May 16, 2016

My Rent Is What Now?! How (And Why) Middle-Income Housing Is Changing In Cities

There’s no denying that revitalization of cities is majorly on the rise. Lucky urbanites celebrate this trend with perks like new and innovative mobility options, refreshed business opportunities, civic optimizations for older citizens, shiny new living facilities with enhanced amenities, and many more neighbors to potentially befriend. Unlucky urbanites—many in the middle-income pocket—well, they can’t exactly enjoy these perks if they’re being priced out.


The origin of this burgeoning problem (which hits low- and middle-income earners the most) is multi-faceted. As up-and-coming neighborhoods are gentrified, once-affordable (and now highly desirable) housing prices go up—even for smaller units. Empty nesters and other suburbanites are drawn to move to city centers for their cultural vibrancy, which makes the market more competitive. And young people have the advantage of being able to team up and split the rent more affordably than families with only a couple of wage earners on site. (A particularly thorny issue in college towns where dorm housing is not sufficiently available or desirable.)

Then there are new developments—typically pricey from the get-go, given the limited availability and high cost of open plots on which to build, as well as the baked-in costs of construction—which are often geared towards wealthier individuals. While these new developments often have stipulations to set aside units for lower-income earners, these percentages are not often sufficient or representative of the surrounding community and its needs. 

Fortunately, cities do have subsidies, public housing, and other programs geared towards low-income citizens (although not always with the full coverage needed—a separate issue entirely).

But that still leaves a “missing middle,” where middle-income folks (whose income levels vary by city, but occupy the realm between low-income and luxury) are stuck. With upped rents, more market competition, a lack of governmental assistance for their financial bracket, and new housing options way out of their price range, they’re often forced to leave the city—one they not only love and often work in, but may have had a direct hand in making so desirable in the first place.

A number of cities across the U.S. have ideas in place to ease the “missing middle” issue—with more to come.A number of cities across the U.S. have ideas in place to ease the “missing middle” issue—with more to come.


The issue of urban middle-income affordability is widespread throughout the U.S. That’s why a whole slew of cities across the country—from Dallas to San Francisco, and Portland, Maine to Boulder, Colorado—are taking a stand to create a variety of crucial opportunities for middle-income residents in their neck of the woods. 

Several solutions being considered include: allowing developers to build more floors if they designate a larger percentage of units for low- and middle-income housing; developing condos that will be deliberately priced below market value; and annexing land specifically for middle-income housing.

Boston is facing middle-income housing woes head on, to benefit residents and businesses alike. Image courtesy of the Mayor’s Housing Innovation Lab.Boston is facing middle-income housing woes head on, to benefit residents and businesses alike. Image courtesy of the Mayor’s Housing Innovation Lab.


All of these plans are definitely steps in the right direction. But here at Zipcar HQ, we’re particularly intrigued with how the city of Boston (where the population is predicted to rise to 700,000 by the year 2030—the most residents the city has seen since the 1950s!) is planning to address this issue.

At the heart of the effort is an entire initiative—the Mayor’s Housing Innovation Lab—that’s been created to ensure that middle-income housing is affordable to build, buy, and own. (A concept that was once a reality, but to many current working Bostonians, seems little more than a pipe dream.)

The lab came about thanks to a $1.35 billion grant from Bloomberg Philanthropies to bolster data-driven innovations in Boston, and is responsible for forging public-private partnerships with developers, designers, architects, and educators, all while working collaboratively with the public to learn more from the ground up.

Working closely with the Office of New Urban Mechanics and Department of Neighborhood Development, the lab is currently rolling out four key pilot programs. Taken together, they’re aiming to make a dent on this ultimate goal: the production of 20,000 middle-income units. This is out of a total of 53,000 new units, which will include spaces for the workforce and senior citizens, and serve as a means to stabilize the market and bring housing prices under control. All of these metrics are to be achieved by 2030—and these four pilot programs begin to tackle the middle-income challenge:

1) Density Bonus Policy: This would allow developers to build more densely—to increase a building’s footprint relative to the land it sits on—in exchange for constructing more affordable units.

2) Compact Living: The lab wants to team up with architects, developers, and contractors for ideas on how to affordably build compact-living apartments. This includes a housing innovation competition and a three-month “road show” so people can walk inside compact living units.

3) Community Land Trusts: The idea here is to ensure the affordability of housing over the long term. Working with Greater Boston Community Land Trust Network, the lab looks to develop a technical assistance program for the creation of CLTs (nonprofit, community-based organizations designed to ensure community stewardship of land).

4) Home Buying Portal: The lab will launch a website where first-time homebuyers can connect with the neighborhoods, houses, and loan programs that suit them. A location guide will introduce people to different parts of Boston in order to disperse growth across the city.


We talked with Susan Nguyen, Program Co-Manager of the Mayor’s Housing Innovation Lab, to learn more about these four pilot programs and the uniquely innovative efforts (and sometimes surprising stories) behind them.

Zipcar: How did these pilot programs originate?

Susan Nguyen: When we first started to attack the problem, we wanted to be comprehensive—to see the challenges in building the home as much as in buying the home and living in it. Those proved quantifiable challenges that we could focus our priorities around and were at the forefront of what we need to do to respond to the physical shortage. 

Then there’s the larger question from the mayor and the city—how can we foster changes that allow everyone to live in the city by rethinking the role of government in overseeing housing altogether?

Zipcar: How unique is this issue of middle-income housing?

Susan: I’m sad to say that our middle-income challenge is not a unique challenge at all. Especially after the recession, there’s been this dumbbell gap, where there’s been no support in the middle. The Housing Innovation Lab is trying to support compact living and to incentivize middle-income units, while allowing the federal and state governments to work on low- and extreme low-income housing, which will forever be necessary.

Zipcar: How did this gap come about?

Susan: The gap has changed a lot over the last two decades. The total cost of developing a unit of housing (in Boston) now is exponentially higher than it was 10 years ago. Meanwhile, middle-income households’ earnings haven’t grown as much. So growth hasn’t caught up to construction costs. This is particularly true in dense urban cities with a shortage of land. A large part of the increase in cost is land availability, since land is finite. As people begin to move more in cities, land is becoming more scarce and expensive—and that all gets passed down from the land owner to the developer and eventually to the resident.

Zipcar: What current resources are available for middle-income housing—or is there a blank space you’re trying to fill?

Susan: There’s a huge void, generally, in housing subsidies. Increasing affordability across the board is really challenging—I don’t know many cities whose states have money to go towards that.

There are indirect ways that the federal government helps, like with mortgage income tax credit and first-time homebuyer programs; a lot of middle-income residents qualify for these programs and could be assisted.

But the mayor believes that not all solutions will come from City Hall—that there are better ways where we can allow creative minds and entrepreneurs to come up with solutions for us. For one thing, what are we doing to foster creativity to drive down the cost of building with construction methods?

We of course want to ensure the safety and security of our workers, the buildings, and the residents—but there’s this entrepreneur who approached us about aerated concrete, which is great for construction. So we’re wondering, does it have the same structural integrity of solid concrete? And if it does, why aren’t we using it? 

We do this with so many different innovations, so is it about concrete or all materials? And how can we help these entrepreneurs begin to test? Construction is a risk-averse industry—after all, buildings are a multimillion dollar and years-worth investment—so it’s understandable why a developer wouldn’t want to test these different approaches.

Zipcar: So who is testing this out?

Susan: There’s no way I would say we come close to being scientists ourselves, but we create fertile grounds for entrepreneurs to work on their specialties in a safe and secure manner.

So we leave the testing to the experts, but we do want to take small steps to put confidence and comfort in place, and to make these engaging connections and relationships. For example, we go visit companies and factories where these things are being built.

Right now, we’re working on commissioning a compact unit that might have some interesting technologies around movable walls, with the technology provided by a spin off from the MIT Media Lab. It is important that we can support getting these prototypes out there, have people talk about it, and even come test it out, move it around—maybe even break it! So we’re thinking about how we can allow residents to modify and change their homes as their needs change over time, and make the most out of a compact space.

Zipcar: How do you connect with the residents themselves?

Susan: When we first started, we attended more than 35 community meetings where we presented ideas and our work. We also talked to over 100 individual leaders and entrepreneurs, as well as commissioned a middle-income study with a research company. The study was focused on Jamaica Plain and Roxbury, to understand what does middle-income really mean, and what are the needs for those people within lifestyle housing.

As part of that study, we spoke to 11 residents in their homes for three hours each. We went through a series of exercises with them—how they see their home, what do they value, how do they identify (or not), what decisions went into their pasts, and what they plan to do in the future.

One of the most interesting takeaways is that people shape their home into what they need. Our society has a very prescriptive idea of what does a functioning room have—living, dining, bedroom, bathroom, kitchen. But people didn’t talk about their homes that way.

For example, there was an amazing man in Roxbury, who does most of his work at the kitchen table, which he calls his “think tank.” We spoke to a woman who worked in a wonderful apartment in Jamaica Plain, who had a gorgeous living room, but she was in love with this breakfast nook. When her book club comes by, they sit in the nook, and that’s where she spends most of her time, despite having a large, well-decorated living room.

So what we learned from these visits is that people make do with what they have—they use spaces in different ways from their original designs. So it made us think about how we can be more flexible about how we as a city prescribe housing.

Zipcar: What about housing needs for different age groups, like senior citizens?

Susan: When we spoke to the seniors about their main priorities, one consistent priority was, “Where does my family stay when they come and visit?” So seniors might be empty nesters, but when their children and grandchildren come and stay, that means that they need at least two bedrooms. And that affects affordability.

So we asked them, “What if you had only one bedroom, but there was an available room in your complex that you could rent?” And they were interested in this idea, which ties into more compact units and flexible—and therefore more affordable—living.

Zipcar: What are other components of city life that factor into the puzzle?

You can’t isolate housing as one thing. You have to think about it as one part of a whole body—where the heart, lungs, bones, and muscles all have to be running well for a body to function.

So housing is our impact focus, but public space, public art, air quality, public health, transportation, and education are all interrelated. That’s why every single one of our pilots has a very strong partner, like Boston Community Land Trusts, Cambridge Financial Technology, City Home Center, Northeastern University, Trotter Neighborhood Association, and Boston Society of Architects. And then there are many partners within that. There are a lot of pieces to keep track of, but it’s really amazing.

Zipcar: How does transit fit into the picture?

Susan: Transit is a fundamental sister to housing; people's housing choices are heavily associated with the transit options that exist for them. We have to be thoughtful in considering what those choices are.

I’m a personal Zipcar user and love you guys—I could not live in Beacon Hill if I didn’t have a Zipcar membership! But we have to think about how that type of relationship in Beacon Hill is different from Mattapan is different from Hyde Park—whether or not there’s a desire for carless or less car households, how can we make that transition, and how does that impact their cost.

Choosing to have a car as part of a development increases the housing costs—and the developer is not taking that hit, it gets passed onto residents. It does depend on whether the parking spots are underground, below watershed, if there is a structure built around with walls. But it can cost between $25–120K for just one parking spot because land and site preparation are very expensive and there’s a lot that goes into it. 

So we want our residents to be informed in their choices and to give them options. People love their cars—I’m a Californian and I love driving, but I choose not to have a car because of the constraints that I have.

Just as people like having housing choices, we want people to have transportation choices, too.

Zipcar: What are other cities doing? Are you working with them, inspiring them, or getting inspired by them in some way?

Susan: There are a number of cities that are part of the Bloomberg network that we tap into, such as Seattle, Minneapolis, and LA. We also regularly talk to leaders in Oakland, D.C., and New York in particular, especially when a lot of our work moves from prototype into policy.

Every city has its own context, but what’s true across the board is that people genuinely care about the impact of their work on middle-income households, and we all recognize that it’s a challenge.

We’re all in the same boat, all trying these different things, and we have to believe that it can be changed—that if we want to live in our city of choice, we can, and we can institute changes to make that happen.

Zipcar: How will the city look as a result of this? Will it be evident visibly or is it mostly internal?

Susan: For new construction, you’ll see supply increase, and it might also look different on the inside, in terms of unit size and composition. In existing neighborhoods, homes may not look physically different, but actual uses may change. For example, ADUs (Accessory Dwelling Units, also known as granny flats or in-law apartments) could allow residents to increase living space for a family member without impacting the physical character of the neighborhood.

Overall, there is a lot that’s changing, and it has to. Not because of the lab’s challenge, but because cities evolve and grow, and continue to do so.