Town houses provide chance to fill ‘missing middle’

For decades, most housing built in the United States has fit into two categories: single-family houses and apartments. That has left a wide gap in the middle that cities and towns are looking to fill as homeownership becomes increasingly unattainable for some people, and others look to downsize out of their large family homes.

One option that developers frequently pitch in central Indiana is the town house—typically a two-, three- or four-story residence that ranges in size from 1,800 to 2,300 square feet and shares a wall with a neighbor.

In some cases, town houses are built as part of their own communities in the suburbs or as infill projects in urban areas. They can also be constructed as one part of a larger development with multiple housing types and commercial and retail amenities, such as the recently approved Morse Village in Noblesville. And like traditional houses, they can be simple or luxurious.

“Townhomes are a very interesting housing type because they provide a lot of creativity for those that don’t want to own and maintain a single-family detached home and, quite frankly, the lot that comes with it,” said Rex Ramage, director of land planning and entitlements for Carmel-based Pulte Homes of Indiana LLC.

Pulte has built town houses at the Towns at RiverWest in Noblesville, Towns at River Place in Fishers and Retreat on the Monon in Westfield. The homebuilder is also planning the Towns at Union in Westfield, which will have access to the Monon Trail and the city’s downtown.

“Townhomes are a practical response to limited land in certain submarkets,” Ramage said. “Their compact design makes it possible to build more homes on smaller plots, allowing for new construction in developed areas where land is scarce, but demand is high.”

Just before and during the pandemic, town house sales accelerated in Hamilton, Hancock, Hendricks, Johnson and Marion counties—the central Indiana counties where town houses are most common—reaching a high of 1,307 sales in 2021, according to a study by the MIBOR Realtor Association and the Indiana Association of Realtors. Housing experts attributed a lack of supply as the reason sales dipped to 573 in 2023 and 581 in 2024.

“The pandemic just changed the landscape for Indiana in terms of people who could remote-work from anywhere, so they were flocking to places where it was affordable,” said Kristen Yazel, a real estate agent who sells homes in central Indiana with Carmel-based Century 21 Scheetz.

The median price of a town house in central Indiana rose from $170,000 in 2018 to $330,000 in 2024, according to MIBOR’s town house study.

“It’s kind of what I expected to see,” MIBOR Director of Housing Insight Brad Coffing said. “There’s under-supply of townhomes, and demand for housing generally is still strong.”

Kristen Fatt, a sales consultant for PulteGroup, said buyers gravitated toward town houses and away from apartments during the pandemic because low interest rates provided an incentive to own rather than rent.

“Townhomes are a great starter home, and their monthly payment is about the same amount as it would be for rent,” Fatt said. “You can get a townhome now for $150,000 to $200,000 less than a single-family home, and a lot of townhomes, they accommodate a family.”

Pam Browning and her husband, Dave, were in the wave of people who have purchased town houses since 2020. They rented a town house at Princeton Woods east of the intersection of East 131st Street and Lantern Road in Fishers before an adjacent unit went up for sale two years ago.

Browning, who works as a nurse, said the town house is the right size for what she and her husband need, and she appreciates their home’s location near the Nickel Plate Trail and not having to worry about outdoor maintenance.

“Having the location for what we want, we’re just in the ideal place,” she said.

Buying and building

Michael Mercho, a broker with Integra Builders, a family-owned homebuilder in Fishers, said town houses offer people an opportunity to live in a desirable location for less than they would have had to pay for a single-family house.

He added that with the high cost of land, building town houses also makes sense for developers and homebuilders because they can construct a higher volume of homes on a smaller amount of acreage.

Integra has built town houses at Liberty Place at Lockerbie Square in Indianapolis and Harbourwalk Club along Morse Reservoir in Noblesville. The company will also build four-story town houses at City Walk, a $75 million residential and commercial development along the Nickel Plate Trail in Fishers.

“[Harbourwalk] is a 2,200-square-foot home that’s got a deeded boat dock included for $530,000,” Mercho said. The only other way to get anywhere near the water like this is maybe to spend almost twice that.”

Chris Pryor, government relations director for MIBOR, said town houses offer something different for people who don’t want a large yard. Unlike condominiums, where an owner owns only the unit, town house owners sometimes own both the home and the land it sits on, depending on a community’s bylaws.

A 2022 MIBOR study found an increasing desire for town houses across all generations, from young professionals and couples without children to empty-nesters and retirees who are transitioning out of single-family homeownership.

“It offers a diversity of housing product, and that’s one of the things [MIBOR has] been very interested in,” Pryor said. “We have a tremendous amount of single-family, detached product, and we need to diversify products.”

Phil Sundling, vice president of development for Indianapolis-based LOR Corp., said the low-maintenance aspect of town houses is important to both sides of the demographic spectrum. LOR plans to build 135 town houses and condominiums at Morse Village, which will also have 240 high-end single-family houses, 250 to 300 multifamily flats and 30,000 square feet of commercial and retail space.

Sundling previously worked as director of development for Westfield-based Henke Development Group before joining LOR last year. In his former role, he oversaw the construction of high-end town houses at the firm’s golf course communities at Chatham Hills in Westfield and Holliday Farms in Zionsville.

“It just hits that particular market for us, with young professionals and empty-nesters, which I think is very important,” Sundling said.

Missing in the middle

The town house concept is not new, and it has different names in different parts of the country. Century-old town houses, row houses and brownstones can be found in Baltimore, New York City’s Brooklyn, Chicago and Washington, D.C.

Town houses are an example of so-called “missing middle” housing, which typically represents medium-density housing with 12 to 35 homes per acre. Other types of missing-middle housing include duplexes, cottages, stacked triplexes, fourplexes and courtyard buildings. Missing-middle housing represents just 22% of all homes in the United States, according to the U.S. Census Bureau’s 2023 American Housing Study.

“I think one of the things that’s unique about most missing-middle product is that it’s typically built to scale to single-family housing, and so it fits in with those other products, and it’s typically considered more of a walkable type of product that’s built on, traditionally, smaller lots,” Pryor said.

A variety of housing types can be found in some older neighborhoods in Indianapolis, such as the Old Northside and Meridian-Kessler, where town houses, duplexes, quads and small apartment buildings sit among large, single-family houses.

“You could drive by them every day, and you wouldn’t even spot them,” Coffing said. “You would really have to have them pointed out because they just blend into the aesthetics of the neighborhood.”

However, single-family-housing zoning became popular in the United States after World War II with the introduction of suburbs, which Pryor said eliminated the ability in many places to construct medium-density housing types, like town houses.

“We’re starting to see people pay attention to making some modifications to some of those regulations to allow for some of these products today,” he said.

Missing-middle housing types generally have one or two bedrooms rather than three or four. Proponents of missing-middle housing say it increases density and walkability in neighborhoods.

The phrase “missing middle” was coined in 2010 by Daniel Parolek, founder of Berkeley, California-based urban design firm Opticos Design.

Cities around central Indiana are looking for ways to increase their stock of missing-middle housing.

In Indianapolis, planners are trying to streamline the process for developers to build multi-unit housing options on vacant city-owned lots.

To the north in Carmel, a nine-member housing task force organized last year by Mayor Sue Finkam determined the city should encourage developers to build more missing-middle housing types because the community lacks housing options for less-affluent people and older residents who want to downsize. The report said people who earn below the city’s 2023 median household income of $143,000 have been priced out of the city.

Pryor said missing-middle housing offers an opportunity to address these housing attainability challenges.

“Land prices are a huge challenge in many of our communities today, but a lot of these products do offer—because they’re building on less land—the opportunity to be a more attainable price point,” he said.•