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Middle Housing Development Beyond Zoning Reform

A painting of a row of middle housing on a street

Recently, middle housing has been spotlighted as a sure way to increase housing density in established single-family neighborhoods, in addition to providing more housing variety within the city, Townhomes, cottage courtyards, and cluster cottages are types of middle housing that in theory will also offer more affordable housing options for residents (though we have yet to see this in Bellingham so far). 

While middle housing is having a moment in the limelight as the darling that can potentially solve Bellingham’s housing crisis, there are barriers to its development — like existing building regulations, design requirements, permitting and approval processes, utility subdivision rules and infrastructure impact fees, as well as financing strategies for these smaller projects.

Addressing the Barriers to Middle Housing Development

Across North America, cities, states, and provinces have lifted zoning requirements to allow multi-unit housing to be built within single-family neighborhoods. Yet, making it legal to build middle housing is just the first of many changes that have to happen before these communities will realize the end goal, which is intended to be not only an increase in housing, but an increase in affordable housing.

After decades of building regulations and housing policy centered either on single-family or multi-family zoning products, municipalities will now have to reassess and update their land development regulations and building codes to encourage middle housing and incentivize its development. 

A Missing Middle Brief by UC Berkeley's Turner Center for Housing Innovation shares feedback from a roundtable session with builders and developers who weigh-in on what municipalities can do to reduce the barriers to building middle housing. One challenge developers noted is the design requirements can prevent a project from being economically feasible. Setbacks, floor area ratios (FAR), height limitations, parking and the number of units allowed on a parcel of land in a single-family neighborhood, combined with the costs of materials, high costs of labor, and permitting timelines can make middle housing cost-prohibitive. 

Researchers reported, “One developer told us he abandoned a project in Sacramento because high land costs, coupled with generally high construction costs and requirements, made the project infeasible given the limited number of units that were allowed to be built on that specific lot.”

This developer’s experience is not unique. If the restrictions are too tight and the project won’t yield a profit, the housing won’t get built. This is applicable to any housing project anywhere. In Portland, where 295,000 new homes are needed by 2040, builders report existing regulations are hindering middle housing development. Many regulations are rightly in place to ensure public health, safety, and welfare. However, many cities have outdated land development regulations that do not reflect current community priorities, and newer, well-intended progressive regulations put tremendous pressure on project feasibility and severely affect affordability of the final product.

Because municipalities and builders are navigating largely uncharted territory with respect to how they will integrate middle housing into existing single-family neighborhoods, the Missing Middle Brief recommends that city planning departments create clear and consistent rules and processes for middle housing. Offering pre-approved, off-the-shelf plans can help builders make the development process more efficient and cost-effective. 

Financing middle housing projects is another barrier municipalities need to consider if they want to encourage the development of this housing type. Shortstack founders, Anna Mackay and Jessy Ledesma, who specialize in developing missing middle housing in the Portland area, say favorable financing for smaller-scale buildings is a systemic barrier to building middle housing.

The Middle Housing Brief researchers report, “National banks and large sources of equity—such as private equity firms or pension funds— have not been receptive to missing middle projects, either because they are simply too small in volume to justify the transaction or because these institutions view missing middle housing as risky given the lack of scale in most places.” Instead, prospective builders are looking to local banks, credit unions, and community development financial institutions for loans because these entities have a better understanding of the local housing environment and are more connected to the neighboring community.

What is Washington Doing to Address the Barriers to Middle Housing Development?

Recently, the Washington State Department of Commerce released a (draft) user guide for middle housing model ordinances in an effort to outline an approach that complies with HB 1110 and help reduce barriers to the development of middle housing. As a Tier I city, landowners in Bellingham can build four housing units on one parcel of land. But, if the lot is located near mass transit or the developer is willing to build two additional units intended for affordable housing, then it is legal for one parcel of land to have up to six housing units. The model codes address minimum setback requirements, floor area ratio (FAR), lot coverage, height restrictions, design standards, and more. Once approved, these codes will be a foundation for municipalities to build on. Bellingham can go beyond the minimums provided by Commerce to adopt their own middle housing policies.

In the draft, it is recommended that cities expand the major transit stop densities and increase the distance from a quarter mile to a half mile that residents would have to live from a bus stop. Expanding the transit stop density would allow Bellingham landowners within half a mile of a bus stop to qualify for six homes on their property.

It also recommends eliminating parking mandates for new middle housing and relaxing building regulations “to support more density, design options, and less costly housing types.” From critical areas to lot subdivisions, the document addresses the regulatory barriers to developing middle housing and offers guidance for officials as they begin the process of updating their zoning codes. Importantly, the guide notes:

“When crafting development standards, dimensional regulations, fee structures, and process requirements it is important to consider what the desired outcomes are for these housing types. Is the community trying to create more lower barrier opportunities for first time homeowners? Create more housing in high-opportunity locations? Increase the variety of housing built across the city? Leverage other housing programs to support affordability? These types of questions around desired outcomes are a helpful place to start to make sure that regulations advance desired outcomes.”

These are just a few of the questions we need to be thinking about so that when given the opportunity, Bellingham residents can weigh-in on the implementation of middle housing regulations. The deadline to comply with the middle housing code updates is six months after the next periodic Comprehensive Plan update, which should be by July 2025 for Bellingham.


Housing for Bellingham is a community resource that works to explain the fundamental processes and terminology associated with housing-related decisions in effort to inform the public. When the people understand land use planning processes and terminology, everyone can make more informed decisions about housing and land use policies in their communities.



Contact your Bellingham City Council representative and tell them you support a proactive plan for sustainable growth.

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