Converting 10% of US strip malls into housing could create 700,000 new homes

Converting 10% of US strip malls into housing could create 700,000 new homes, per BI.

Simultaneously, various communities nationwide grapple with a housing affordability crisis, primarily fueled by a shortage of homes. To address both challenges, urban planners and developers are advocating for a solution: repurposing strip malls into residential spaces.

A recent report from the housing nonprofit Enterprise Community Partners suggests that converting just 10% of vacant strip malls suitable for redevelopment could yield over 700,000 homes. The estimate assumes a distribution of half lower-density multi-family housing and half medium-density multi-family buildings, reaching up to six stories.

Opportunities for repurposing brick-and-mortar retail spaces abound in cities and suburbs, according to Ahmad Abu-Khalaf, a senior research analyst at the housing organization. The report notes that there is approximately 947.5 million square feet of strip mall space across the United States, as reported by the International Council of Shopping Centers.

Abu-Khalaf emphasizes that many jurisdictions possess underutilized strip mall properties suitable for redevelopment into housing, including affordable housing or mixed-use developments that combine affordable housing with community-serving spaces.

While converting commercial buildings into homes is not a novel concept, strip mall conversions face unique challenges. Strip malls are often exclusively zoned for commercial purposes, necessitating potential zoning changes, local community support, and collaboration with existing tenants for successful conversion projects. Financing such projects can be intricate, requiring developers to secure funding from various government programs like the low-income housing tax credit and Community Development Block Grants.

Beyond addressing the housing shortage, strip mall redevelopments can offer additional benefits. They can breathe new life into existing businesses by attracting new customers, foster the development of walkable, mixed-use neighborhoods, and repurpose underutilized commercial spaces or parking lots into public parks, thereby contributing to economic development, urbanism, and enhanced accessibility.

Unlike the complexities associated with converting urban office buildings into residences, transforming strip malls into housing is often a less intricate process. The demolition of a single-story strip mall is generally simpler than rebuilding a downtown high-rise, and older strip malls may be more costly to maintain than to tear down and redevelop.

Success stories of turning malls into housing already exist in cities and suburbs nationwide. The report highlights examples such as the conversion of a gas station and strip mall into affordable housing in Santa Ana, California, and the transformation of a Sears department store into senior housing in Irondequoit, New York. Both projects benefited from state and local tax credits and subsidies.