Mall-to-residential conversions are creating mixed-use projects nationwide

Traditional shopping centres, which were once bustling with activity Trade centersare now being transformed into mixed-use communities that include residential housing, adding much-needed housing supply to the market.

The move is far from solving the housing affordability crisis — a challenge that requires multiple systemic changes — but some industry experts say it could still help address the housing shortage, especially in states where the problem is more severe, such as New Jersey and Florida, according to a recent report from Realtor.com.

“Converting underutilized or vacant mall space into housing can be profitable for both realtors and home seekers,” Hannah Jones, senior economic research analyst at Realtor.com, told FOX Business.

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These properties leverage existing infrastructure to bring well-located homes to the market faster, avoiding many of the associated delays, Jones said Development of new lands.

However, there are still significant obstacles to converting commercial properties to residential use, especially when it comes to local zoning laws and construction costs.

Local governments control zoning laws that determine whether land is used for commercial or residential purposes, said Darrell Fairweather, Redfin’s chief economist. Converting commercial districts into mixed-use projects requires changes to these zoning laws, but such efforts often face resistance from residents, according to Fairweather. For example, she noted, some people fear that more housing, especially affordable housing, will increase traffic or attract unwanted tenants.

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The problem is compounded because many mall structures were also not designed for residential use, making conversions expensive, according to Jones. In addition, higher labor and material costs often make complete demolition and rebuilding more practical. These additional expenses could ultimately cause home prices to rise, reducing potential affordability benefits, Jones said.

“Mall-to-residential conversions represent an innovative way to leverage existing infrastructure to add supply in tight housing markets, but cost and design challenges mean they are not a silver bullet.” Bullet for affordability“Jones said.

However, Jones noted that although this trend is growing, it is only concentrated in certain areas.

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As more projects progressed, the physical and social landscape of American malls began to change.

Notable Properties Charlie Opler, CEO of Sotheby’s International Realty, said the malls that many grew up visiting in the 1980s through 2000s are being replaced by potential residential sites, restaurant destinations, movie theaters or mixed-use projects that feature upscale retail alongside residential space.

Riverside Square in Hackensack, New Jersey, which sold a piece of its land to an apartment complex and now houses more than 15 restaurants along with some of the country’s upscale stores, exemplifies this trend, according to Opler.

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“The housing component of many of the sites is to utilize excess parking or land to create more housing, whether it’s homes for rent or for sale,” Opler said.

Over the next 20 to 30 years, Opler predicts that many older malls may be torn down as vacancy rates rise and replaced by transportation and housing centers, depending on the location.