Washington, DC, is running out of homes that middle-income families can afford to buy. Homeownership has plunged from 47.5% in 2007 to just 40% today even as thousands of new apartment units, almost exclusively rentals, have been built in neighborhoods like NoMa and Navy Yard.
Homeownership rate in the District of Columbia. Image by FRED.
These outcomes are the natural, albeit perhaps unintended, consequences of the District’s land use policies. For decades, exclusionary zoning has blocked smaller, moderately priced homes from being built. As a result, options have dwindled for working and middle-class families who want to own a home.
Homeownership rate by property type and decade built in the District of Columbia. Image by FRED data via AEI Housing Center.
The District’s elected and appointed officials have a rare chance to change course. As they steward a rewrite of its Comprehensive Plan, which will govern what is allowed to be built where over the next 25 years, it should legalize “light-touch density.” That means allowing any owner of a single-family detached home to, should they wish, convert them into duplexes, triplexes, or townhomes, provided that each parcel meets a minimum lot size.
This isn’t radical. A century ago, American neighborhoods featured a mix of different sizes and types of homes. That changed in the 1920s, when federal guidance and a Supreme Court ruling upheld exclusionary zoning practices that segregated real estate by price point and, indirectly, by race. Cities quickly banned what we now refer to as “missing middle” housing from most neighborhoods and increasingly gave private groups veto power over new construction. The result was higher prices, less diversity, and more McMansions.
McMansion conversions by Census tract. “Teardown McMansion” is defined as a single-family detached home, built after 2011, that replaces an older home on lots between 5,000 and 50,000 square feet. The new home must have a gross living area between 3,400 and 12,000 square feet. Image by AEI Housing Center.
Allowing light-touch density would help to reverse the negative trends brought about by exclusionary zoning. If existing lots were allowed to contain more than one home, neighborhoods like the Palisades, Michigan Park, Takoma, and Hillcrest—by using land more efficiently—could accommodate more residents while remaining low-rise and residential.
2860 University Terrace NW, in Washington, DC, as seen in 2018. Image by Google Maps.
2860 University Terrace NW, as seen post-McMansionization. Image by Google Maps.
In high-demand cities like DC, land appreciates while buildings depreciate. As a result, market forces incentivize redevelopment. If zoning permits only one large home, you get a $4 million McMansion. If zoning allowed light-touch density, the same land could support four to eight moderately sized homes instead. In DC, these would sell for roughly 75 percent of the price of the home they replaced—not cheap, but attainable for middle-income buyers. Many would serve as “starter homes,” the kind of family-sized, lower-cost options that are increasingly scarce.
And new, moderately priced homes free up older housing. This process, known as filtering, means that building new homes doesn’t just help new buyers—it helps renters and lower-income families too.
By our estimates, allowing light-touch density could enable 800–1,100 homes to be built in the District annually, six times the past decade’s single-family pace. Crucially, these would mostly be for-sale units, with ownership rates around 80 percent, far above the sub-10% ownership rate typical of new multifamily buildings.
Estimated additional units from light-touch density infill conversion over 10 years by Census tract. Red is >0, orange is 25, yellow is 50, light green is 100, green is 250+. Image by AEI Housing Center.
The neighborhoods most suited for light-touch density are those most at risk of McMansionization: Chevy Chase, Forest Hills, and American University Park. They have large lots, aging homes, and high land values. Without reform to the District’s land-use policies, these areas will see ever-larger luxury homes that only single wealthy households will occupy. With light-touch density regulations in place, they could welcome multiple families at moderate price points to high-opportunity neighborhoods with strong schools, good transit, and stable property values.
Most buyers of these homes will be District residents; most of them will be young families, first-time buyers, and people of color. These are the groups getting shut out of these neighborhoods today. Legalizing light-touch density would expand housing choices and help build a more inclusive and equitable city.
Some may fear that light-touch density will hurt neighborhood character or property values. But evidence from cities like Seattle or Charlotte show modest density increases have no measurable effect on surrounding prices. New units would match the scale of existing homes, and new residents would largely be middle-class households. Parking and traffic concerns can be addressed through market tools like priced curbside parking. And unlike large apartment buildings, light-touch density would fill in incrementally over time, preserving community continuity.
We recently released a report proposing light-touch density reforms for DC, outlining their housing supply potential and broader benefits. For current homeowners, it would enable them to partner with small builders to redevelop their lot, keep a unit and downsize, create housing for adult children or aging parents, or simply unlock wealth without leaving the neighborhood.
The fiscal upside is substantial. According to our calculations, over ten years, homes built as a result of legalizing light-touch density could generate about $1.2 billion in recurring property, income, and sales taxes for the District—without subsidies. That’s revenue that could be reinvested in infrastructure, schools, or lowering taxes for everyone.
But the details matter. Conversions must be allowed by right, with simple, clear rules—no permit caps and no excessive affordability mandates that make projects unworkable. The District should further improve its zoning code to be small-lot friendly, reduce parking minimums, and offer pre-approved design templates to speed permitting. Neighboring Arlington and Montgomery counties are cautionary tales: Both passed light-touch density-style reforms, but blunted them with strict limits and costly requirements.
Politically, the challenge is that neighborhoods that are prime candidates for light-touch density have long resisted change and are politically powerful enough to continue to do so. Still, the alternative is more McMansions, rising prices, and falling rates of homeownership. Once a lot becomes a single high-cost home, it’s locked in for decades—and once the Comp Plan rewrite is finalized, there won’t be another opportunity to legalize light-touch density for over a decade. Successful reforms in Portland and Austin prove that it can be done.
Light-touch density alone will not solve DC’s housing crisis. But it will increase ownership opportunities, support the middle class, promote a more equitable city, and better align market incentives with public goals. In an era of fiscal strain for the District, it will also more than pay for itself. The District should make light-touch density one of the pillars of its new Comprehensive Plan.
Top image: A satellite view of the intersection of 38th and Albemarle streets NW. It looks all single-family, but, behold the duplexes in between (highlighted). Image by Google Maps and AEI Housing Center.

