The ‘missing middle’ is a huge driver of the housing crisis. This Chicago developer wants to fix it

A new affordable housing project in Chicago is trying to do what few others can: develop homes for families earning the city’s median income.

It’s a type of housing referred to as the missing middle. While affordable housing developers use subsidies to build out small, low-priced units for people on the very low end of the income spectrum, and for-profit developers focus on the luxury side of things, there’s a lack of housing being built that’s big enough but also cheap enough for families that are neither rich nor technically poor.

This new development in Chicago’s East Garfield Park neighborhood aims to fill in that missing middle, and is using a new approach to get there. Harrison Row Townhomes is a 40-unit project, with both three-bedroom and four-bedroom houses, each priced at about $245,000, compared to the citywide median home price of $315,000. The homes comply with the city’s Affordable Requirements Ordinance, which requires developments of 10 or more housing units to set aside a certain amount at affordable prices. For developers, meeting this requirement has been easiest and cheapest with studios and one bedrooms. Structured Development, the Chicago-based company behind this new project, is trying to turn that tide.

“The trend has been toward smaller units that you can get a higher rent per square foot and more units to make the economics work,” says J. Michael Drew, founding principal of Structured Development. “There was nobody producing anything that would provide for family living because the cost of producing larger affordable units was prohibitive.”

That was almost the case with Harrison Row Townhomes. The first phase of the project included seven homes, all made by typical construction, with workers onsite building them up piece by piece over the course of eight months. As often happens, it took longer than expected, and the costs rose. “We had the typical issues of a stick building, which is weather, delays, interference, some security issues,” Drew says. “When we built them, I looked at it and said, ‘I’ve got to find a better solution.’”

For the remaining homes in the project–three-bedroom townhomes, including 28 duplexes–Structured Development turned to modular construction. The duplexes will all be built by Kinexx Modular Construction, a Chicago-based builder that uses a factory-based approach to build cube-like modules that get stacked and connected on the building site. This approach makes the second phase of Harrison Row Townhomes cheaper and faster to build, which will help ensure that the homes can be priced to meet the needs of families currently looking for that missing middle housing. It joins other efforts in this neighborhood to address the missing-middle housing challenge, including one project that was built on a city-owned empty lot.

From the start of assembly in the factory to the completion of the home on the construction site, the modular duplexes of the Harrison Row Townhomes will take just 90 days each to build. The first is nearing completion now.

“By the end of six to eight months, we’re going to be putting 28 homes in the ground,” says Josh Braun, CEO of Kinexx Modular Construction. “I would challenge a site builder to be able to accomplish that.”

Drew says the homes that Kinexx builds in its factory are virtually indistinguishable from the stick-built homes from the first phase of the project. “The finishes are typical of a market rate home. The construction, in my opinion, is superior because of the controlled environment,” he says. “The advantage to a developer like us is the exposure out at the job site is limited to basically about a 30-day period.”

That’s made it easier for the project’s economics to work out, according to Drew, especially in a part of Chicago where developers have been less likely to build affordable family homes. Drew says his company is hoping to spur more of this type of development in East Garfield Park by entering a joint venture with a small, local, Black-owned development company, Fain’s, which will have an ownership stake in one of the duplexes in this second phase of the project. “In doing so, they would be able to hopefully learn the development process, establish their credit, and make a profit,” Drew says.