Is mixed-use development the future of real estate?
It’s become increasingly apparent that as populations grow and a new generation of home buyers enter the market, that the preferred homes of previous years are giving way to condos. And with younger homeowners looking for specific amenities, accessibility, and services, it looks as though mixed-use developments may be the real estate of the future.
Sales of single family homes in the USA dropped overall in 2019, despite a predicted rise — and despite lower mortgage rates. In several major cities, including Los Angeles and Las Vegas, typically cosmopolitan downtown areas are beginning to see a shift as developers start to incorporate more residential units into their high rise developments.
In Las Vegas, where land is no question in the sprawling Nevada desert, and single-family homes have historically been the norm, we are starting to see a surge in multifamily housing.
Luxury is the name of the game in flashy, trendy Vegas. Major developers Tollbrothers, Lennar, and DR Horton, are creating luxury multifamily condominiums that cater to high-end buyers who value amenities and services over simple square footage. This isn’t to say that these multifamily units are small — some go above 3000 square ft — but that the draw of easily accessible, private-but-serviced clubhouses, fitness centers, pools, parks, and services are overshadowing the desirability of mere ownership.
In places where space is not as plentiful, downtown urban cores, with its plethora of shops, restaurants, and entertainment, occupy a similar space of proximity to convenience. In downtown LA, for example, the late 90s and early 2000s saw an influx of mixed-use residential high-rises: a trend that has picked up again in the present day. LA Live, developed in tandem by several conglomerates, was one of the first, with over 7000 residential units, in addition to hotels, restaurants, and entertainment.
Even in the suburbs, home owners are looking towards areas with accessible public transit, parks and green spaces, and proximity to childcare services and entertainment. It seems that, increasingly, space is not the issue — the deciding factor is convenience.
Logically, it makes sense that mixed-use developments are increasingly popular. By incorporating housing units into areas of typical work and play, urban cores of major cities are changing. Historically, cities like LA were dead zones in the evening: once people got off work, they tended to return to their homes in the suburbs. With the injection of more housing into the downtown core, the city can become more of a residential district. Existing commercial and retail space provide those same homeowners with opportunities for entertainment and community, mere blocks from their door.
With the growth of multi-use developments and communities where people can work, play, and live, developers and urban planners have the opportunity to revitalize a city into communities that thrive after 5pm, without sacrificing the services, amenities, and options that make city centers so appealing.
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