City of St. Paul to Allow for “Missing Middle” Housing Development

On October 18, 2023, St. Paul City Council adopted sweeping new zoning rules that would allow developers to build “missing middle” housing across most St. Paul neighborhoods. As a result, the Zoning Code now permits two-to-six-unit multi-family buildings almost anywhere in the city, with some restrictions. The policy is intended to ease the upward pressure on rents and home prices by increasing the housing supply for renters and homebuyers.

“Missing middle” housing policies have become popular across the country as cities seek to boost the supply of affordable housing by permitting the construction of multi-family housing on former single-family-only zoned lots. The Zoning Code accomplishes this by reducing the city’s residential zoning districts to three districts: RL, H1 and H2.

• RL districts are zoned for low-density residential uses, along with civic and institutional uses, public services and utilities that serve the residents in the district. Importantly, RL districts are not limited to single-family dwellings. Duplexes are permitted in RL districts.
• H1 districts are zoned for a variety of housing options, along with civic and institutional uses, public services and utilities that serve residents in the district. H1 districts allow for the reuse and/or conversion of existing homes and infill development in existing neighborhoods, lots and backyards. Multi-family dwellings containing up to four units are permitted on each lot.
• H2 districts are like H1 districts, but are intended for use in neighborhood nodes and near transit routes along fixed rail and bus rapid transit corridors. In H2 districts, new single-family dwellings must not exceed 2,500 square feet. Multi-family dwellings up to five units are permitted on each lot.

One of the city council’s priorities with the rule change was to incentivize the building of below-market rate multi-family units. Under the new code, developers may receive a density “bonus,” permitting them to build up to six units per lot in H1 and H2 districts provided that some of the new housing is offered at below-market rates to low-income buyers or renters.

Highlights of St. Paul’s “Missing Middle” Ordinance:

• Increases in affordable rental and owner-occupied housing. The density “bonus” will allow developers to build additional dwelling units without subjecting them to minimum lot size per unit standards. This means that developers may build up to two additional units per lot if the units are rented or sold at below-market rates. Developers may secure this additional density in one of four ways: (1) In the rental market, two additional units in H1 areas and one additional unit in H2 areas are permitted if 20 percent of the units on the lot are leased at a rate at or below 60 percent AMI; (2) In the owner-occupied market, one additional dwelling unit is permitted for each affordable principal dwelling unit on the lot that is sold to a household earning up to 80 percent AMI; (3) One additional dwelling unit is permitted for each principal dwelling unit on the lot containing three or more bedrooms; (4) One additional dwelling unit is permitted for conversions of or additional to an existing residential structure if at least 50 percent of the floor area of the existing principal residential structure on the lot is retained.
• Increases in residential floor area. Under the code, homes may be built taller and closer to the street and sit on smaller lots.
• Ability to build smaller single-family homes. By making it easier to subdivide lots, developers will be able to build smaller single-family housing options (such as townhomes) for renters and homebuyers.
• Increase in the number of accessory dwelling units allowed per lot. Under the code, homeowners may build up to two (formerly one) “accessory dwelling units” on each lot for each one-family dwelling on such lot.
• Cap on size of new single-family homes. In some areas of St. Paul, the size of new single-family homes will be capped at 2,500 square feet.
• Limits on short-term rentals. The code limits the number of short-term rental dwelling units in H1 areas to no more than one per lot, unless a duplex, triplex or fourplex is owner-occupied and the owner is in residence during the rental period.

To conclude, St. Paul’s Zoning Code effectively eliminates single-family-only lots in favor of multi-family housing development. In doing so, the city seeks to promote the construction of diverse housing options—smaller single-family homes, multi-story townhomes, studio-to-three-bedroom apartments and condos, for sale or rent—to meet the housing needs of the community.

For questions regarding this article, please contact Fredrikson associate Aramis Mendez.