Mixed-Use Comes to the 'Burbs

While the number of mixed-use developments is rising rapidly in city centers, the true wave of the future is in suburbia. Greenfield and higher density development in suburbia are providing developers with financially profitable and socially responsible opportunities, while benefiting communities.

What is at the root of this mixed-use growth in suburbia? How does transportation play a major role? And how will transportation continue to support the development of the future?

The majority of projects on the rise today integrate two uses at a minimum, and usually more. From the suburbs of Washington, D.C., to the fringes of Dallas, mixed-use developments are nestling into communities. For developers, these projects generate higher financial returns.

Mixed-use development offers several attractive benefits. Most obvious is the diversification of risk for owners, especially at a time when many commercial real estate sectors are experiencing soft fundamentals. The incorporation of multiple types of amenities into a single project is practical because people want the convenience of living, shopping and working, all within one common area.

Infrastructure Issues

Transportation issues are a major reason for the proliferation of suburban mixed-use projects. With commuting time on the rise and the number of cars growing daily, users are seeking options that enable them to complete errands, go to work and enjoy entertainment, without spending time behind the wheel.

Urban and suburban growth patterns indicate that suburbia remains the next frontier for dense development, given that the U.S. population is projected by the Census Bureau to rise by more than 60 million during the next 20 years. Of that growth, smaller, two-person households will become the majority. Smarter, greater density offers an effective solution to urban housing shortages. In short, 80% of the population will continue to live in the suburbs, so developers must focus on building density in the urban edges.

A vast controversy exists regarding whether or not mixed-use projects and transit-oriented approaches to land use and planning are an effective method of mitigating traffic congestion and reducing air pollution.

Traffic congestion is the No.1 quality-of-life complaint among Americans, and no one can argue that more clusters of dense development can reduce the number of trips needed in an automobile.

According to a study published in the journal Planning and Markets, so-called sprawl does not add to congestion, but in fact defies conventional wisdom about growth and travel patterns. The study found that population and employment in outlying counties of metropolitan areas has risen significantly. As a result, “suburbanization” is bringing jobs and workers closer, easing congestion, commuting times and lost worker productivity.

The marriage of transportation and growth planning has an impact on the bottom line, too. Nationwide, more than $100 billion is spent annually on the expansion and maintenance of ground transportation and infrastructure.

Winning Strategies

In an effort to spend transportation funds more wisely, states are acknowledging that people and companies want more transportation options — including walking, biking and mass transit — and that providing these choices can save money.

Envision Utah, a public-private partnership for quality growth, found that the state could save an estimated $4.5 billion in infrastructure costs by 2020 by employing smart-growth principles to compact, transit-friendly developments.

Another advantage of combining commercial, retail and residential areas is the financial benefit of reducing the amount of parking needed. Parking spaces in mixed-use buildings can often be shared between occupancies with differing schedules. And the use of more low-impact transportation modes — including biking and walking — reduces the automobile traffic and the financial and environmental impact of parking surfaces and garages.

The Legislative Advantage

Developers have said that as much as 80% of projects that are planned are never built due to the quandaries and obstacles that developers face from zoning commissions, city planning boards and Not In My Backyard (NIMBY) activists.

Like other developments, mixed-use projects encounter obstacles of political and regulatory approval. But weighed against other developments, mixed-use makes more efficient use of land and is fiscally and environmentally responsible.

Legislation that promotes mixed-used development and transportation incentives has been implemented in several states, including Georgia, Maryland, New Jersey, Oregon and Wisconsin.

The key to a successful mixed-use project is the ability to maximize and merge the uses in a way that can react easily to opportunities, economics and market conditions. NAIOP supports suburban mixed-use development and the benefits it brings to transportation crises, employment and quality-of-life issues.

Thomas J. Bisacquino is the president of the National Association of Industrial and Office Properties. For more information, visit www.naiop.org.

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