FIMBY: Why The “Family In My Backyard” Movement Should Be On Every CRE Investor’s Radar
For over a century, American zoning has been organized around a single deliverable: the detached single-family house on a large lot. Everything else (duplexes, row homes, small-lot starter homes, accessory units, walk-up apartments above storefronts) got pushed to the side or zoned out entirely. The result is a housing stock that is structurally mismatched to the household formation patterns of the people who actually need housing right now: young families and middle-class working households.
A new framing for the housing supply debate is starting to push back on that legacy, and it has direct implications for how commercial real estate is underwritten, repositioned, and developed across Chicagoland and the broader Midwest. It is called FIMBY, short for “Family In My Backyard,” and it is the most coherent attempt yet to translate the YIMBY supply argument into something that produces homes for families rather than studio towers for transient renters.
Why FIMBY Was Created
The YIMBY (“Yes In My Backyard”) movement emerged in the San Francisco Bay Area in the mid-2010s and quickly became the dominant pro-housing voice in American urban policy. Its argument was straightforward. Restrictive zoning has artificially constrained housing supply in high-demand cities, and the fix is to legalize more housing of all types: by-right, at scale, near jobs and transit. By most measures, YIMBY has been politically effective. California, Oregon, Minneapolis, Montana, and several other jurisdictions have passed substantial zoning reforms in the past five years.
But YIMBY has a structural blind spot. The supply it tends to unlock, high-density multifamily near transit corridors, is not the supply most American families are looking for. A 600 square foot studio in a luxury midrise solves a different problem than a 1,400 square foot three-bedroom on a small lot. Both are housing. Only one of them lets a family raise two kids, host grandparents on the holidays, and put a swing set somewhere.
That gap is the gap FIMBY was built to close. The framing was developed by Ed Pinto and the AEI Housing Center and laid out most clearly in a recent Institute for Family Studies essay tied to AEI’s Strong Foundations: A Playbook for Housing and Economic Growth. Pinto’s argument is that the affordable family housing problem is not new, and neither is the answer. It is a return to the building program proposed by John Nolen in 1918 and Edith Wood in 1919: smaller family-sized homes, on smaller lots, using standardized plans, in walkable street grids that worked for both pedestrians and cars.
That program got sidelined twice over the last hundred years. First, by 1920s zoning enabling acts that, under the cover of public health and safety, created exclusively single-family detached zones with minimum lot sizes that priced out African Americans and Southern and Eastern European immigrants, a practice the Supreme Court blessed in 1926. Then again starting in the 1970s, when administrative discretion replaced by-right entitlement, NIMBY litigation became a de facto development tax, and federal demand-side policy (Fannie, Freddie, FHA, the Fed) pushed prices up against a supply ceiling that local zoning kept artificially low. The result is the housing market we have now: structurally undersupplied, particularly for the family-sized product the demographics most need.
The FIMBY Playbook: Four Levers, 1.6 Million Homes Per Year
What makes FIMBY relevant to CRE professionals, and not just a housing policy talking point, is the specificity of what it actually proposes. The AEI playbook is built around four levers, all anchored in one technical principle: smaller lots unlock more homes on the same amount of land.
First, smaller lots in new residential subdivisions. AEI’s analysis of 12 million single-family homes built since 2000 finds that capping minimum lot sizes at 1,200 square feet would unlock roughly 414,400 net new single-family homes per year nationally.
Second, lot splits and missing-middle infill in existing single-family neighborhoods. Legalizing duplexes, triplexes, quadplexes, five-to-eight-unit multiplexes, and townhomes inside today’s R-1 zones would add an estimated 482,000 homes annually.
Third, by-right residential overlays on commercial, light industrial, and mixed-use parcels. This is the lever that intersects most directly with commercial real estate. AEI’s analysis of 1.5 million multifamily units suggests that allowing residential by-right on existing commercial and light industrial sites could produce roughly 587,000 new homes per year. That is essentially a quantification of the adaptive reuse opportunity already underway in markets like ours, where office conversion to residential and mixed-use is becoming a meaningful share of urban CRE strategy.
Fourth, small-lot subdivisions on a sliver of underused federal land. Just 0.1% of the Bureau of Land Management’s 170 million acres, sited near existing metros, would support around 146,000 new homes per year.
Add the four levers together, and the upside is roughly 1.6 million additional homes annually, with about 70% of them family-sized two-or-more-bedroom units. That is the entire residential investment market shifting toward a product type that is currently undersupplied at almost every price point above subsidized housing and below luxury.
Why This Matters For Commercial Real Estate
The first two FIMBY levers are largely a residential and zoning story. Levers three and four sit much closer to the daily work of commercial real estate.
The single biggest driver of value in suburban Chicagoland CRE over the next decade is going to be what happens when underutilized commercial, retail, and light industrial parcels get re-entitled for residential or mixed-use. That trend is already in motion. Vernon Hills’ Hawthorn Mall redevelopment is moving from a traditional enclosed mall into a walkable, mixed-use district anchored by nearly 600 apartments and reconfigured retail. Schaumburg, Fulton Market, and a dozen other submarkets are working on variations of the same playbook. FIMBY is essentially the policy framework that would expand and accelerate that pattern across thousands of similar parcels regionally.
The pricing case is stronger than it looks. Walkable, family-scaled neighborhoods carry measurable premiums in both residential and retail. Our analysis of how walkability shapes housing affordability and value shows the residential price premium for high-walk-score neighborhoods can run $4,000 to $34,000 per year versus comparable car-dependent locations, with retail revenue per square foot in walkable corridors running roughly 80% higher than in car-oriented retail. FIMBY-style infill would expand the supply of exactly the neighborhood typology that is already commanding a premium in the comps.
The political dynamic is also worth noting. YIMBY-only framing has struggled to clear the suburban political bar, especially in older municipalities where homeowners associate density with displacement. FIMBY’s framing of affordable starter homes for young families, not high-rise apartments, is built to clear that bar. It pulls in a center-right constituency that is concerned about household formation, family affordability, and demographics, and that has been skeptical of dense urbanist YIMBY messaging. For developers and property owners trying to win zoning changes, that broader political coalition is an asset, not a footnote.
What CRE Owners And Investors Should Be Watching
Three implications matter most for owners, investors, and developers in Chicagoland and the broader Midwest as the FIMBY framing gains traction.
First, expect lot-size minimums and by-right residential overlays to be the next round of state-level reform fights. California, Texas, Montana, and Florida have all moved on subsets of these levers in the past two years. Illinois has been quieter, but the underlying demographic and affordability pressures are not unique to coastal states. Owners holding underutilized commercial, retail, and light industrial parcels in inelastic submarkets stand to benefit substantially if by-right residential overlays become the default.
Second, the small-lot product type is going to start showing up in entitlement conversations. Builders cannot deliver a $300,000 starter home on a 10,000 square foot lot at today’s land and construction costs. They can on a 1,200 to 3,000 square foot lot. Municipalities that update their codes to allow this will pull family-sized housing supply, and the demographic and tax base that comes with it, away from those that do not.
Third, mixed-use and adaptive-reuse expertise is increasingly the defining commercial real estate skill set in this cycle. Single-purpose suburban office, oversized commodity retail, and obsolete light industrial all underwrite very differently when residential, particularly family-scaled residential, is on the table by-right. The capital stack changes. The exit changes. The risk profile changes.
For owners and investors trying to read the FIMBY signal in their own portfolios, Van Vlissingen and Co. has been doing this work in Chicagoland and southern Wisconsin for nearly 150 years. Our team combines commercial real estate brokerage, property management, and adaptive reuse advisory to help owners think through whether a parcel is best held, repositioned, or re-entitled as the housing supply landscape shifts. If you are watching FIMBY-style reform conversations in your local market and wondering what they mean for a specific asset, we would welcome the conversation.