Pros & Cons: Mixed-Use Developments

Industry pros discuss the benefits and detriments of mixed-use developments

The following question was recently answered on Quora:

“Urban Planning: What are the benefits and detriments of mixed-use developments?”

Two industry pros share weigh in on the discussion below:

 

Don Johnson, urban planner and economist:

“Mixed-use development” is kind of a squishy term which sometimes means different things to different people. At base it just means a single real estate development that incorporates several different uses (retail, office, hotel, residential, etc.) But it implies that those uses are designed to work together and complement each other.

When it’s done well, mixed-use development offers great benefits:

  • For the developer, risk is spread around several different markets, so if the office market tanks while you’re under construction (for example), well, you can lease the retail and operate the hotel and hopefully hang on to the thing until office improves. It’s just diversification at the project level.
  • The different uses can work in synergy. Office workers want restaurants to eat lunch and entertain clients in, and hotels to host business travelers. Shoppers want to catch a movie. Condos and hotel rooms may be worth more if there are shopping and services right downstairs. From the developer’s point of view, since people are looking for these things, why not provide them and keep that revenue yourself?
  • At the city level, mixed-use developments can resolve a dilemma of modern urban real estate: good urbanism should be delivered at a fine grain that people can interact with at a human scale, but real estate financing demands large projects of hundreds of millions to billions of dollars. Mixed use development can be both.

There are also downsides:

  • On a practical level, mixed-use projects are more difficult. Financers have to evaluate each use separately, zoning and building approvals can get exponentially harder, and from a design perspective there are a lot more details you have to get right. The developer may have to simultaneously market office, hotel, retail and residential space in order to move forward. Projects take longer and that is the single most deadly thing for real estate (since the developer is usually paying somebody for land or money while the project is crawling forward.) Today, mixed-use projects are much more common than they were 20 or 30 years ago and the difficulty of completing them is also less.
  • From a larger perspective, the whole concept, and often the execution, of mixed-use developments can be anti-urban: the idea is to create a self-contained little world that people don’t have to leave. This adds nothing to the city and can be very destructive. For troubled downtowns you could often see a vicious cycle – because the neighborhood was dead and/or scary, developers built very self-contained projects, which further sucked life off the street. (Renaissance Center in Detroit might be the classic example.) Mixed-use developments are also a major building block of what some have called high-density sprawl, which features high density and tall buildings but few connections at street level, strong automobile orientation (i.e. everyone comes and leaves by car) and an overall lack of urbanity. “Edge Cities” in the US are often like this.

Mixed-use developments today are quite common, much more than they used to be, and cities are also more demanding that they be more open and less self-contained. Like many practices they are not good or bad in themselves, it’s all in how it’s done.

 

Daniel Nordh, architect:

There is nothing inherently good or bad about mixed-use developments and the term itself encompasses so many variables it is almost meaningless.

A development proposal ought to be responsive to its context providing the uses that make sense in that particular location based on existing offer, need, viability and urban fabric.

Most of the time, in an active urban context (i.e town centres, active routes etc.), mixed-use development should be the default as the ground floor provides a completely different interface with street activity than the upper floors. However, in a suburban, or rural context mixed-use most often makes little sense or is naturally limited to areas of denser interaction, neighbourhood centres etc.

The benefits of a sensible mono-use can easily outweigh the benefits of a poor mixed-use development and vice versa. Location and context will decide.

This is said from a UK/European urban design for public good point of view. Developers will normally come to a completely different conclusion of what a development ‘ought to be’ based on maximising returns.

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