Mixed-Use Development Delivers Great Benefits

mixed-use development building with commercial on ground floor and residential uses above

Mixed-use development means a building or complex that includes a mixture of land uses. Typically the term is used when residential uses are combined with office, retail, entertainment, child care, or civic uses such as schools, libraries, or government services.

Mixed-use zoning districts may be huge in scale, or confined to one small site. A common pattern (shown on this page) consists of storefronts or restaurants with apartments on second and third levels.

Mixed-use development is currently in vogue among planners because the compact, efficient land use pattern offers residents an excellent opportunity for short commutes to work and convenience shopping.

The resulting increase in walking, and decrease in short trips by automobile, both benefits individual health and reduces traffic congestion and energy consumption for transportation.

A well-designed mixed-use development consisting of more than one building also lends itself to "placemaking," the art of creating a real sense of place specific to a site or community.

Mixed use development was given a boost by the emergence of the broader concept of new urbanism.

New urbanism arose in the 1980s as a trend to revive the traditional neighborhood, which often included live-work units in which families lived above the store. While it may seem new-fangled, this was the historical pattern in cities. Industrialization halted this practice, as residents sought to separate their living quarters from smokestacks.

Often municipalities permitting mixed-use development have a special mixed-use zoning district (typically called MXD), or at least a zoning overlay district, which means an additional set of rules "overlaid" on a zoning classification.

Some simply apply an existing planned development, planned unit development (PUD), or planned community designation.

These developments may be said to be vertical, meaning that uses vary from one floor to another in a building. The example is the apartment above a storefront.

At other times, the mixture is horizontal, which might mean side-by-side storefront bays in the same building include two different uses, such as office and retail. It might mean a complex of buildings in which each building may include only one use. For example, a typical block of condo buildings might end with a small storefront. Or whole residential blocks might be interspersed with commercial or office development.

For the municipality, adding commercial to a residential development offers the prospect of elevated sales and property taxes.

Sometimes housing that is less desirable to the community (e.g., low-income housing or multi-family buildings) can be sited among commercial buildings with no outcry from the neighbors.

We shouldn't have to say this, but if you're approving a mixed-use development to attempt to create a compact development pattern, reduce traffic and congestion, and all those good things, then of course it needs great sidewalks or even better, a multi-use path system.

Make the paths and promenades as convenient and comfortable as possible, and if that means diagonal paths, that's fine. Connect with adjoining properties also, when possible, for a truly walkable community and a bikeable environment as well.

After all, one of the big advantages of mixed use development should be evident right away to traffic engineers. What they call "internal capture," or trips from Point A to Point B all within the development, is higher for mixed use development. This leads to fewer demands from local government for traffic mitigation (such as constructing new road lanes or contributing financially to such capital improvements).

If you're in the local government and you're using this technique primarily as a sprawl antidote, understand that problem thoroughly and how your development can address multiple issues. Explore that section of this website at length. A book we like is Smart Growth in a Changing World.

The advantage of vertical mixing to the community is that it allows greater intensity of land use in desirable locations, such as near downtowns, activity centers, transit stations, universities, or major employers.

In most locations other than the regional shopping mall, two or three stories of retail won't be successful, but one story of shopping with several floors or condos or apartments above may be highly desirable in the right neighborhood.

Live/work units are common in mixed-use developments. The term is applied to buildings with commercial occupancy on the ground floor and usually a single residential unit above.

In some locations they are allowed to be rented out separately, but this arrangement often leads to difficulties with stairways, privacy, soundproofing, firewalls, and ventilation. Try to make sure there is a market for owner-occupied live/work units in your area before you approve the plan.

Usually some land uses are prohibited in a mixed-use zoning district, so "mixed-use" doesn't mean "any use." Typically prohibited are drive-through restaurants, service stations, dry cleaners, and other businesses that tend to be automobile-intensive or chemical-intensive.

Many ordinances use the commercial setback requirements for all buildings within the mixed-use development.

However, our advice is to require all mixed-use development to submit to a criterion-based  site plan review, similar to that used to evaluate planned developments. Sometimes using the commercial setback won't make sense for all parts of a development.

Mixed-use also can assist in meeting environmental sustainability goals. Don't skimp on landscaping. If the tract is large, a mixed-use development of course should contain some open space and natural amenities. Retaining all your stormwater on site, required many places, will give you a good start on a potentially attractive open space.

Barriers to Mixed-Use Development

In many communities in the U.S. mixed-use developments were literally illegal until recently. And I daresay some towns haven't changed their zoning ordinance yet. (Our European readers think that's crazy. We know because they contact us.)

A traditional zoning ordinance lays out land uses that are permitted on each parcel of land, not allowing for both residential and commercial in one building.

The trend is definitely toward correcting that problem, but many cities have taken months to deliberate about how to approach mixed use development.

Usually as an interim solution, a municipality in that situation has reverted to whatever type of planned unit development, or planned community zoning the municipality had on the books. (Yes, a few haven't deviated from traditional zoning enough to have a planned unit development provision in the zoning ordinance.)

Administering the parking requirements is a related problem. Shared parking is quite appropriate in a mixed-use situation, but often municipalities have not provided for shared parking or offer an appropriate calculation mechanism.

Sometimes the interpretation of the building code also becomes a problem in mixed-use buildings.

For example, commercial buildings require sprinkler systems, but must that extend to the residential area as well? For municipalities that adopt standard and current codes, those bases are covered, but others may have to grapple with such issues.

Mixed-use developers also must anticipate a greater level of discretionary scrutiny than they would undergo if they built within the provisions of a traditional multi-family or single-family zoning district.

This makes it difficult for developers to assert that their development rights have "vested," which is an important legal or financial concept in some states. (A vested right is a reasonable expectation that a developer will be able to follow his or her plans.)

A mixed-use zoning district, which may have very complex regulations, actually is preferable public policy to a highly discretionary review process under a planned unit development (PUD) or special use permit process.

Similarly, early in the renewed popularity of the concept in America, the financial industry didn't know how to lend for these developments.

Mixed-use development does not meet the lending community's standard list of product types. Lenders fear that one or another of the mixed uses will become obsolete or will suffer from insufficient market demand. Because of this lender reluctance, mixed-use development may require a public-private partnership, with public sector financial participation or guarantees.

This problem is really easing in the last few years as the service industries to real estate development learn more about mixed use development.

Another problem for mixed-use development is that mistakes certainly are possible, and somewhat more likely than when land uses are segregated.  For example, I toured a project in which an architectural firm was the culprit. They didn't plan sufficient depth for the storefronts on the first floor, so they were never very attractive to retail tenants. And residents didn't want to live on the first floor adjacent to the sidewalk, so the end result was a vacant ground floor, which discouraged both residential and retail tenants.

Appropriate Locations for Mixed-Use Development

Consider mixed-used development especially when you are faced with a large parcel of land that becomes vacant. This might be a former manufacturing plant, closed shopping center, shuttered military facility or college, or other large parcel that somehow needs to be revitalized.

Candidate locations for a successful mixed use include entire block faces where commercial or office uses would be viable, prominent corner locations where a parcel large enough for at least one floor of commercial development is available, and areas near the large activity generators mentioned above.

No matter how much you love mixed-use development, and I've become quite a fan, don't start applying it willy-nilly to any vacant lot where a property owner smells a higher valuation if the zoning is called mixed-use.

Just because you assign a mixed-use zoning classification, or an overlay zoning district permitting mixed-use development, don't go crazy about modifying height and lot coverage requirements.

Don't show me a four-story mixed-use building in the middle of a block of nice story-and-a-half homes and be all proud of yourself because you're up to date with mixed-use.

Encouraging Mixed-Use Development

Municipalities that want to promote mixed-use development need to be proactive and address zoning, parking, land use planning, and planned unit development provisions before a developer is knocking on your door. Better decisions are likely when a particular development proposal is not literally awaiting your action.

If you really want mixed-use development, develop charts, diagrams, computer sketches, or renderings to illustrate your intent. This could be one set of drawings and diagrams for all mixed-use projects in the community, but more likely, you will have a set of illustrations for each prospective large MXD project.

Then invite residential and commercial developers to meet and mingle, because in some communities, those are two different camps who aren't well acquainted with one another. While you're having a mixer, also invite some bankers who understand the concept or who have been intending to educate.

Make sure any design standards or guidelines that you want enforced in your community are in place.

Require some variety of building heights and mass in a multi-structure mixed-use development. Four identical four-story buildings won't seem appealing in most cases.

Facades of buildings used commercially on the first floor need higher ceilings on the first floor, and also a high degree of articulation (recesses, protrusions, large windows, and design features) to define it as a commercial space.

Any absences or loopholes in your design review process will be exploited by an unscrupulous or just less than artful developer. And if you're in a community with no formal design review, you might want to consider enacting a process requiring at least some level of design scrutiny before entertaining proposals for mixed-use developments.

We can't mention often enough the value of taking your decision makers on a field trip to a neighboring community where a sample of a working building or development can be toured.

If you have a large site you are marketing, consider its distinctive properties. For instance, if it is near a university, you may want to emphasize research facilities, artist space, and student housing along with a more typical mix of residential, office, neighborhood retail, and a couple of restaurants.

Be sure to play up any transit access available at your site. If you're near a transit station, you may want to house a park-and-ride lot during the day if you feel you can build restaurants and attractive night life at the transit station to retain people in your neighborhood after hours.

You also may find it necessary to offer economic development incentive tools, subsidies for affordable housing, or incentive zoning granting density bonuses or increases in floor area ratio, to developers who provide certain amenities.

In this case, keeping housing at a certain affordability level could make the development eligible for a greater density than would otherwise be allowed.

Why Are Development Incentives Needed?

You might ask why consider any incentives if mixed-use development is so desirable. Market acceptance of mixed-use residential units generally has been positive, as long as automobiles are accommodated in some fashion.

The buyers or renters attracted to such developments appreciate the more or less classic architecture, the convenience of living close to some shopping, and the interesting and challenging joys of living in a community where neighbor interaction is nearly inevitable.

However, developers avoid what they see as the risk in trying new types of projects, and they may need a nudge in the right direction.

A second answer is that mixed-use is usually more complex administratively to prepare for approval, and lenders may graciously pile on another layer of red tape if a developer wants to do something slightly less conventional.

So neighborhood or community organizations, you might have to assist if you really want to have great development.

But mixed-use is attractive to the market, it reduces your long-term street maintenance costs because you accommodate more people and fewer trips in less space, and it probably increases your property value over what otherwise might occur.

If you feel your community is desirable enough that you shouldn't have to offer incentives, first try education and lots of it. If one or two developers aren't receptive, keep looking and talking to prospects. Eventually you'll find one who's interested in applying the concept to your situation.

Related Land Development Concepts

Mixed-use may be related to new urbanism or transit-oriented development (TOD) in some people's minds. It's very appropriate to the newer idea of COD (cargo-oriented development), which applies to a number of cities around the country where freight terminals are grouped in a district.

New urbanism certainly supports a mixed-use concept, but there are other mixed-use buildings and developments that don't embrace the entire theory of new urbanism. And a transit-oriented development could be all commercial or all residential, although many current examples are indeed mixed-use.

The smart growth movement  also is fond of mixed-use development, because it lends itself to compact urban form, but in theory, a mixed-use development could thrive as a leapfrog development a considerable distance from the city center.

For More Considerations on Related Topics See These Pages

  1. Community Development
  2.  >
  3. Zoning
  4.  >
  5. Mixed-Use Development

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