Scaling Up Missing Middle Housing
Our articulation of the problem
I am sharing a few more details about the company I want to start with my friend
, a Georgetown econ Ph.D. who co-founded Free Our Vote. Alex reached out to me after reading this guest piece on ’s blog about the difficulty small developers and small projects have securing financing.
A successful business starts with asking the right question. After speaking with various real estate practitioners, our articulation of the problem Coby identified is:1
The Financial System Underserves Missing Middle Housing and Small Developers
Missing middle housing, from duplexes to small apartment buildings up to 50 units, is rarely developed today, despite its wide appeal and the U.S. housing shortage of at least 2 million units.
Even where zoning is not an obstacle, developers struggle to secure financing for missing middle. Community banks have consolidated, leaving fewer loan officers who have personal relationships with local entrepreneurs and knowledge of the regional economy. Lenders are overly conservative, requiring lots of parking even where local governments require none. Small developers also struggle to win lenders’ trust, even if they have successfully executed multiple projects. The financial and development industries have become overly institutionalized.
To scale up, economically viable medium-density infill projects need a new type of lender.
We are looking for a partner with real estate development experience, and for collaborators who are passionate about underwriting or knowledgeable about SEC compliance. To discuss your interest in our project or learn more about it, please email me at lucagattonicelli@substack.com or hit the button below.
And if you know someone who might be interested, please share this post with them.
Thanks to my 347 subscribers, especially my 10 paid subscribers. If you enjoy this blog or want to work together, especially on my concept for a real estate financing platform, please contact lucagattonicelli@substack.com. I would love to write about a reader-suggested topic. Check out YIMBYs of Northern Virginia, the grassroots pro-housing organization I founded.