In the heart of a bustling city, where once the vibrant echoes of commerce filled the air, stood the hollow shell of a mall.
Its once gleaming floors, now dulled by the passage of time, whispered tales of a bygone era.
But within these walls, a visionary spark ignited a transformation, repurposing abandonment into a sanctuary of living spaces.
The mall, a relic of retail’s golden days, was on the cusp of a renaissance, poised to become a thriving residential haven, intertwining the nostalgia of the past with the promise of a sustainable future.
You might read a passage like that in some future publication in any number of metropolitan areas in America. That’s because a trend that started a few years ago is finally starting to pick up steam.
Converting commercially zoned real estate to residential property is not a novel idea, but it’s one that has become more in vogue with the ever-growing housing shortage in many American cities.
Innovative Conversions
The transformation of abandoned malls into affordable housing units, like the Irondequoit Mall in New York – a notable project that turned a former Sears store into 73 apartments, with additional construction adding 84 more units – is a trend that is growing in popularity to attack America’s housing crisis.
In an analysis of 135 mall redevelopment projects, JLL found that more than half include housing. Comparatively, only about one-third convert to office space.
And while the math may indicate a retail apocalypse of sorts, it doesn’t. The analysis showed that 85% of these projects retained retail on the site, illustrating the value of mixed-use development.
But it’s not just in large shopping malls either. There are strip malls that provide the same opportunity. In fact, a study by Enterprise Community Partners – a housing nonprofit – released last November, showed that if just 10% of suitable vacant strip malls were converted to housing, it would create more than 700,000 new homes.
Strategic Advantages
Mall complexes and strip malls offer unique opportunities for redevelopment due to their age, need for repairs, and ample parking space, making them prime candidates for housing projects.
But more importantly, they offer much more than that for potential residents. Most malls, when they were constructed, were placed in areas that had easy access to public transportation. Additionally, there were a lot of other commercial options built up around them – such as external restaurants, movie theaters, gyms and other health, wellness and salons or beauty options.
By converting these malls to residential spaces, it instantly creates walkable communities with enough amenities and options to keep everything close to home.
National Focus
Cities and states have been proactive with the initiative of commercial conversion for some time. California passed legislation in 2022 that allowed developers to bypass local governments to build homes on commercial land. Policymakers in cities like Washington, D.C., New York, and San Francisco have made efforts to revitalize their downtown areas through commercial-to-residential conversions – which include vacant offices, hotels, and other non-office commercial spaces.
On a national level, the Biden administration released guidance last Fall to support these efforts.
Yet, as momentum grows nationwide, there are still hurdles to cross.
Zoning Challenges
Local zoning laws often prevent mixed-use development, which is a significant barrier to converting malls into housing.
According to the Metropolitan Area Planning Council, which serves 101 cities and towns in the Boston area, the biggest issue is that most municipalities have laws preventing commercial and housing to co-exist on the same parcel of land.
Rewriting these local zoning laws is a roadblock that takes time and resources – but that’s why California’s statewide authorization was so clever.
It speeds up a regulatory process that is often quite sticky. Following that legislation, in 2023 the California Buildings Standards Commission went even further, adopting provisions to the code to make the transition from commercial to residential smoother and more flexible for developers.
Other states could follow California’s example or pass alternative incentives that encourage local cities to update their zoning rules.
