The popularity of mixed-use development may be on the rise, but this type of project is certainly not a new concept. In fact, until sometime in the 20th century, most development in the United States was concentrated in urban areas where mixed-use projects allowed Americans to live and work in walkable areas. It wasn’t until the introduction of the automobile that trends started to change. However, in recent years, the tide has shifted back to favor mixed-use development.
Mixed-Use Development: Mixed-use development is a term that refers to a development that combines two or more residential, institutional, commercial, industrial, and/or cultural uses.
There are three main types of mixed-use development:
- The vertical mixed-use development, which combines different uses within the same building
- The horizontal mixed-use development, which is made up of single-use buildings within a mixed-use zoning area.
- The mixed-use walkable neighborhoods combine vertical and horizontal mixed-use.
There are multiple upsides to mixed-use development, including increased economic viability, increased tax revenue, lower infrastructure costs, budget cost savings, and healthier, walkable places. It’s also worth noting some downsides, including noise transfer from commercial to residential areas, limited parking space, and congestion.
Are you curious about mixed-use development but aren’t sure where to get started? Read on to find out more about this project type.
Table of Contents
What is mixed-use development?
Mixed-use development can be defined as pedestrian-friendly development that combines two or more residential, institutional, commercial, cultural, and/or industrial uses. While the term “mixed-use” has seen a surge in popularity, it can be confusing. This could be attributed to the fact that it’s held different meanings in different places over the past couple of years.
For example, in the past, mixed-use zones had to declare a primary and second use, with the primary use, such as residential, influencing the building’s configuration, disposition, and orientation. As a result, it marginalized the building’s potential to effectively host other office or commercial uses. Furthermore, a mixed-use zoning designation meant that the landowner could choose a specific use, such as either residential or commercial. Therefore, while the zoning district had a variety of uses, the implementation was single-use.
Today, many people assume that mixed-use development is limited to a multi-story building that incorporates commercial use on the first floor with residential uses on the upper floors. A more accurate characterization of mixed-use development entails the following features:
- It provides three or more notable income-generating uses (such as residential, retail/entertainment, hotel, office, and/or cultural/recreation.)
- It creates a walkable community with pedestrian connections
- It fosters integration and compatibility of land uses.
Therefore, a technical definition of mixed-use development is three-dimensional, pedestrian-focused places that layer compatible land uses, public amenities, and utilities together at various scales and intensities. This mix of uses allows for people to live, work, shop, and play in one place, which can then become a go-to spot for people from other neighborhoods.
Types of mixed-use development
While mixed-use development can take on many forms, it’s typically categorized as:
A. Vertical mixed-use development
This combines a variety of uses in the same buildings. Lower floors typically provide for more public uses, whereas the upper floors provide for more private uses. For example, the ground floor could have retail shops and restaurants, the second floor and up having professional offices, and uppermost floors comprising some form of residential units, such as condos or apartments. In urban areas, it’s not uncommon to find an entire neighborhood or block made up of vertical mixed-use buildings.
B. Horizontal mixed-use development
This consists of single-use buildings within a mixed-use zoning district parcel, which allows for a wide variety of land uses in a single development project. In more urban areas, this mixed-use approach dodges the financial and coding complexities that come with vertical mixed-use development while achieving the aim of placemaking that comes with combining complementary uses in one place. In less urban areas, this approach offers the advantage of sharing amenities and utilities while providing an easier way to have a mix of uses within a walking distance.
C. Mixed-use walkable neighborhoods
With a wide variety of possibilities, these combine vertical and horizontal use mixing in an area that is ideally a 5-10 minute walking distance of a neighborhood center.
Pros of mixed-use development
1. More vibrant communities
One of the main reasons why mixed-use projects are surging in popularity is because of the amenities that they tend to offer. The blending of a variety of uses creates an intriguing sense of place: there are numerous options for shopping, working, dining, living, and socializing.
While this is a more organic experience in built-out urban areas, it’s also an increasingly common occurrence in new mixed-use projects, particularly those in suburban locations. They intentionally integrate parks, plazas, and sidewalks that encourage interaction among community members that wouldn’t normally take place in a traditional real estate project.
Whether in an urban or suburban setting, mixed-use development projects can serve as an anchor for a community – a vibrant space for everyone to enjoy.
2. Mixed-use developments have improved walkability
Mixed-use developments are more walkable than conventional real estate projects. A survey conducted by the National Association of Realtors (NAR) finds that in general, Americans prefer walkable communities now more than they ever have in the past. Nearly half of respondents indicated that they preferred living in communities with smaller backyards and smaller houses but within easy walking distance to local retail, restaurants, arts, and cultural institutions, and offices.
3. Lower infrastructure costs
An analysis conducted by Smart Growth America found that on average, municipalities save up to 38 percent on infrastructure costs like sewers and roads when serving compact development instead of large-lot subdivisions.
4. Higher tax revenue
Mixed-use developments bring about an increase in property tax revenue. As communities increase in size, they extract more value per acre of land than they’d realize with conventional, single-use, or single-story development. Similarly, studies have also shown that projects with mixed-use property have inherently operating costs.
5. Less development risk
The blending of a variety of uses reduces the risk for real estate investors. If the local retail center isn’t thriving, an investor still generates income from residential uses. If the restaurant tanks, the investor can still rely on cash flow from office spaces. Mixed-use development allows an investor to soften the total impact of a poorly performing business on their overall investment portfolio.
6. An increased exposure to customers
Because mixed-use projects blend a variety of uses, it also pulls in more interest than a typical single-use project would. For example, someone shopping in a retail shop can easily pop in for a bite to eat at the restaurant co-located next door.
7. Mixed-use developments are relatively more sustainable
Another appealing aspect of mixed-use development is its positive impacts on the environment. Many mixed-use projects repurpose old buildings and avoid overbuilding, which promotes sustainability.
Furthermore, improved walkability means that there are fewer cars on the road, which can help to lower carbon footprint.
Cons of mixed-use development
1. Conflict over parking space
Parking space, or lack thereof, is a common issue that arises from mixed-use developments. A common scenario involves people coming into a retail shop or restaurant and wanting to park as close as they can, and a resident comes home from work, goes out shopping and comes back, only to find that they have lost their parking space, despite the presence of a sign that says “Residents Only”. As a result, an increasing number of property managers are finding that shared parking, whether it’s on-grade or in the building, has to be separated, and they also have to be vigilant about policing.
2. Noise pollution
Picture the scenario of a mixed-use development that features a popular retail center, a thriving restaurant, and residential units. The traffic coming in from shoppers and diners could pose some noise challenges to the residents in the neighborhood, especially if there is no acoustical component that keeps noise from finding its way into units.
3. Filth
In cities where waste management is an issue, having residential units in the same place as commercial facilities may not be the best idea. The stench of the trash generated by restaurants or similar facilities could pose serious discomfort to neighboring residents.
4. Potential psychological issues
For most people, it’s important to leave the work scene, unwind, and relax. It may be hard for some to take their mind off of work if they live in a mixed-use development where their place of work is just a couple of floors beneath their bedroom.
Examples of mixed-use development
The following mixed-use projects are located in urban areas, with designs inspired by history, nature, and art.
1. The Bartlett
The Bartlett is a property in Arlington, Virginia that offers residents the opportunity to shop, work, and indulge in an active social life without leaving the block in the Crystal City neighborhood in which it’s located.
Made up of nearly 700 units, the 23-story building comprises studios and three-bedroom units. Amenities in the building include a sports bar, a fitness and yoga center, two dog parks, an expansive rooftop club or deck space, and an outdoor private dining terrace with scenic views. There is a Whole Foods on the ground floor that residents have private access to, as well as a coffee shop called Joe’s Cold Roast Coffee shop.
2. Chaoyang Park Plaza
This is a collection of 10 buildings located on the southern edge of Chaoyang Park Plaza in Beijing, China. The complex covers approximately 720,000 square feet of office, residential, and commercial space. The residential portion is known as the Armani apartment complex and it sits across from the plaza’s most distinct office towers, divided by low-rise commercial spaces.
3. Poste
This is a mixed-use property in the Walnut Hills neighborhood of Cincinnati, Ohio. The 124-unit property comprises 5 two-bedroom townhomes, 18 studio apartments, 28 two-bedrooms, and 73 one-bedrooms, along with a resident lounge, interior and exterior bike parking and storage, coffee and tea bar, and 4,345 square feet of commercial space. The units are pet-friendly and come with amenities such as valet trash and recycling pickup and included cable and internet.
4. Staten Island Urby
This is a 571-unit mixed-unit development that features 35,000 square feet of restaurants, retail space, residential units, parks, and walking paths. The project offers a wide variety of amenities – in addition to the public outdoor spaces. There’s also a two-story fitness center, a pool, a bodega, an entrance cafe and coffee shop, a communal kitchen with flex spaces for cooking classes, and an urban farm that’s situated above the parking garage. The Staten Island Urby is conveniently adjacent to the Staten Island Railroad Station and a four-minute subway ride to the Staten Island Ferry.
5. Cove
The Cove is a 60-unit 50,000-square-foot mixed-use development located in the Capitol Hill neighborhood of Seattle, Washington. This project was designed with sustainability in mind, with green features such as:
- Triple glazed windows make a significant difference in energy performance
- Sound attenuation so that residents aren’t disturbed by traffic noises from the busy neighborhood.
- Heat and air-conditioning are supplied by high-efficiency split heat pumps.
- A 3,000-square-foot green roof, complete with lush vegetation and seating.
- Solar panels on the south side of the building that harness the energy used to power the common areas.
6. VINE
This is an 11-story mixed-use project located on Hoboken’s western edge in New Jersey. It features a large plaza, a restaurant, and a day-care center, among other amenities. Sustainable design choices include a vegetated roof, bamboo on the walls and flooring, and a cogeneration system that provides backup in case of power failures.
7. Liberty Lorton
This is a mixed-use development comprising apartments, townhouses, single-family homes, retail space, amenities, and commercial space. Formerly a prison, Liberty Lorton currently offers walkable access to parks, tot lots, and a cross-country trail that cuts through the project.
Final thoughts
Whether you’re a prospective tenant on the hunt for a unit in a mixed-use development or an investor thinking about buying this type of property, it’s important to be informed about what exactly they are and the upsides and downsides of living in or purchasing one. This comprehensive guide to mixed-use development can help you get started in terms of research before you take the plunge.
