Integrating real estate uses into communities allows them to become more tax-efficient and resilient, reduce automobile use, foster community engagement and enhance health of occupants and users.
Local governments can encourage mixed-use development by offering incentives such as permitting fee reductions, tax abatements and density and building height bonuses in designated growth areas or downtown districts.
Origins
Historically, communities developed buildings and districts with mixed use that included shops, restaurants, offices and residential units. But over time, due to concerns regarding pollution and overcrowding, city planners began favoring housing located further from commerce and industry; these decisions coincided with suburban living and car transportation growth.
Interest in mixed-use development has recently experienced a revival, as many redevelopment projects return older urban commercial districts to their original mixed-use forms, or create entirely new ones.
Lenders often assess mixed-use projects using the same criteria they would for conventional building or development projects, including creditworthiness, market feasibility and project financial viability. Community loan and grant programs may help make an otherwise nonviable project viable by taking advantage of local or state housing and economic development agencies, community-based nonprofit organizations or national organizations supporting affordable housing, small business development or historic preservation as resources for financing solutions.
Benefits
Mixed-use development offers many advantages to urban residents, businesses, and the environment. By consolidating housing with restaurants, services, schools, and cultural facilities into one neighborhood, mixed-use developments reduce car travel while simultaneously decreasing carbon emissions – an especially valuable benefit in cities with rising traffic congestion or climate change issues.
Societal benefits also accrue through creating shared community spaces like plazas and parks that enable residents to interact without using vehicles; one study demonstrated that low traffic areas had three times as much community interaction compared to areas with high volumes.
Mixed-use developments offer investors consistent cash flow due to the wide array of tenants they attract, helping to protect against economic fluctuations. Residential components also create an established customer base which helps stabilize rent prices. Furthermore, these projects often incorporate energy-saving features to reduce natural resource and water consumption.
Challenges
Building vibrant mixed-use communities takes careful planning and active engagement from residents and local business owners. Engage residents and business owners in collecting community needs and priorities; then leverage modern zoning reforms and development incentives that encourage sustainable, walkable neighborhoods.
Develop a balanced mix of uses to promote economic development and decrease automobile dependence by shortening trips, encouraging walking, biking and public transit use and decreasing energy costs by decreasing heating, cooling and lighting needs. Close proximity between commercial and residential areas reduces heating, cooling, lighting needs and thus energy bills by as much as 20 percent!
However, creating successful mixed-use developments may present various obstacles, including traffic congestion and noise pollution issues as well as increased infrastructure requirements. Furthermore, local residents may object to increased density or changes to neighborhood character, but these concerns can be overcome through open communication channels and effective governance structures. McClure has the expertise needed to navigate such challenges successfully and deliver successful mixed-use developments – so reach out today and discover more of our services.
Examples
One key characteristic of mixed-use developments is their proximity to local amenities – known as walkability – making this feature one of the most sought-after among millennial homebuyers.
Mixed-use developments typically comprise buildings that house residential, retail and office spaces all at the same time. They are usually organized around a central space such as a courtyard or park to encourage interaction among residents while simultaneously building community spirit.
Mixed-use developments often include complexes containing hotels, gyms, restaurants and stores that serve specific niches – often found near airports, monuments or tourist spots.
Investment opportunities in mixed-use properties come in various forms, from direct investments and existing developments, to direct investing or purchasing them outright. Before making a decision on any type of investment strategy, investors should carefully examine its associated risks and rewards before making their choice. In addition, prospective investors should research local zoning laws to make sure that mixed-use developments can occur safely within their area.