MISSING MIDDLE HOUSING ACT

The Missing Middle Housing Act is a bill drafted to be proposed in the Massachusetts legislative cycle beginning in 2027. That means we have more than a year to mobilize support through grassroots networks and electoral activism.

Below are excerpts from the four, key operative sections of the Missing Middle Housing Act. They are annotated by the drafters to provide clarity, indicate examples of similar successful models, and highlight compromises that make passage a feasible political goal. The four operative passages are:

Statewide Zoning Baseline: requiring an as-of-right missing middle zoning district in every municipality
Missing Middle Housing Gap Fund: creating a fund managed by the Executive Office of Housing and Livable Communities (EOHLC)
Missing Middle Housing Gap Financing Program: directing the EOHLC to administer a gap financing program for the construction or renovation of missing middle housing
Excise Tax: establishing an excise tax of 1% on the sale of real property—with certain exemptions—to finance the Missing Middle Housing Gap Fund

The full, formatted text of the bill can be found here:

DOWNLOAD THE FULL BILL

Part 1: Statewide Zoning Baseline

The first portion of the Missing Middle Housing Act requires municipalities to establish minimum zoning regulations that permit “missing-middle housing” as-of-right within a designated district or overlay zone. It establishes baseline zoning standards (lot size, height, density, and parking limits) for modest-scale multifamily housing and authorizes the Executive Office of Housing and Livable Communities to issue guidelines and a model zoning code to assist municipalities in adopting compliant zoning regulations.

If a municipality fails to comply, conflicting local ordinances are of no force and effect and are preempted by the legislation.

SECTION 10. Said chapter 40A, as so appearing, is hereby further amended by inserting

1. after section 3B the following section:-

Section 3C. Missing middle housing zoning as of right

(a) (1) A municipality shall have a zoning ordinance, by-law or

overlay district that permits missing middle housing as of right.

The zoning ordinance, by-law or overlay district shall apply to

not less than 3 per cent of the developable land area of the

municipality or 100 acres, whichever is greater, and shall meet

all of the following requirements:

(i) a minimum gross density of 10 dwelling units per acre,

subject to any further limitations imposed by section 40 of

chapter 131 and title 5 of the state environmental code

established pursuant to section 13 of chapter 21A;

(ii) a minimum lot size of 2,000 square feet;

(iii) a minimum lot coverage of 40 per cent and a

maximum building height of no less than 3 stories; and

(iv) an off-street parking requirement of no more than 1

space per dwelling unit, with shared or on-street parking

permitted within transit-accessible areas. The zoning

ordinance, by-law or overlay district shall have no age

restrictions and shall be suitable for families with children.

(2) A municipality may require site plan review for the

development of missing middle housing. Site plan review shall

be conducted by the plan approval authority and shall be

limited to determining compliance with objective zoning

standards and objective design review standards. Site

plan review shall not operate to prohibit or deny a

development permitted as of right under this section, and no

special permit, variance, waiver, discretionary review or other

discretionary approval shall be required. The plan approval

authority may refer the plan to municipal officers, agencies or

boards other than the plan approval authority for comment;

provided that the board, agency or officer shall provide any

comments to the plan approval authority within 60 days of its

receipt of a copy of the plan. The plan approval authority shall

issue a written decision not later than 120 days after receipt of

a complete application, unless such timeframe for decision is

extended by written agreement between the applicant and

the plan approval authority. Failure of the plan approval

authority to issue a decision within 120 days or extended time, if

applicable, shall be deemed to be an approval of a plan.

(b) (1) Each municipality shall adopt or amend its zoning

ordinance, by-law or overlay district as necessary to comply

with this section not later than 24 months after the effective

date of this section, or within 12 months after the publication of

the model zoning ordinance or by-law under paragraph (3),

whichever is later.

(2) If a municipality fails to comply with paragraph (1), any

regulation that does not conform to subsection (b) shall be of

no force or effect.

(3) The executive office shall, within 12 months of the executive

date of this section, issue a model zoning code to assist

municipalities in the implementation of this section, and

promulgate guidelines to determine whether a municipality is

in compliance with this section. The executive office shall

publish, and periodically update, a list of municipalities in

compliance.

MBTA community of its obligations under section 3A.

SECTION 11. Section 5 of said chapter 40A, as so appearing, is hereby amended in the sixth paragraph by striking out the word “or” appearing before paragraph (c) of subsection (1) and inserting after “open-space residential development” the following words:-

; or (d) missing middle housing under section 3C.

SECTION 12. Section 5 of said chapter 40A, as so appearing, is hereby amended in the sixth paragraph by striking out the word “or” appearing before paragraph (d) of subsection (2) and inserting after “a diminution in the amount of parking required for residential or mixed-use development pursuant to section 9” the following words:-

; or (e) missing middle housing under section 3C.

A "municipality" is defined to mean any city or town.

Cities and towns often set a minimum lot size, limiting what types of housing are possible and encouraging inefficient land use. Massachusetts has the 15th largest average lot size in the country at 19,166 square feet.

Reducing the minimum lot size to 2,000 square feet would make it possible to build small-scale homes that are currently prohibited, helping municipalities create more housing options on existing land. This approach is not new.

Houston legalized residential lots as small as 1,400 square feet in 1998.
Spokane, Washington recently adopted a 1,200-square-foot minimum.
Austin, Texas lowered its minimum lot size from 5,750 square feet to 1,800 square feet.

Lot coverage limits cap the percentage of a lot that can be developed. This inhibits construction of missing middle housing and research finds that missing middle housing requires 30 to 60 percent lot coverage.

Minimum building height works alongside lot coverage to limit construction of multifamily housing. Three-story buildings remain consistent with many Massachusetts communities while making two- to four-units viable.

Empirical evidence supports these reforms. In Minneapolis, revised lot coverage, setback, and height standards helped unlock missing middle housing at scale. Since the reforms took effect in 2020, permits for 2- to 4-unit homes have increased by 45 percent, exceeding pre-reform averages from 2017–2019.

Density can be measured in two ways:

Gross density – the number of homes per acre across a whole district, including streets, parks, civic uses, and other non-residential areas.
Floor-area ratio (FAR) – a parcel-level measure comparing a building’s total floor area to the size of its lot.

For this proposal, we use gross density of 10 units per acre. It’s a straightforward measure that ensures missing middle housing is feasible at the neighborhood scale, not just on individual lots.

By contrast, the MBTA Communities Act requires a minimum gross density of 15 units per acre in designated districts. Although our proposal sets a less demanding minimum, it is designed to be applied to more areas of a community, not just transit-adjacent ones, making it a practical and scalable approach to missing middle housing statewide.

Missing middle housing must be allowed as-of-right. This means that a missing middle housing project cannot be prohibited and does not require any discretionary permits—such as a special permit or variance—to proceed.

However, this does not mean municipalities lose the ability to shape the look and layout of a project. Site plan review has long been recognized by Massachusetts courts as a legitimate regulatory tool even for uses permitted as of right, and we expressly preserve it for missing middle housing. Site plan review governs how a use occurs, not whether it may occur, and therefore may only impose reasonable terms and conditions based on objective criteria. It cannot be used to make an otherwise compliant project infeasible or impractical.

But, the reviewing body must issue a written decision within 120 days, or the plan will be deemed approved.

"Missing middle housing" is defined to mean a residential building type containing 2 to 10 dwelling units designed to be compatible in scale with detached single-family homes, including duplexes, triplexes, fourplexes, townhouses, courtyard apartments and cottage clusters, as defined in this section.

To streamline the development process, our bill places site plan review in the hands of a single local body: the “plan approval authority.” This may be the municipality’s planning board or another designated entity. Centralizing review in one body reduces confusion, shortens timelines, and creates a predictable process.

At the same time, we recognize that other local boards and commissions may have valuable expertise to offer. For example, under Chapter 40C of the Massachusetts General Laws, municipalities may establish historic districts with commissions that review changes to historic properties. While their input is important, involvement from multiple bodies can lead to unnecessary delays.

Therefore, the plan approval authority may request advice from a historic district commission or any other municipal body, but their feedback must be provided within a limited timeframe.

Part 2: Missing Middle Housing Gap Fund

This portion of the Missing Middle Act creates the Missing Middle Housing Gap Fund. The fund is supported by the excise tax set out in Part 4. The Executive Office of Housing and Livable Communities disburses money from the Fund to missing middle projects throughout the Commonwealth, as set out in Part 3.

SECTION 14. Chapter 29 of the General Laws is hereby amended by adding the following section:-

Section 2GGGGGGG. Missing Middle Housing Gap Fund.

There shall be established and set up on the books of the

commonwealth a Missing Middle Housing Gap Fund, which shall be

administered by the executive office of housing and livable

communities. The fund shall be administered under section 29A of

chapter 23B. There shall be credited to the fund:

(1) revenue from appropriations or other monies authorized by

the general court and specifically designated for the fund;

(2) revenue generated by an excise tax imposed under section

11B of chapter 64D;

(3) any gifts, grants, or private contributions;

(4) investment income earned on the fund’s assets; and

(5) other amounts credited or transferred to the fund from any

other sources. Amounts credited to the fund shall be expended

without further appropriation. Any balance in the fund at the

close of the fiscal year shall be available for expenditure in

subsequent fiscal years and shall not be transferred to any

other fund or revert to the General Fund.

This provision functions as an enforcement mechanism. It prevents municipalities from denying permits based on local regulations that conflict with the Act.

When Oregon introduced statewide zoning minimums, it flatly required non-compliant municipalities to use a state-designed model code. Oregon’s experience, however, illustrates the challenges of creating a one-size-fits-all code that works in every jurisdiction. It also shows that using the model code primarily as a “stick” can reduce its usefulness.

We take a different approach. Our bill retains the best of Oregon’s model by directing the executive office to develop a model code, but we use it as a carrot rather than a stick—a tool to help municipalities come into compliance, not a punitive fallback.

Section 5 of Chapter 40A requires a two-thirds vote at town meeting to approve most zoning amendments. This high threshold can prevent cities and towns from amending their zoning rules, even when a majority of residents support them.

Our bill adjusts this process by allowing zoning amendments for missing middle housing to pass with a simple majority vote. This change makes it more practical for municipalities to adopt the zoning updates needed to meet the bill’s minimum requirements and enable missing middle housing.

This approach is consistent with the MBTA Communities Act, which also lowered the voting threshold for zoning changes related to housing production.

Part 3: Missing Middle Housing Gap Financing Program

Even where missing-middle housing is legal to build, the high cost of land, materials, and capital has rendered most missing-middle projects financially infeasible without gap funding. Existing revenue tools such as the Community Preservation Act and Affordable Housing Trusts are unevenly adopted and primarily directed toward low-income or preservation projects.

This legislation, drawing on Michigan’s successful example, creates a statewide Missing Middle Housing Gap Financing Program within the Executive Office of Housing and Livable Communities. The program would provide gap financing, in the form of grants or loans coupled with affordability restrictions, to support the creation or rehabilitation of housing for households earning between 60 and 120 percent of Area Median Income. Eligible projects include small multifamily buildings, townhouses, cottage clusters, and adaptive reuse developments, with set-asides for Gateway Cities and MBTA Communities.

SECTION 15. Chapter 23B of the General Laws is hereby amended by inserting after section 29 the following section:-

[ . . . ]

(b) There shall be a missing middle housing gap financing program which shall be administered by the executive office to provide financial assistance for projects that increase the supply of missing middle housing in the commonwealth. The executive office may contract with the agency to administer the program. The program shall be funded by the Missing Middle Housing Gap Fund established in section 2GGGGGGG of chapter 29.

(c) In order to be eligible for financial assistance under this section, a project shall meet all of the following conditions:

(1) The project shall be for missing middle housing that consists of new construction, substantial rehabilitation, adaptive reuse or conversion of a non-residential structure for residential use.

(2) The project shall contain no less than 2 dwelling units.

(3) The project shall comply with applicable local zoning regulations.

(4) The project shall reserve not less than 60 per cent of the dwelling units as restricted units, each of which shall be subject to an affordability restriction for a period not less than: (i) 10 years following initial occupancy for rental units; or (ii) 5 years following initial sale for homeownership units.

(5) If the project includes mixed uses, residential use shall constitute the principal use, as demonstrated by floor area or project cost.

(d) (1) The executive office may provide financial assistance for a project that qualifies for this assistance under subsection (b). Financial assistance shall be used for the sole purpose of covering the portion of total development cost that cannot be supported by

debt and equity available to the project, as determined by the

executive office. Preference shall be given for projects that are located in a gateway municipality or an MBTA community, or that provide a greater percentage of restricted units or longer affordability restrictions than those required under paragraph (4) of subsection (c).

(2) Financial assistance shall be limited to $80,000 per restricted unit, adjusted for inflation, or to an amount not more than 15 per cent above that limit for adaptive reuse or historic rehabilitation. The executive office may establish higher limits for projects in a gateway municipality or an MBTA community where necessary for the financial feasibility of the project; provided that such limit shall not exceed 30 per cent of the total project cost.

We require that at least 60% of the units in a subsidized project be affordable to the missing middle. This is modelled on Michigan Missing Middle Housing Program which was created in 2022 to provide grants up to $80,000 per unit to developers to build or substantially rehabilitate properties kept affordable for households earning 60-120 percent of area median income (AMI).

Affordable to the missing middle is defined by gross annual income between 60 and 120% of the area median income (AMI). We chose to use a percent of AMI threshold to determine eligibility, rather than employment status, occupation, or some other criteria. The 60-120% AMI range was used because:

It captures “workforce” or middle-income households underserved by existing programs.
It aligns with affordability targets and supports households that can qualify for mortgages/rental financing but face cost pressures.

Affordability period is on the lower end—10 years for rentals and 5 years for ownership. These terms make small-scale projects financially viable while still delivering meaningful affordability for the missing middle. Rental and ownership units require different affordability terms because rental units depend on long-term regulated rents to stay affordable, while ownership units need shorter affordability periods so that homeowners can build value in their home and still qualify for a regular mortgage.

Amount of funding is restricted at $80,000 per restricted unit. Michigan did extensive research to determine the gap between sale and construction cost. The caps is a balance: it is high enough to make missing-middle projects feasible (particularly for smaller or nonprofit developers), but not so large as to convert the program into full market‐rate subsidy for developers.

"Financial assistance" is defined to mean "grants, forgivable loans or residual-receipt loans, or any combination thereof, awarded under this section and paid from the fund."

Gap financing is targeted funding provided to fill the difference between what a housing project costs and what traditional financing can cover. For missing middle housing this difference is often large because construction costs are high and attainable rents or sale prices must be kept moderate. By using gap financing, public programs make it possible for developers (private and public and including municipalities) to build housing that is both affordable and built at the right scale for neighborhoods.

We give preference for gateway municipalities and MBTA communities in order to:

continue accelerating housing near transit for accessibility
support areas with greater economic need and opportunity for growth (gateway communities have lower incomes, higher poverty rates, aging housing stock.

By giving preference to those communities, the program steers resources toward locations where housing investment can have a greater impact.

Part 4: Missing Middle Fund Real Estate Transfer Fee

To finance the program sustainably, the bill establishes a 1% real estate transfer fee (which is legally structured as an excise tax) on the portion of any sale above $1 million. The fee would apply only to high-value transactions and would exempt (1) first-time homebuyers purchasing a principal residence and (2) properties already receiving a state or local real-estate tax abatement. All revenues would be deposited into the Missing Middle Housing Fund outlined in Part 2.

By capturing a small share of luxury-market appreciation to finance attainable housing, the bill builds a self-sustaining, market-responsive funding stream that helps moderate-income families live in the communities where they work, supports small-scale developers, and strengthens compliance with the Commonwealth’s broader housing production mandates under G.L. c. 40A, § 3A and G.L. c. 40R.

SECTION 16. Chapter 64D of the General Laws is hereby amended by adding the following section:-

Section 11B. Additional payment of excise; credit to Missing Middle Housing Gap Fund; exemption.

(b) (1) In addition to the excise imposed by section 1, every seller, upon the sale or transfer of any real property interest in any real property, shall pay an additional excise tax, as described and as subject to conditions and exemptions described herein, equal to 1 per cent of the portion of the consideration, as defined in section 1, subject to the exemptions in subsection (c).

(2) The seller or settlement agent shall, in advance of the time of transfer, request and the commissioner shall provide to said seller

or settlement agent in advance of the time of transfer a certificate

indicating the dollar amount of the excise owed based on the stated consideration in the instrument to be recorded or that the instrument qualifies for an exemption from the excise under subsection (c), stating the basis for the exemption.

(3) No registry of deeds or registry of district assistant recorder shall accept for recording or registration any instrument of

conveyance unless the excise imposed under this section has

been paid, except as otherwise provided herein. Payment shall be

made by the settlement agent within 7 days of recording,

accompanied by a copy of the recorded instrument and a copy

of the affidavit of excise. The commissioner shall promptly

thereafter execute and issue a certificate indicating that the

appropriate excise has been paid. Notwithstanding section 3, a

deed subject to the excise imposed by this section may be

recorded prior to payment of the excise imposed by this section,

provided that the settlement agent complies with this paragraph.

(4) All revenues received pursuant to this section shall be credited

to the Missing Middle Housing Gap Fund, established in section

2GGGGGGG of chapter 29.

conveyance, shall be exempt from the excise established pursuant

to this section;

(i) Transfers in which the consideration, as defined in section 1,

is less than $1,000,000;

(ii) Transfers to first-time homebuyers purchasing the property

as a principal residence;

(iii) Transfers to which a state or local real estate tax

abatement or exemption under chapter 59 or any special act

applies; and

(iv) Transfers from the government of the United States, the

commonwealth and any of their instrumentalities, agencies or

subdivisions, including but not limited to transfers from the city,

town, local housing authority or regional housing commission.

(2) The payor of the excise tax, the seller, shall have the burden of

proving that an exemption applies to a transfer of real property

interest pursuant to this section; and provided further, that any

otherwise exempt transfer shall not be exempt in the event that

such transfer, by itself or as part of a series of transfers, was made

for the primary purpose of evading the excise tax established

pursuant to this section. The commissioner shall promulgate

regulations necessary to implement this section, including rules to

prevent the avoidance of the excise.

SECTION 17. Section 10 of said chapter 64D, as so appearing, is hereby amended by striking out the words “shall be retained by the commonwealth.” and inserting in place thereof the following words:- shall be retained by the commonwealth; provided, however, that revenues collected pursuant to section 11B shall be deposited in the Missing Middle Housing Gap Fund established in section 2GGGGGGG of chapter 29.

One recent study found that a 1% real estate transfer fee on the portion of transactions over $1 million could raise approximately $213.7 million in revenue.

This exemption ensures that the tax is applied only to high-value transactions.

This section of the bill draws on the wisdom of previous legislative proposals aimed at increasing the state's housing supply through real estate transfer fees: namely, S. 1937 (authorizing localities to impose taxes on real estate transfers to raise money for local affordable housing trust funds) and S. 1973 (doubling the state's deeds excise tax to raise money for affordable housing and climate change mitigation funds).

Our bill similarly leverages a real estate transfer excise tax to raise revenue for a state affordable housing fund. On that score, the bill also takes inspiration from sections of the state code that have successfully imposed excise taxes on certain transactions to fund state programs—for example, the additional excise imposed on the sale of cigarettes in Mass. Gen. Laws ch. 64C § 7C to fund the Health Protection Fund.

This exemption applies to a people who have not, individually or jointly, owned or purchased a principal residence at any time during the preceding 3 years, as determined by the commissioner by regulation, in consultation with the executive office. It ensures that the tax doesn't burden people entering the housing market for the first time.

This provision preserves existing tax exemptions and abatements under state law or a special local act (such as for transferss by seniors, veterans, people with disabilities, or those subject to affordable housing restrictions or hardship abatements).

This exemption ensures that public agencies (like cities, towns, and housing authorities) can transfer property for public purposes without triggering a transfer tax.