Dear Friend, Subscriber, and Courtyard Urbanism Enthusiast,
Last month, I wrote about the courtyard block entering American housing policy, as all levels of government are reckoning with the rules that prevent owners from building small apartment buildings, point-access designs, mixed-use blocks, and low-parking urban development. August brought further gains, along with several reminders of how much work needs to be done to overcome the gulf between legalizing a building and making it profitable to build.
Even after a city permits a good building type, someone still has to finance it, get it through building review, and build it at a cost that local rents justify. When a block contains several separate buildings, the development team must also resolve the boundaries and shared infrastructure that a conventional megaproject can manage under one owner.
In the August newsletter, we will discuss:
Less mandatory parking. Asheville paired housing reform with the elimination of parking minimums, while Bellingham made its parking reform permanent.
Simpler codes for small apartment buildings. Oklahoma advanced small-multifamily building-code reforms, including a pathway for four-story single-stair buildings.
Recognition for affordable housing without subsidies. The OCC and FDIC proposed clearer rules for when banks can receive Community Reinvestment Act recognition for financing apartments with affordable, unsubsidized rents.
More lending, but stricter requirements. Arbor’s research found growing small-multifamily lending, even as lenders required stronger property income relative to loan size.
Why this matters for courtyard urbanism: A fine-grained city depends on a development system in which small apartment buildings are practical to finance, approve, and own. In such an “operating system,” rules and institutions allow—create incentives for!—separate buildings to share walls, courtyards, and infrastructure without consolidating the entire block into a single tax parcel. This coordinated, small-parcel density is both an engine for local economic development in addition to generating the kinds of homes and neighborhoods that serve people across the life cycle, including the key phase of family formation.
Courtyard Urbanist Updates
We continue to be in conversation with developers and municipalities across the Northeast, Midwest, Mountain West, Southwest, and West Coast about opportunities for courtyard housing. I’m especially excited about what is surfacing here in Chicago and, increasingly, in San Francisco, as several conversations develop into collaborations on legislation and potential demonstration projects.
We offer rapid feasibility testing to help teams assess what a site could accommodate, along with design and architectural services, development and policy consulting, and educational programs and community engagement. These engagements can focus on a particular property or support a broader local housing initiative, depending on what a developer, municipality, or community needs. Our Work With Us page describes the services and includes examples of current collaborations.
Chicago, where family housing and public-benefit development are moving forward
On August 16, I joined Chicago Growth Project and a special panel included local alderperson Leni Manna Hoppenworth for “Keep Families in the City”, an event at Le Village Lakeview that focused on building neighborhoods for lifelong Chicagoans. At the event, we discussed the problem besetting many Chicago parents who want to stay in the city but cannot find a home with the space and yard they need for a grown family. I presented on courtyard block buildings, explaining how the time-tested typology provides larger homes and protected outdoor space that families need.
One outcome of the event has been a collaboration with Chicago Growth Project, supported by Northwestern law students, on ROOTS (Residential Options Oriented Toward Schools legislation. The current draft would create a voluntary alternative under Chicago’s Affordable Requirements Ordinance for qualifying developments within a quarter-mile of a school. Developers choosing that option would provide market-rate homes with three or more bedrooms in place of the income-restricted units otherwise required through that compliance path. We are still working through the details, but the goal is creating a regulatory environment that makes it easier to build homes that allow families to remain near their neighborhood schools as their children grow. I would like school-oriented development to become a basic way of thinking about neighborhood planning, where the housing around a school helps sustain the community that uses it.
We are also looking for opportunities to test a public-benefit model of land development and entitlement through the Chicago Courtyard Housing Initiative. The proposed program would help promising family-oriented housing projects through the entitlement and coordination work needed to actualize them. A key question here is whether a mission-led organization, by undertaking early some of the predevelopment work, can create great development opportunities that small builders can profitably take on. Essentially, the idea is creating a civic organization that creates the conditions for neighborhood development that involves many different buildings and owners and that can be phased over time.
Two Chicago studies published in August helped make these questions concrete. At Western and Lawrence, our concept showed how an underused bank property and surface parking could accommodate approximately 200–240 homes around a shared garden, with neighborhood shops and a civic plaza. At RiverWard in North Center, I compared the approved 49-townhouse plan with a conceptual courtyard neighborhood of roughly 260 homes, including substantial family-sized apartments. Neither study establishes that construction would be feasible under today’s rules and costs; both help identify the changes that a serious pilot would need to test.
San Francisco and the Housing Abundance Philanthropy Fund
I’ll be in San Francisco this month for Renaissance Philanthropy’s Housing Supply & Affordability Reception, taking place September 15 at The Kelsey Civic Center. The gathering brings together people working on housing production and affordability as Renaissance develops its Housing Abundance Philanthropy Fund. The fund is seeking philanthropic support for early-stage approaches that could improve how housing gets produced, including better technology, development models, regulatory processes, and financing. Its emphasis is on testing ideas whose benefits could extend across many projects and communities.
Renaissance has included our “Large Sites, Small Builders” proposal in the catalog it is sharing with prospective funders. The work I’m seeking support for would help cities and local developers evaluate courtyard housing on real sites, using an AI-assisted feasibility platform connected to a library of building prototypes, local regulations, and development-cost assumptions. A planning department could compare the housing potential of different rules, while a small builder could assess a prospective site before committing to a full professional feasibility study. For larger sites, the same work would help establish how a coordinated plan could be divided into smaller, independently financeable building opportunities.
Philanthropic funding would allow us to develop and validate those tools with partner cities, alongside model ordinances and financing frameworks that could be reused elsewhere. It would also support measuring whether the system actually reduces the time and expense of early development work and helps more projects reach permitting. For me, the public value lies in making that knowledge accessible to municipalities, community organizations, and smaller builders who cannot afford to investigate every promising parcel from scratch. The proposed grant would fund this shared development capacity rather than provide construction capital for an individual property.
Berkeley in October
I’ll return to the Bay Area for the Progress Conference, October 8–11 in Berkeley, hosted by the Roots of Progress Institute at the Lighthaven campus. The Progress Conference brings together people working across technology, science, policy, and culture to explore how to improve living standards and make ambitious projects possible. No conversation about improving living standards and ambitious projects is complete without a discussion of housing and urbanism, and the institutional changes needed to solve the housing crisis and our cities.
My talk, “The Next Urban Renaissance,” will explore how AI could help bring back the fine-grained city by reducing the coordination costs that make neighborhoods of many small buildings so difficult to develop today. I’m especially interested in how new technological capabilities can augment state capacity, enabling public-private partnerships that revive the great urban tradition of small-parcel density, renewing the promise of cities where people across society can own a home and raise a family.
The conference is already sold out, but the talks are being recorded.
I’m looking forward to continuing these conversations during both Bay Area visits, particularly with people interested in city partnerships or a courtyard-housing demonstration project.
Parking reform is also site-plan reform
On August 25, Asheville adopted changes to its development ordinance that allow duplexes in all residential districts and certain mixed-use districts, expand flexibility for accessory dwelling units, and eliminate minimum off-street parking requirements. The city’s council meeting summary records the approval of all three amendments.
Two weeks earlier, on August 10, Bellingham, Washington, voted to make its elimination of automobile parking minimums permanent. The permanent rules took effect August 25, following an interim system that had been in place since January 2025.
Under these reforms, developers remain free to provide parking to meet lender requirements and market demand. Parking reform removes the government-mandated minimum, leaving developers, rather than the state, to determine how much parking a project needs.
Parking reform is critical for courtyard urbanism because parking requirements affect both the physical form and financial feasibility of this building type. On a small urban parcel, surface parking consumes land that could otherwise carry housing or green space. Yes, structured parking can free the land, but its ramps, columns, and, most of all, its extraordinary construction costs often make it a poor choice. A larger development can spread these costs across more units, and this is why we have so many gigantic apartment buildings with expensive units built on top of parking podiums that kill street life. Bellingham’s own explanation of the reform identifies both the land consumed by parking and its construction expense as obstacles to housing.
Ultimately, a rule about car storage can influence how much land must be assembled and which builders can afford to participate. It can also decide whether there is protected outdoor space on the site, where children can play safely away from traffic.
Some parking is necessary, but walkable, transit-rich neighborhoods often need far less than regulations require. I often give the example of my first apartment in Chicago, which was a $900-a-month one-bedroom with separate living and dining rooms in a beautiful prewar building. Its point-access layout gave the apartment windows on multiple sides and wonderful natural light. Part of what made it affordable to a broke graduate student was that the building provided no parking. Residents who owned cars parked on the street, and I happily got around by bike and public transit. It was a fantastic fit for that stage of my life.
Now, as a parent of three, I have a car because my needs are different. But those needs should not dictate what every household must pay for. Requiring one or two parking spaces for every apartment makes it harder to offer homes that are affordable in part because they don’t come bundled with the cost of parking. A garage space can cost $30,000–$50,000 to build! We should make room for households at different stages of life, with different needs and budgets, rather than requiring everyone to pay for the same package.
Asheville’s approach of allowing small multifamily housing while removing parking minimums is promising and worth watching. It is not productive to permit more homes on paper if parking requirements still make them physically or economically infeasible to build.
Oklahoma takes on the small-apartment-building code
On August 18, the Oklahoma Uniform Building Code Commission advanced recommendations from its Affordable Housing and Consolidated Dwellings Technical Committee. Housing Forward Oklahoma’s account of the vote describes a package that would allow qualifying single-stair residential buildings up to four stories, create a path for four-unit homes under residential-code requirements, and better match sprinkler standards to the scale of small apartment buildings.
Permitting four-unit buildings under residential-code requirements is a significant reform and worth watching. But it is a baby step toward the ambitious goal, which is a clear residential-code pathway for small multifamily buildings containing up to 25 homes, with flexibility for shops, offices, and other compatible ground-floor uses.
The goal should be to make small apartment buildings straightforward and repeatable to build, opening housing production to more local builders, housing manufacturers, and property owners. Design, engineering, and compliance costs weigh heavily on a project when they must be spread across relatively few homes. A simpler, more predictable code pathway could help reduce that burden without sacrificing fire safety, structural integrity, or accessibility.
The Oklahoma recommendations still have to proceed through formal rulemaking and subsequent approval before taking effect. Nevertheless, the commission’s action is significant because it moves small-multifamily reform into the institution responsible for administering the statewide building code.
The single-stair question has received considerable attention because of its consequences for floor plans. As I discussed in my recent essay on party walls and point access, fitting two remote stairs into a small apartment building can consume valuable area and encourage the use of a corridor to connect them. A point-access plan can organize more easily several homes around one protected stair and elevator core, creating opportunities for shallow floorplates, dual-aspect apartments, and larger homes.
The CRA and the question of how to finance neighborhoods of small buildings
Imagine a local builder planning a 12-unit apartment house with rents that working households can afford, without government subsidy. Now imagine several builders doing the same around a shared courtyard. The neighborhood could be planned together, but each building still has its own loan and owner.
A larger developer could create the same kind of neighborhood by building an entire block, with each building designed from the outset to become a separately owned property. Some could become resident-owned cooperatives or condominiums; others could be sold to individual landlords or rental companies.
The important thing is that dense walkable neighborhoods that are compatible with home ownership and family life cannot be made up of large apartment buildings that are owned by a single entity. We need a financing pathway to building many small multifamily. Whether it is small builders working together, or a larger developer creating opportunities for many small owners, we need a lending system that supports both coordinated development and the financing of individual buildings. Planning at a large scale should not require permanent ownership at a large scale.
A proposed banking-rule change offers an opening to make this case. On August 12, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation proposed revising their Community Reinvestment Act regulations. The CRA evaluates how well banks meet their communities’ credit needs, including through lending for qualifying affordable housing. In practical terms, that lending can help a bank earn a better regulatory evaluation. Federal Register
One provision is particularly relevant because it would clarify when banks can receive recognition for financing housing that is affordable without government subsidy. Unsubsidized housing can already qualify, but the agencies acknowledge that the existing rules are not sufficiently clear. The proposal would clarify the standards. Federal Register
For Courtyard Urbanist, the opportunity is to bring the financing needs of small apartment houses and courtyard blocks into this discussion. I want regulators to hear from the builder seeking a loan for 10–25 homes, and from developers trying to divide a larger site among small builders. Where have otherwise viable projects stalled? Was the bank unsure whether the housing would qualify under the CRA, or was the loan simply too small to justify the work involved? Clearer rules might help with the first problem; the second requires attention to the economics of small loans.
Comments are due October 13, and this remains a proposal rather than an adopted rule. Federal Register The Federal Reserve has not joined it, so it would not itself change the CRA rules for the banks the Fed supervises. Federal Register Nor does supporting this provision mean endorsing the entire package. My interest is in using the opportunity to argue for something concrete: a financing system that makes room for many small buildings, builders, and owners.
I would like to hear from developers or lenders who have examples of qualifying unsubsidized housing that has struggled to obtain financing due to uncertainty about CRA treatment. Please email projects@courtyardurbanist.com if you would like to compare notes and discuss this opportunity.
Lending volume is rising while underwriting tightens
Research published by Arbor Realty Trust and Chandan Economics in August found that multifamily loans with original balances between $1 million and $9 million were running at an annualized pace of $71.6 billion through the second quarter of 2026. That pace was 2.8 percent above the $69.6 billion total for 2025, putting the sector on track for a third consecutive annual increase.
Refinancing accounted for 65 percent of second-quarter volume, so these figures should NOT be read as evidence of a boom in construction loans for small apartment buildings. Because the series groups properties by loan size and includes financing for existing assets, it tells us more about the market for smaller apartment properties than about the ability of a new builder to finance a ground-up project.
Arbor’s Q3 report, released in August, describes credit conditions tightening as debt yields rose and lenders sought more income protection. Its August 28 investment snapshot likewise describes a selective capital market.
For courtyard development, I care about the gap between financing an existing property and financing a new one. A lender can refinance a stabilized apartment house while declining a proposal with construction risk and uncertain future rents. It’s great that there is higher lending for small apartments, but what we really want to see is more evidence that a feasible 12-unit building can obtain financing.
When a gas station pencils and housing does not
The former Sunoco site at 1442 U Street NW in Washington, D.C., provides a useful illustration. After its fuel infrastructure was removed, the property was sold to a fuel distributor and expected to return to gas-station use.
The Washington Business Journal’s August 25 report describes a site that, under different market conditions, could have supported 100 or more homes. It’s a prominent urban intersection in a place where demand for housing is very high. Nevertheless, it was easier to develop the property as another gas station than redevelop as housing.
It’s not clear what individual reform (or matrix of reforms) would have led this property to be developed as housing rather than a gas station. But it is a sobering reminder that upzoning alone will not always lead to more development. Developers have to survive an ordeal of demands … from land acquisition and remediation (probably significant in this case), design, construction, financing, and expected revenue before they move forward with a housing project rather than a gas station.
What The Marco teaches us
In Prosper, Texas, north of Dallas, BlackStone Communities is proposing a 143-acre mixed-use development inspired by Italian urbanism. The Marco would include up to 4,400 homes, offices, retail, restaurants, hotels, and cultural uses around a lagoon and canal system spanning more than 15 acres. On August 18, Prosper’s Planning and Zoning Commission voted to advance the proposal to the Town Council.
The Marco is interesting because its designers take seriously Americans’ appetite for dense, walkable, “European” neighborhoods, the same longing I explored in “From the Mushroom Kingdom to Haussmannian Paris,” my recent essay on Universal’s recreation of a Parisian neighborhood. The idea behind this development is to make that walkable European experience part of everyday life, placing homes within walking distance of shops, restaurants, the waterfront, and public spaces, with enough architectural variety to make walking around pleasant and agreeable.
However, the proposal reveals two limitations central to the work we are doing at Courtyard Urbanist.
The first concerns the structured parking at the center of the apartment blocks. In the conceptual layout, several large residential buildings wrap around parking rather than usable open space. This may not be the developer’s design preference, since Prosper’s multifamily zoning standards actually prescribe a central garage surrounded by residential units. And the regulations reflect the assumption that everyone depends on cars and wants parking, and also the assumption that hiding parking from public view is desirable Ecode360
The developer could have sought approval for different parking requirements or locations through the planned-development process, although approval would not have been automatic. My criticism therefore concerns, as always, both the design and the rules that shape it. Understandably the policy maker and developer want to keep cars out of the public spaces, but in requiring that parking go inside the block, in an expensive parking structure, they are denying residents a usable backyard and also making the housing more expensive.
A residential courtyard can give children somewhere to play without crossing a street and bring neighbors together in a garden overlooked by their windows. These are central to the house-like urban living that we are trying to revive, which is based an identifiable apartment house, an entrance shared with a relatively small number of households, and a direct connection to protected outdoor space. When parking occupies the block interior, the development may reproduce the outline of a courtyard block while losing much of its residential value. Where that parking takes the form of a garage, its construction cost also becomes part of the cost of delivering the homes.
The second limitation concerns the difference between architectural variety and genuine independence. The Marco borrows the visual language of a fine-grained European city, but it is being planned as a 143-acre master development. That scale is not itself the problem. The question is whether the completed neighborhood will support many independently owned buildings, rather than simply give large complexes the appearance of smaller ones. Community Impact Newspaper
That distinction between a fine-grained façade and fine-grained property is the subject of my recent essay on the granular block. Separate parcels and buildings allow different owners to finance, maintain, adapt, or replace their properties at different times, while the street and block provide a durable framework around them. While architectural variety can be designed into a single project, the ability to evolve independently requires subdivision into independent building segments that can be bought and sold separately.
For Courtyard Urbanist, the “many different buildings” adaptability, but just as importantly, the opportunity to own a home and have a meaningful stake in a dense, walkable neighborhood. Small apartment houses could accommodate resident-owned cooperatives and modest condominium associations alongside individually owned rental buildings. Combined with family-sized homes and shared yards, those arrangements could offer households more ways to remain in an urban neighborhood as their lives change.
A master developer could plan for this from the outset, creating separately financeable buildings and clear agreements for shared gardens and infrastructure. This is frequently done with single family home and townhouse developments, and with multifamily developments in Europe. Developing a neighborhood together should not require keeping it under one owner forever. The test is whether the buildings can actually be owned, financed, and altered independently, and not just if they LOOK like they can.
I want the care devoted to the waterfront and architectural character to extend to the gardens behind the homes and the ways people can own them. That would make the Marco a more useful precedent. It could aspire to something greater than attractive lifestyle destination, and build a neighborhood designed for family life, long-term investment, and a broad community of owners and renters.
AI-assisted permitting
An August 20 report by Stateline describes cities testing AI tools that identify missing information and other problems before an application reaches a permit reviewer. In their examples, public employees are using the tools to reduce repeated correction cycles, saving them time and capacity for the final decision-making.
The potential benefit for small builders lies partly in reducing work that must otherwise be repeated for every project. Both a twelve-unit building and a much larger development require zoning research, drawings, coordination, submissions, and revisions, but the smaller project has fewer homes across which to distribute that expense.
This is a hypothesis worth testing, and a useful measure will be whether a city can reduce the professional time and uncertainty involved in demonstrating compliance, without creating new errors or making it harder for applicants to understand and challenge a decision.
What August clarified
August left me more convinced that housing reform needs to be judged at the scale of a buildable project. I want to know whether a local builder can put family-sized homes on an ordinary urban parcel, with a useful shared garden and financing that works. Parking and code reforms matter because they can change that answer, but their effects need to be tested together.
A fine-grained courtyard block requires separate buildings to meet safely at their boundaries, small parcels to be created and financed, and shared courtyards to have durable ownership and maintenance arrangements. Its permitting costs must be manageable for a builder undertaking twelve homes, while its financing must accommodate a property that does not look like either a detached house or a conventional institutional apartment complex.
A consolidated megaproject can bring many of these decisions under one owner and one management structure. The alternative requires an operating system that makes coordination across property lines predictable enough for small buildings to remain independently financeable and owned. That is a practical design and institutional problem, and it is where I want Courtyard Urbanist’s demonstration work to concentrate.
For cities, lenders, and landowners interested in that work, I would start with three practical tests.
Test the rules on an actual site. Compare how parking, dimensional standards, and building-code requirements interact in a small multifamily project, so the next reform addresses the constraint that is actually preventing construction.
Document the financing problem. Use the OCC–FDIC comment period to explain where qualifying unsubsidized small multifamily encounters uncertainty under CRA evaluation, while distinguishing those problems from ordinary underwriting constraints.
Test whether a large site can support small builders. Explore a parcel and ownership structure that allows individual buildings to be financed separately while retaining shared courtyards and a coherent public realm.
If you are working on a site or a local housing initiative where this could be tested, please get in touch through our Work With Us page. We can begin with rapid feasibility testing and identify the design, policy, or community-engagement work needed to move it forward.
To family-friendly courtyards in America,
Alicia Pederson
Courtyard Urbanist