student to take on for sure.
Eve: [00:09:06] It does align with, you know, suburban flight, which was happening around then. Certainly, the city I’m in, and many others, 70s and the 80s were kind of that moment in time where people left inner cities and went to the suburbs where there are many more single-family homes. And so, maybe the demand just increased then.
Daniel: [00:09:29] Yeh.
Eve: [00:09:29] They left the inner cities, which probably had more of the housing types that you’re talking about, the missing middle, right?
Daniel: [00:09:35] Yeah, absolutely. Many American cities by the, sort of, 1970s were in a pretty large state of decline or had seen several decades of decline and disinvestment. So, I’m sure that was part of that. And so, it was just a much more rational or easier choice for households to buy that single-family detached house in the suburbs. One of the things I like to talk about is that I feel that it’s really time, just based on the affordable housing crisis that we’re having across the country, this shift in demand and what households are looking for. Chris Nelson did a, some great research for my book and he wrote a chapter – he’s a, he teaches at the University of Arizona – that found that 60 percent of all housing built between now and 2040 would need to be missing middle in walkable urban context to meet the demand.
Eve: [00:10:34] That was my next question for you, actually …
Daniel: [00:10:36] Yeh.
Eve: [00:10:36] … that was actually, you know, how much can that address the deficit? That’s interesting.
Daniel: [00:10:41] Yeah. And we, you know, I think we can all acknowledge that the industry isn’t just going to all of a sudden shift and sort of shift in delivering 60 percent of housing and missing middle and in walkable urban context. But that’s what it would take. So, it’s a pretty, pretty dramatic number. And I think it’s just a really strong call to action for planners, for city decision makers, for federal housing policymakers, development industry, to just think very carefully and play their role in sort of this shift, this dramatic shift, that needs to happen. And really delivering what households across America want as home in the 21st century, which is very different than what households wanted in the 50s, 60s or 70s. And we’re still kind of hanging on to that single-family detached home mantra, which is not what households are looking for these days.
Eve: [00:11:41] So, I’m wondering, like, what’s the big fix? How does this shift really happen? I mean, you have a number of things that need to be addressed. How do you take that on so that you can start building these types of products again?
Daniel: [00:11:55] Yeah, I think that it’s a little bit intimidating. There is a tremendous amount of change that needs to happen, right? It’s not just a change in the development industry. It’s change in city policy, city zoning, development industry, financial industries, federal housing policy. But what I would say is that there has been some tremendous progress in the last year and a half, that because cities have failed to make the changes in their policy and zoning that are necessary, so, like the state of Oregon last year passed statewide legislation, it’s called HB2001, that allows up to three or four units on any lot, statewide, even those that are zoned for single-family. So, that was really a major milestone in sort of removing those barriers.
Eve: [00:12:45] Yeh, and I have been offering on my website that actually went live today that takes advantage of that zoning law.
Daniel: [00:12:53] Yeah, I think that’s a tremendous opportunity. The city of Minneapolis did something similar city-wide, allow up to three units …
Eve: [00:12:59] Yeah.
Daniel: [00:13:00] … per lot. And state of Nebraska, even, my home state, recently passed the Missing Middle Housing Act, which will allow multiple units on all lots, across the country. So, that’s happening, I would say that from the development industry standpoint, I see the most change from outside of kind of the typical players. I think it’s new players coming into the real estate industry, a lot of it tech-influenced. I guess this whole prop tech influence, I think is likely what’s going to have the most impact, because I see an inability or reluctance to change in a lot of the major development players, the reluctance or inability to change at a pace that is actually necessary. And, you know, there’s a lot of innovation happening on alternative construction delivery systems, whether it’s prefab or modular or, you know, like how do you deliver housing quicker, more cost effectively? And I think there’s a lot of change happening. It’s just a lot of it hasn’t been proven yet, and is kind of having a hard time to scale up. So, I think all of those are interesting shifts that are happening.
Eve: [00:14:09] Yes. So, I want to go back to the statewide legislation.
Daniel: [00:14:13] Um hmm.
Eve: [00:14:13] So, when the state legislates you can now put up to four units on a lot …
Daniel: [00:14:18] Um hmm.
Eve: [00:14:18] … but zoning doesn’t change. What does that look like? When you have typical single-family house setbacks and statewide legislation that now says you can squeeze more into the site? How does everyone manage that?
Daniel: [00:14:35] Yeh. So, as part of that legislation, as it requires the local jurisdictions to change their zoning by a specific time, in a specific time period. And so, like the state of Oregon right now is going through a large process where they’re providing grants to local jurisdictions to change that zoning and they’re creating a model code.
Eve: [00:14:54] That’s expensive.
Daniel: [00:14:56] Yeah, and it’s not simple.
Eve: [00:14:58] No.
Daniel: [00:14:58] It’s not simple. And what I see is, and I noticed that there was, I think it was a podcast or blog post on your site about the barriers of parking requirements …
[00:15:10] … you can have on housing and the cost of housing. And I think it’s going to be really interesting to see, because I don’t think it was specifically part of the legislation that local jurisdictions had to remove or reduce parking requirements, and based on our work, both with cities and with developers, we found that it’s absolutely necessary for cities to, ideally, remove and at least dramatically reduce their parking requirements to really make missing middle feasible.
Eve: [00:15:39] You know, I interviewed Donald Shoup.
Daniel: [00:15:41] Oh, yeah.
Eve: [00:15:42] Who basically says, you know, those thousands of pages of parking requirements and zoning laws should be replaced with one line. Parking not required.
Daniel: [00:15:52] Yes. Yes. Yeah. And I know you you focus and talk a lot about sort of mobility choices. And I like that your change index, that you use to score projects, really focuses on sort of these walkable, urban mobility-rich contexts, which is fantastic. And I feel like the demand for that walkable urban living, and I think that’s a term Chris Leinberger coined, and I know he, you interviewed him …
Eve: [00:16:20] Yes.
Daniel: [00:16:20] … is, it’s like a third of baby boomers, which is the largest market segment, and two thirds of millennial households, want this walkable urban living and, right, it’s a really simple supply and demand equation that you have a really high demand and a low supply that’s not really growing. Like it’s a really, I’m not an economist, but it’s a pretty easy, basic economic equation that sort of is going to, the response, or the result is going to be really unaffordable, high-cost housing in those areas that are delivering that walkable urban living. And we’re working on a project right now called Culdesac Tempe, which will be the largest car-free community in the country when it’s built next year. And it’s in Tempe, Arizona. And the developers, our clients, their name is Culdesac, it’s obviously an ironic name.
Eve: [00:17:14] Yes, it is.
Daniel: [00:17:14] They believe very strongly that there is a demand for this car-free living and they have more deposits from interested renters than they have units in the first phase. And they have, I think …
Eve: [00:17:30] Wow.
Daniel: [00:17:30] … something like 3,000 interested renters signed up to lease future phases. And so, it’s proving that there’s a really strong demand for choice. I think it’s really about …
Eve: [00:17:43] Yes.
Daniel: [00:17:43] … providing a choice. And even in the Phoenix Metro, the one of the most auto-centric places in the country, that you can deliver this car-free living and people are super-interested in it, and it’s …
Eve: [00:17:55] Well, probably because the product they can afford to build is probably higher quality because they don’t have to add in parking spaces, and the cost of those. And the person renting those apartments also doesn’t have to pay for the cost of those. It seems like it’s a win-win, if you can locate living units close to transit …
Daniel: [00:18:16] Yeh.
Eve: [00:18:16] … it’s just better for everyone.
Daniel: [00:18:18] Yeah, it’s along the light rail line.
Eve: [00:18:21] Oh, that’s fabulous.
Daniel: [00:18:22] They’re, you know, being very thoughtful about bikeshare stations, electric scooter stations, you know, pick up and drop off from the, you know, Lyft and Ubers of the world. And they’re, you know, even getting funding from tech companies that are testing some of the technology within the project, things like delivery, you know, robot delivery, and, you know, delivery of groceries and things like that. So, it’s kind of a testing ground of sorts. And yeah, it’s, absolutely they’re not having, so, you know, if they’re having to build even one parking space per unit, right, you know, it would end up needing …
Eve: [00:19:03] A lot of land.
Daniel: [00:19:03] … a parking garage, a big expensive, at 30 or 40 grand per space, and a lot of land. And as the master planner of that project, you know, it just opened up so many opportunities to create the most high quality public spaces. 60 percent of the project is public space because, because cars are having to slice through the project or being parked on the project, and the housing types we were able to create our courtyard based. They’re very responsive, both the plan and the housing types are responsive to the desert climate. And so, it’s a really compact urban design …
Eve: [00:19:42] Interesting.
Daniel: [00:19:42] …and really narrow asseyos and courtyard housing that’s focused on, you know, comfort in the hot season, but also fostering a really strong sense of community as well …
Eve: [00:19:53] Wow.
Daniel: [00:19:53] … which is a big goal of the project.
Eve: [00:19:55] So, is this typical of the work you do it at Opticas?
Daniel: [00:19:58] Yeah. So, yeah, it’s, we’re, about half of our work is with cities. And so, with those cities we’re doing, usually doing urban revitalization, transit oriented projects, you know, downtown plan, corridor revitalization plan, new transit, sort of thinking about the impact of future transit and how a place might evolve. And that entails everything from, you know, the community participation process, the sort of visioning, sort of what’s the defining the future form of the physical environment, as well as rewriting the zoning. And then the other half of our projects are with developers. And the types of developers we work with are, tend to be the more innovative, forward thinking developers who really want to do something that’s not being delivered in a market.
Eve: [00:20:46] Um Hmm.
Daniel: [00:20:47] And so, the Culdesac Tempe project is a super exciting one. We’re, we’ve also delivered the country’s first missing middle neighborhood. It’s in the Omaha, Nebraska, Metro in a small town called Papillion, Nebraska. And it’s a 40-acre neighborhood created with buildings that are no more than eight units per building. And there’s now 132 units built and the market is responding super well. It’s performing financially very well for our client. And he is super excited. He can’t build fast enough to keep up with the demand for it.
Eve: [00:21:22] Wow.
Daniel: [00:21:23] So, it’s exciting to see that. And it’s transforming a somewhat suburban context into a more walkable context. And part of that is we introduced a small neighborhood main street that has flex spaces on the ground floor of the live/work units that have incubated a small pizza shop, small yoga studio, sounds like a coffee shop may be coming shortly, sort of got stalled due to Covid. But it’s just, we just get excited about those sorts of projects that can sort of move the bar. And that projects redefining what Class A multifamily can look and feel like. The Culdesac project is proving that car-free living, there’s demand for it and, you know, like our, we did a project in the Salt Lake City region for one of the largest builders in Salt Lake City that basically enabled them to deliver a high quality for sale housing choice to entry-level buyers that they couldn’t figure out how to deliver, and weren’t able to deliver, even with a fairly conventional tuck under townhouse product type. So, yeah, we’re having a lot of fun.
Eve: [00:22:37] It sounds like, it sounds like a lot of fun.
Daniel: [00:22:40] Yeah.
Eve: [00:22:41] So, what led you to this work?
Daniel: [00:22:44] Yeah, it’s really interesting and sort of looking back at it and I sort of wrote the foreword to my book that sort of talks about the evolution of missing middle and my interest in walkable urbanism, sort of over the course of my life. And it’s interesting because I do feel it really starts with growing up in a small town in the Midwest that was actually very walkable and very bikable and sort of kind of quintessential small town urbanism that functioned in a lot of ways, like neighborhoods function in larger cities …
[00:23:18] Um hmm.
[00:23:18] … a vibrant main street, you know, could bike across the town at the age of six or seven. And so, that planted the seeds. My grandmother,sorry, my great-grandmother, actually lived in a duplex, a block and a half from the small main street of my town. So, right, that was an introduction to sort of different housing types and housing choices. And I, you know, I have an undergraduate degree in architecture from the University of Notre Dame, and I was fortunate enough that it was one of the few programs in the country that, as part of the focus of the program, teaches urbanism and trains you in good urbanism just as much as architecture. And I’ve lived in a number of places across the country like Chicago, Park Slope in Brooklyn, that these neighborhoods that had a really great mix of these missing middle housing types …
Eve: [00:24:07] Um hmm.
Daniel: [00:24:07] … and ended up coming out to UC Berkeley to get a master’s degree in urban design and just had a really amazing faculty here that, a group of mentors that enabled me to explore this, this concept of these housing types. And as soon as I graduated from that program, I opened Opticos, which, you know, in 2000, we wrote our first zoning code that had the, we didn’t call them missing middle at the time, but it had cottage courts and courtyard apartments …
Eve: [00:24:38] Um hmm.
Daniel: [00:24:38] … that were embedded in that zoning code. And, at that time, the planners, you know, thought we were really crazy. They didn’t know what we were, they were like how can, you can’t do this. This isn’t the way we do this. And at this point, I would say that the approach which is, in what we call “form based coding,” is fairly common practice. A lot of cities are doing it. Cities are asking for it. Cities are realizing it’s a more progressive and thoughtful way …
Eve: [00:25:08] Yeh, yeh.
Daniel: [00:25:08] … to approach zoning. So, I think over the course of my life, it’s just that my understanding has evolved and it’s been part of my daily life and part of the, our, my architecture and urban design practice, and even the neighborhood I live in now in Berkeley, California, about 20 percent of the lots have missing middle types. And what that does, it allows my son’s first grade teacher to live in a triplex. Her mother lives in one of the other units and she’s also a teacher at that neighborhood school. And the third unit is occupied by my daughter’s middle school physical education teacher. So, right, it’s, it’s functioning and it’s delivering that attainable housing choice in my neighborhood.
Eve: [00:25:53] Right.
Daniel: [00:25:54] And this is, it is just good to personalize stories in that way.
Eve: [00:25:57] Yeh, it is. So you’ve been doing this for a while and there’s always things that work really well, better than you expect, and things that don’t work so well. You have any stories about those?
Daniel: [00:26:07] You know, we found that it’s actually a little bit hard for a lot of cities and their planners and sometimes their decision makers to make this mental shift to a conversation about form and scale and desired building types and away from density and FAR and these other metrics that zoning has been so reliant on. And it’s, the transition hasn’t been as smooth as I would have imagined when I wrote my book “Form Based Codes,” I think it was in 2009 it was released. I would have hoped by now that this would have become, there’d be, you know, hundreds of really highly-qualified practitioners and planners out there writing really high quality form based codes. But it really hasn’t. It’s happened very slowly and so, way more slowly than it needs to be happening. And I think the same is it’s, the level of change that’s necessary within the development industry, it’s hard, you know, we’ll get clients that that call us and say, you know, we really like this idea of missing middle, but when push comes to shove, we’re saying, well, you really need to be OK with only providing one off-street parking space per unit and letting the on street parking deliver that second space and they’re just, sort of, it’s just, takes them outside of their comfort zone to the point where it’s not going to really deliver the choice and the quality of living that we feel is necessary or the type of living that the market is demanding.
Eve: [00:27:29] I mean, I really have to wonder how much of that is driven by, you know, pretty traditional financial institutions, and I’ll probably sound a little bit like a broken record on this. But I know that, you know, when you go to a bank that hasn’t seen a product like the one you’re trying to build before, it’s, it can be sometimes almost impossible to get it financed. And without financing, you don’t have a project. So…
Daniel: [00:27:52] Yeah.
Eve: [00:27:53] … is that kind of the last frontier? Banks? I don’t know.
Daniel: [00:27:57] No, I think it is, because, right, you’re right. If there’s not a comparable project in the market, right, it’s it’s hard for a bank to go outside of their comfort zone to say we’re going to finance that project.
Eve: [00:28:11] Yeah, they need appraisals …
Daniel: [00:28:12] Yeah.
Eve: [00:28:12] … and the appraisals need three like-kind properties. And then they need to see that you, you know, you have all the approvals and entitlements that you need. It’s pretty complicated pieces.
Daniel: [00:28:25] Yeah. And I do feel that, you know, what you’re doing with the crowdfunding at Small Change can really benefit the application of missing middle housing, because, you know, what those innovative small builders/developers that are looking for that capital, I feel like, you’ve provided that platform.
Eve: [00:28:46] Yeh, so we did, you know, one in L.A. that might interest you, that is a bungalow court project. Eight units in courtyard style. It hadn’t been built, I think, since the 1950s and very much in line with this missing middle, except that they, they built it as homeless housing, which is also good.
Daniel: [00:29:05] Yeah, it’s, I noticed that Bungalow Gardens project, and that’s really at the heart of missing middle housing types. It’s a really fantastic type that we delivered historically in neighborhoods that we, it’s almost impossible and illegal to build in most cities, that … it seems so basic. And, but there are so many barriers in place. And, you know, we launched missingmiddlehousing.com in 2016 because there was such a growing demand and interest on this topic. And, I can’t remember what the numbers, but there’s a large volume of visitors to that site, sort of on a weekly and a monthly basis. And it just shows that there’s really strong interest in …
Eve: [00:29:52] Yeah, yeah.
Daniel: [00:29:53] … in this idea of exploring, you know, what are some of the tools that cities and planners and developers can put in their toolbox to address this gap between the type of housing this market wants, and I feel like one of those tools, definitely, especially for the delivery of missing middle, is and, I think this crowdfunding you’re doing is great, so …
Eve: [00:30:14] I hope.
Daniel: [00:30:18] Yeh, it’s, and I think it’s just, it’s the type of innovation that, sort of rethinking the way we’re doing things that, you know, needs to be happening.
Eve: [00:30:27] Yeah.
Daniel: [00:30:28] Yeah.
Eve: [00:30:28] Just out of interest. Are there any other current trends in real estate development that you think are really important for either the future of housing choice or better cities, things that you’ve been watching?
Daniel: [00:30:42] There’s a couple of things. I think that we really need to figure out how to deliver walkable urbanism in new communities. And there, in addition to zoning, there’s a lot of other barriers, starting with street designs, infrastructure, or sort of utility requirements. So, there’s a long list of barriers. But I think that, you know, we’ve been talking about it for a while here in terms of more sustainable development patterns, but we haven’t made a lot of progress. I would say we’re still battling the same battles, project by project, that we were 20 years ago in terms of trying to remove some of these barriers – the zoning, the thoroughfare designs, push back from communities. So, we need to figure out a way to continue to make progress as more and more households either choose to rent or need to rent. I think we do need to figure out how to deliver a broader range of choices in rental housing. And like our Prairie Queen neighborhood in the Omaha Metro, I think it’s showing there is a strong demand for a more sophisticated renter that’s looking for a neighborhood, high quality living in a neighborhood, not just a multifamily project that’s clustering housing together. And I think that’s partly why the single family home rental market has taken off so broadly. And I think the primary reason is that renters aren’t being given a choice other than the conventional multifamily …
Eve: [00:32:06] Yeh.
Daniel: [00:32:06] … or sort of the urban product type. And I think that missing middle can slip in there and provide a type of living that they’re looking for. On the for sale side, I think we just need to figure out a way to deliver smaller scale condominium choices at this missing middle scale, and that fourplex, you know, eightplex, even cottage court scale, both in terms of financing, in terms of zoning, in terms of households getting mortgages. So, I think those are the things that I often, …
Eve: [00:32:36] Yeh.
Daniel: [00:32:36] … you know, reinforce as real needs out there to really respond to this, the growing need.
Eve: [00:32:42] Yes, yeah. Well, I hope I get to visit the car-free Culdesac project sometime soon. That would be a highlight for me.
Daniel: [00:32:50] Yeah.
Eve: [00:32:51] Sounds fabulous. And I can’t wait to hear what’s next for you. So, thank you very, very much for joining me.
Daniel: [00:32:58] Thank you. I’ve really enjoyed this conversation and I look forward to future conversations.
Eve: [00:33:23] That was Daniel Parolek. He’s taught us all about the missing middle, broadly defined as housing in between single-family detached and large apartment complexes. We’re talking about multiunit housing types such as duplexes and fourplexes, bungalow courts and mansion apartments, all of which were typically mixed in with single-family homes in pre-war city neighborhoods. Post-War developments, by contrast, focused on single-family zoning, driven by the growth of the suburbs and many cities ended up restricting the building of new multiunit structures. So, Daniel is a strong advocate for zoning reform to bring back that missing middle.
Eve: [00:34:19] You can find out more about impact real estate investing and access the show notes for today’s episode at my website, EvePicker.com. While you’re there, sign up for my newsletter to find out more about how to make money in real estate while building better cities. Thank you so much for spending your time with me today. And thank you, Daniel, for sharing your thoughts. We’ll talk again soon. But for now, this is Eve Picker, signing off to go make some change.
Image courtesy of Daniel Parolek