In today’s fragmented American housing market, one term is rapidly gaining attention among urban planners, policymakers, and real estate investors alike—“Missing Middle Housing.” These small-scale multifamily dwellings, ranging from duplexes and fourplexes to cottage courts and low-rise apartments, bridge the gap between sprawling single-family homes and towering apartment complexes. As cities struggle to provide affordable housing that preserves neighborhood character, Chattanooga, Tennessee, has emerged as a quiet yet powerful leader in rethinking what urban infill development can look like.
Chattanooga’s story is not unlike that of many American cities. In neighborhoods like Ridgedale and Highland Park, the housing market has long been dominated by large, detached single-family homes and traditional apartment blocks. This left a glaring gap in available housing for middle-income families, young professionals, and downsizing retirees who sought affordability without compromising community feel or livability.
In 2014, Chattanooga Neighborhood Enterprise (CNE)—a nonprofit organization with a nearly 40-year history of revitalizing underinvested urban areas—teamed up with the Lyndhurst and Benwood Foundations to acquire scattered infill lots in these neighborhoods. These parcels, once owned by Tennessee Temple University and earmarked for dormitories and sports facilities, had sat vacant for years. Rather than pursue high-density mega-projects, CNE adopted a decentralized, neighborhood-first approach, introducing missing middle housing at a scale and pace suited to the community’s historical identity.
What made the Chattanooga model especially compelling was its iterative, community-integrated design process. Working alongside the Incremental Development Alliance (IncDev), CNE held design charrettes to generate pre-vetted building prototypes that could adapt to irregular urban lots while respecting the architectural context of early-20th-century street grids. These prototypes—ranging from duplexes to 12-unit buildings—formed a flexible toolkit that CNE deployed over time, evolving each iteration based on tenant feedback and zoning constraints.
According to Justin Tirsun, Director of Real Estate Development at CNE, the city’s existing zoning code—written in the 1950s—was tailored to suburban expansion rather than compact urban revitalization. As a result, CNE had to apply for nonresidential zoning classifications, triggering commercial-level fire and stormwater regulations, despite the small scale of its projects. But instead of resisting the bureaucracy, the team leaned into it. “We learned where and how we could flex without breaking the integrity of the neighborhood,” said Tirsun. “That’s what makes this model replicable elsewhere.”
CNE built the new housing in two phases. From 2017 to 2019, the first phase saw the construction of six sixplexes and the 49-unit Mai Bell building. The second phase, from 2020 through 2025, introduced five more sixplexes and several new housing types, including the project’s first duplexes and quadplexes. Unlike most large-scale affordable housing initiatives, CNE relied not on a single capital injection but on a hybrid financing model that leveraged local public funding, philanthropic support, and smaller, more digestible conventional loans.
The City of Chattanooga contributed nearly $1 million in HUD HOME Investment Partnerships funds, which ensured that 20% of the rental units would remain affordable to households earning between 50% and 60% of the area median income (AMI). Early land acquisitions and design development were backed by the Lyndhurst and Benwood Foundations. Meanwhile, construction financing came from traditional lenders—backed in part by Tennessee’s Community Investment Tax Credit—which allowed the team to move forward in digestible, low-risk phases. As Macon Toledano, Associate Director at the Lyndhurst Foundation, noted, “We didn’t need $30 million up front—we only needed $1.5 million to start a phase.”
This staged, tactical approach also allowed the development team to incorporate lessons learned along the way. For example, the original sixplex design aligned units in a row to maximize lot space and mimic local streetscapes. In the second iteration, four buildings were arranged in a serpentine layout to increase green space and visual flow—but the community’s response was lukewarm. By the third version, the team returned to the original linear format but incorporated upgraded ceilings, more windows, and enhanced privacy. “Now we have a prototype that works,” Tirsun explained. “Tenants like it, the neighborhood likes it, and it fits into what we’re trying to build.”
What stands out most in Chattanooga’s model is its emphasis on architectural dignity and neighborhood compatibility. Unlike many affordable housing developments that face fierce community opposition, CNE’s attention to detail and contextual design allowed it to proceed with little resistance. According to Toledano, “Because we respected the neighborhood’s character and weren’t trying to shoehorn in density, people didn’t even realize it was affordable housing.”
This subtle but significant approach has broader implications. It fosters long-term community investment, opens pathways to generational wealth for residents, and stabilizes neighborhoods without displacing long-time residents. For working families, retirees, and even first-time renters, this kind of gentle density offers an attainable, attractive, and socially cohesive lifestyle that has become increasingly rare in America’s overheated housing markets.
Nationally, cities like Minneapolis, Austin, and Portland have begun pushing similar missing middle reforms—but few have approached the issue with Chattanooga’s blend of philanthropy, policy adaptation, and local-scale design sensitivity. While zoning reform remains a critical bottleneck in many cities, Chattanooga proves that workarounds are possible without sacrificing integrity or livability.
For real estate professionals, urban planners, and housing advocates alike, Chattanooga represents more than just a successful pilot. It’s a proof-of-concept that affordable housing doesn’t have to mean low quality or high conflict. It’s a model that scales by design, not by force—and one that can be exported to similar mid-sized cities facing affordability gaps without compromising neighborhood identity.
In an online ecosystem driven by high-value real estate keywords such as “affordable housing development,” “missing middle prototypes,” “infill zoning reform,” and “gentle density financing,” Chattanooga’s example is not only socially impactful—it’s also strategically positioned for content creators and policymakers seeking to lead in the housing discourse.
As Chattanooga Neighborhood Enterprise moves to complete its final batch of homes in Ridgedale by the end of 2025, its blueprint continues to evolve. Yet one thing remains clear: the city’s quiet revolution is setting a powerful precedent. Sometimes, solving a national housing crisis doesn’t require building upward—it simply means building wisely, collaboratively, and with care.