The context in which the term missing middle is used is one in which the housing in an area consists of either single, detached houses or mid to high rise multi-unit buildings (often new developments). The term is said to have been coined in 2010 by Daniel Parolek.

The missing middle in this context refers to multi-unit or clustered housing, in keeping in scale with single-family houses. Advocates of missing middle housing look to it as a way to meet a demand for increased development and increased density, and as a driver for walkability, while keeping to an accepted, familiar (in neighborhoods where single-family houses are prevalent) scale. As some of the missing middle styles present a narrower footprint, they are also indicated for use in infill development.

The development of missing middle housing is often impeded municipally by zoning that restricts construction in residential areas to single-family houses - a throwback in North America to the 20th century when this kind of zoning was developed to exclude minorities and low-income people, many of whom could not afford to rent or buy single-family houses, from many residential areas.

Examples of types of housing that fit the category:

Townhouses
Triplexes
Duplexes
Fourplexes
Courtyard apartments
Rowhouses
Bungalow courts
Live-work buildings

References

The Color of Law by Richard Rothstein

"Toronto area housing market has a 'missing middle,' new report says" Shannon Martin, CBC

Missing Middle: Responding to the Demand for Walkable Urban Living

Whatever Happened to the Toronto Duplex, Toronto Star, Robin Levinson King