Investment in mixed-use development can be an effective strategy to attract and retain tenants, but investors must be cognizant of local zoning regulations to ensure their planned build complies with community goals and values.
Mixed-use developments tend to thrive in locations with promising residential housing markets and businesses that support their local economies. Mixed-use development is an emerging trend that promotes sustainable and vibrant cities.
Vertical Development
Mixed-use development has become one of the most prevalent urban planning approaches worldwide. As urban populations have expanded exponentially, so has our demand for walkable communities offering retail stores, cultural or recreational amenities, housing units and offices for residents and visitors.
Attracting diverse tenants allows real estate investors to reach a wider market segment and form a larger pool of renters – thus helping to reduce risk in real estate investing. Multiple income streams also serve to offset declining commercial demand during economic downturns.
Identification of opportunities for mixed-use development requires cooperation among local stakeholders and an array of planning and policy tools. Start by gathering input from institutions like libraries and schools about local needs and interests before engaging with transportation authorities to link plans for transit-oriented development (TOD) with community benefits like reduced automobile traffic and emissions.
Horizontal Development
Horizontal development is an approach that co-locates residential and commercial properties within walking distance, designed to increase physical activity within communities by placing residents near everyday destinations that make engaging in physical activity simpler and more feasible. This development type can provide residents with increased opportunities for daily physical activity participation.
Horizontal mixed-use developments offer many advantages that attract a diverse pool of buyers and renters, creating a stronger market. Furthermore, income diversification reduces reliance on one market sector while protecting against economic fluctuations.
However, before embarking on this strategy it is crucial that one takes into account both their needs and any possible barriers – for instance mixing residential and commercial spaces may increase noise levels causing disturbance to residents of both. Furthermore, parking and transportation solutions must meet community goals, and one should take into account any possible effects horizontal mixed-use development can have on gentrification and housing affordability.
Transit-Oriented Development
Communities that prioritize nonvehicular access can encourage mixed use development through land-use policies that promote vertical mixed use buildings (vertical mixed use) or horizontal mixed use properties (horizontal mixed use). Such policies could include requirements that promote such mixed uses in one building (vertical mixed use) or rezone areas accordingly (horizontal mixed use).
Some TOD projects incorporate buildings in an area surrounding a transit station to form transit-oriented development (TOD), including retail space, offices, housing units and public areas like parks and greenways (horizontal TOD).
TOD can be an integral component of community design efforts aimed at increasing physical activity, such as those promoted by the Centers for Disease Control and Prevention’s Healthy People by Design resources29. These resources emphasize that communities can increase physical activity by designing walking-friendly neighborhoods that incorporate walking features into all places such as workplaces, schools and residential spaces – this may also involve site specific redevelopment, neighborhood revitalization initiatives or brownfield/Smart Growth initiatives in both urban and rural settings.
Budget Allocation
Mixed-use development offers convenience to its residents while meeting sustainability goals by encouraging people to walk, bike or take public transit instead of congesting highways with commuter traffic.
Real estate developers can mitigate risk by diversifying both their property portfolio and tenant pool. If residential markets falter, commercial and industrial markets can help hold up projects until demand returns.
Mixed-use development is an increasing trend, yet its challenges should not be underestimated. To maximize its benefits, developers must implement new practices and adopt modern technologies that streamline operations while helping manage costs effectively.