It’s easy to look at a crane over a luxury condo in a town where housing is unafforable and conclude developers are the problem. But developers don’t set the rules of the game—they play the one we’ve written. They build what pencils out under today’s zoning, fees, parking mandates, timelines, interest rates, and lender requirements. If the outcome is too many high-end units and too little “missing middle,” that’s a policy failure, not villainy.
Why so much “luxury”? Because it’s what survives our cost stack and risk. Urban infill is expensive: land is dear, materials and labor have climbed, interest rates and insurance are up, and years of hearings, appeals, and environmental reviews add carrying costs. Lenders then demand proof the project can fetch top-of-market rents or pre-sales to cover that risk. When you finally clear the hurdles, you’re left with a pro forma that only works at the higher end. The “luxury” label is often a finance outcome, not a gold-plating decision; the granite countertops are a small line item compared with land, structured parking, code compliance, utility upgrades, and delay.
Meanwhile, blocking infill does not stop growth—it displaces it to the fringe, where it consumes more land, locks in car dependence, and pushes housing even farther out of reach. If you care about affordability and about preserving rural nature, you need cities to add homes where infrastructure already exists.
Developers respond to incentives just like everyone else. Few people blame “greedy farmers” for growing almonds in a drought; we recognize that water rights, subsidies, crop insurance, and market prices shape what farmers plant. If we want different crops, we change the farm bill, not the farmer’s personality. Housing is no different. If towns want more middle housing and below-market options, they must rewrite the incentive structure so those homes are the easiest, least risky thing to build.
What that looks like:
Legalize abundant, gentle density. Allow duplexes, triplexes, fourplexes, cottage courts, and small apartments on residential lots. Right-size setbacks, lot sizes, and height limits so “missing middle” actually fits.
Remove parking minimums. Mandatory parking is a hidden tax that kills small infill and adds tens of thousands of dollars per unit. Let the market and curb management handle parking.
Make infill by-right and fast. Predictable, swift approvals cut risk and cost. Use clear form-based codes, pre-approved plan sets, and ministerial review for code-compliant projects.
Upzone near transit and jobs. Pair added capacity with great transit, safe walking and biking, and reduced car dependence to lower household costs.
Calibrate inclusionary tools. Use inclusionary zoning, density bonuses, and in-lieu fees where the economics support them; don’t set requirements so high that nothing gets built. Publish feasibility studies and adjust as markets shift.
Put real money on the table. Fund social and affordable housing via bonds, tax credits, public land, land banks, and revolving acquisition funds. Deep affordability requires subsidy everywhere.
Support diverse builders. Create small-site loan programs, reduce impact fees for smaller units, legalize mass timber, and simplify condo liability so small and non-profit developers can produce starter homes, not just mega-projects.
Protect tenants and prevent displacement. Right-to-counsel, relocation assistance, anti-harassment, targeted rent stabilization where allowed, and community land trusts can stabilize households while production ramps up.
Align taxes and infrastructure. Use value capture and tax-increment tools to fund local improvements, and stop expanding highways that spur sprawl and raise per-unit costs in cities.
When we do these things, developers will still seek profit—but the profitable projects will increasingly be the ones communities want: abundant, pro-social housing close to jobs and transit, with a healthy share of income-restricted homes. Blaming “greedy developers” feels satisfying for a moment; changing the rules harnesses private capacity to deliver public goals.
So the next time you see a proposal for infill, don’t ask, “Why are they building luxury?” Ask, “Have we made it legal and feasible to build anything else?” If the answer is no, fix that.
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