For decades, the ideal community for homebuyers was a suburban “bedroom community” where residents enjoyed their leisure time in their homes and drove to work, errands and entertainment. Times have changed.
A recent survey by RCLCO, a real estate advisory services firm, found that half of buyers want to live in a mixed-use environment rather than a purely residential community, says Gregg Logan, a leading member of the Urban Land Institute and managing director of RCLCO.
“Thirty percent said they want to be in a suburban community with shops, restaurants, offices and houses, and another 20 percent said they want to buy in an urban environment with a similar mix,” says Logan. “The number one benefit is convenience, which is the ultimate amenity for many buyers today.”
Anecdotally, in Anne Arundel County, Maryland, single-family homes on small lots in a mixed-use development sell faster than homes on half-acre, says Karen McJunkin, a regional partner and vice president of Elm Street Development.
“There’s been a sea change over the past decade among all age groups in where they want to live,” says McJunkin.
Why mixed-use developments attract buyers
Walkability and convenience are the prime drivers of buyer interest in mixed-use developments, says Sean Clancy, vice president of sales and marketing for PulteGroup.
“Location, location, location is still important to buyers and the location they want is within walking distance of shops, restaurants and other amenities,” he says.
In addition, mixed-use developments appeal to people for social aspects because it’s easy to be with other people at the dog park and on the walking trails as well as at the local coffee shop, says McJunkin.
At Foundry, a mixed-use development adjacent to the Avalon planned community in Alpharetta outside Atlanta, Clancy says buyers are looking for an “urban-ish” feel where they can stay active.
While the expectation for mixed-used communities is that residents can walk to shops and restaurants, entertainment venues are also becoming more common, says Logan.
“There’s a recognizable interest in art and culture, so for example at the Waterside Place Town Center at Lakewood Ranch in Sarasota, Florida, residences are interspersed with shops, restaurants and a live theater venue,” says Logan.
At a community under development in Maryland, McJunkin says an open space is designated for food trucks and a bocce court. At Pike and Rose, a mixed-use development in North Bethesda, Maryland, a concert venue, a high-end movie theater with cocktails and food, and an upscale bowling alley are part of the community.
The downside to mixed-use developments
While 50 percent of buyers want to live in a community that includes shops and restaurants, there are some compromises to be made. Some of the issues that residents in cities or in suburban town center developments contend with include noise and traffic from people working in the community and visiting shops and restaurants. In addition, they may feel a lack of privacy.
“Mixed-use communities need to be designed to mitigate issues such as noise and traffic,” says McJunkin. “It’s natural to place the retail component on the fringes of the community because it needs to be visible to nonresidents. We also design tree buffers and sometimes place one building in a more crowded area at a lower price point.”
Typically, communities design separate parking and sometimes separate entrances for residents, says Clancy.
“You don’t want residents to have to fight for parking when they come home and you also don’t want them to lose their sense of identity as residents or their sense of excitement about where they live,” says Clancy.
Not everything in a mixed-use community should be communal, says Clancy.
“Residents need some designated amenities such as a roof deck or a private park limited to residents only,” he says.
What to look for in a mixed-use community
When visiting mixed-used communities, McJunkin suggests noticing whether the pedestrian connections and the amenities are well-designed and looking for a mix of unit types which can keep a community vibrant with different age groups and household configurations.
“It’s important to have the residential and nonresidential areas separate but interconnected,” says McJunkin. “Amenities should be spread around the community to make it easier for everyone to enjoy them, too.”
The type of retail in a community matters, says Clancy.
“If something changes in the retail mix it could impact the appeal for you and for other buyers,” says Clancy. “For example, you need to marry high-end retailers with high-end housing so the demographics for both the housing and the retail components are in harmony.”
In addition, Clancy says homebuyers today pay attention to the natural environment.
“People want lighted and landscaped green space where they can just get outside and relax, plus they need paths and mews that connect everyone to green spaces and to the retail sites,” says Clancy.
Developers think about how residents will interact with other people coming into their community, says Logan.
“At the same time, residents need to recognize that the presence of those outsiders supports all the restaurants and shops that are part of their community,” he says.
Logan suggests that buyers in mixed-use developments can feel secure about their future property values.
“Over time, these developments will be the place where people want to be,” Logan says. “After the recession, property values recovered faster in mixed-use developments than in traditional residential communities because there is more demand than supply. That’s likely to continue, too, because the two largest buyer groups – millennials and baby boomers – also happen to be the most attracted to walkable communities.”
Mixed-use communities include suburban town centers as well as high-rise developments in the city and nearby suburbs. Either way, these communities share two of the most sought-after amenities by today’s buyers: convenience and walkability.