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<\/p>\nA growing number of Americans could soon be living in shopping malls, as builders look to reinvent dying retail spaces to fix the nation\u2019s housing shortage.<\/p>\n
The math is simple: there are not enough homes for sale in the U.S. market compared to the number of Americans who need one\u2014assuming they could afford it\u2014while there are hundreds of \u201cghost\u201d and \u201czombie\u201d malls scattered across the nation, which have shut down or are facing closure due to falling sales and dwindling visits.\u00a0<\/p>\n
As of 2024, there were an estimated to be nearly 34 million square feet of empty retail space across the country. Meanwhile, the U.S. had an estimated housing supply deficit of 3.8 million homes, according to Realtor.com.\u00a0<\/p>\n
\u201cThe U.S. is in need of residential units. Vacant properties such as residential shopping centers and malls can provide a large structure to bring in much needed units,\u201d Jessica Lautz told Newsweek. Lautz is the deputy chief economist and vice president of research at the National Association of Realtors.<\/p>\n
The Case for Mall-to-Apartments Conversions<\/p>\n
The idea to turn vacant or struggling shopping malls into housing is not new, but it has picked up speed since the pandemic, when the U.S. experienced a surge in online shopping which led to store closures across the country.\u00a0<\/p>\n
An average of 1,170 shopping malls closed across the country every year between 2017 and 2022, according to a report released by Capital One earlier this year. While many Americans still enjoy in-person shopping and foot traffic to malls has improved since the pandemic, many are still having a hard time keeping their doors open.\u00a0<\/p>\n
Last year, 9,260 mall stores closed while 6,880 new ones opened for a net loss of 2,380 outlets. There are currently around 1,200 malls across the country, according to Capital One. By 2028, there might be as few as 900. They were also more likely to be vacant than any other retail space, according to Capital One, reporting an 8.7 percent vacancy rate at the end of last year.<\/p>\n
This phenomenon has gone hand-in-hand with declines in retail sales for department stores across the country since 2001, according to U.S. Census Bureau data cited by CNBC.<\/p>\n
<\/p>\n
\u201cThe rise of ghost and zombie malls represents a perfect storm of overbuilding, shifting consumer behavior, and strategic missteps that reshaped the American retail landscape,\u201d Ray Wimer, a professor of retail practice at Syracuse University, told Newsweek.<\/p>\n
\u201cFirst and foremost, we simply built too much. From the 1960s through the early 2000s, developers constructed malls at a breakneck pace, far exceeding sustainable demand. By 2005, the U.S. had roughly five times more retail space per capita than any other nation; about 24 square feet per person compared to 2\u20133 in most of Europe,\u201d he said.\u00a0<\/p>\n
\u201cNot only did we overbuild, but we expanded existing malls beyond what their markets could support. Then came e-commerce,\u201d he added.\u00a0<\/p>\n
\u201cOnline retail didn\u2019t just nibble at mall traffic; it redefined shopping itself. Why drive to a struggling mall when you can browse an infinite inventory from home? The pandemic only accelerated this behavioral shift, propelling online penetration forward by years in a matter of months.\u201d<\/p>\n
Department store closures compounded the damage, Wimer said.\u00a0<\/p>\n
\u201cWhen anchors such as Sears, JCPenney, or Macy\u2019s shuttered locations, they left gaping voids, both physical and contractual. Co-tenancy clauses often allowed smaller retailers to terminate leases or demand rent reductions, creating a domino effect. Once two anchors depart, the property can quickly tip into decline.\u201d<\/p>\n
Finally, he said, cultural and demographic forces sealed the trend. \u201cYounger consumers value experiences over possessions, walkable urban spaces over car-centric suburbs, and convenience over tradition,\u201d Wimer said. \u201cThe enclosed suburban mall, once the epitome of modern retail, no longer fits the rhythm of contemporary life.\u201d<\/p>\n
As anchor stores like Sears, JCPenney, and Macy\u2019s shut down, aging malls unable to keep up with the rise of e-commerce and Americans\u2019 new shopping habits, they are leaving behind sprawling buildings that run the risk of becoming relics of a bygone era\u2014unless these structures are transformed into something else; something that can inject new life in the community around them.<\/p>\n
Builders are increasingly looking at these spaces to be transformed into mixed-use buildings, merging commercial and residential. As of January 2024, at least 192 shopping malls across the country were planning on converting space into apartments, according to real estate consulting firm Realogic.<\/p>\n
\u201cShopping malls often occupy prime real estate locations, near transit and within developed areas.\u00a0These locations are great places to build urban villages,\u201d Robert Dietz, chief economist at the National Association of Home Builders, told Newsweek.<\/p>\n
\u201cTransforming former malls into multifamily housing makes a lot of sense, especially in suburban areas that already have strong demand, good schools, and established infrastructure,\u201d Jake Krimmel, senior economist at Realtor.com, told Newsweek.<\/p>\n
\u201cThese sites are often well-connected in local communities\u2014for example, on or near major roads and highways. This means they can be reimagined as full mixed-use neighborhoods. Beyond housing, they could be places with restaurants, parks, and personal services that create a real sense of community in what used to be a soulless parking lot,\u201d he added. <\/p>\n
\u201cIt\u2019s also a chance to modernize the outdated aesthetics and land uses of the 1990s big-box era, replacing empty retail corridors with vibrant, livable spaces. Compared with office-to-residential conversions, mall projects can be logistically simpler as well.\u201d<\/p>\n
The Perks of Living in a Mall<\/p>\n
Adding housing options to shopping malls would offer an immediate\u2014if partial\u2014fix to the shortage in the country, experts say.\u00a0<\/p>\n
\u201cUtilizing existing infrastructure can bring homes to the market quickly, avoiding some of the delays associated with redevelopment or greenfield housing development,\u201d Hannah Jones, senior economic research analyst at Realtor.com, said in a recent report. \u201cThe shift from retail to residential is a logical solution in a country facing a persistent housing shortage.\u201d<\/p>\n
\u201cRepurposing malls into housing won\u2019t solve the nation\u2019s supply crisis, but it\u2019s definitely a step in the right direction. In general, there\u2019s no one silver bullet that could solve such a massive problem, but every step will chip away at the housing shortage. Seeing retail conversions succeed will help shift our mindset too,\u201d Krimmel said. <\/p>\n
\u201cInstead of viewing empty space as blight, we can imagine it as an opportunity to create more modern, livable communities with much-needed housing.\u201d<\/p>\n
But the transformation could also be a solution to the issue of dying shopping malls across the country.<\/p>\n
Realogic called it a \u201cbest of both worlds scenario\u201d: when only parts of a struggling shopping mall are transformed into housing and part is kept as retail space, new residents can breathe new life into surviving and new shops catering to their needs.<\/p>\n
Not only can new homeowners or tenants bring back traffic to existing restaurants and stores, but they can also have the effect of attracting a different kind of retailer, like grocery stores, pharmacies, and health care clinics, in what Realogic calls a \u201cwin-win\u201d for mall owners.\u00a0<\/p>\n
\u201cBeing located so close to essential services increases the apartments\u2019 appeal; being located so near hundreds of apartment dwellers who need their products and services increases the mall\u2019s appeal to prospective retail tenants,\u201d the company wrote in a recent report.<\/p>\n
Malls offer the opportunity for developers to create the kind of community-oriented spaces that many American buyers\u2014especially among the younger generations\u2014seem to favor nowadays.\u00a0Some 78 percent of newly built homes for sale in the nation are located in community associations, David Diestel, CEO of FirstService Residential, a company which works with thousands of homeowners across North America, told Newsweek.<\/p>\n
\u201cHistorically, home has been four walls; today the shift is about the communities,\u201d he said. \u201cOne in three people in the U.S. already live in what we call community associations, residential spaces with shared amenities\u2014such as a swimming pool, a gym\u2014which allows people to connect with their neighbors, sharing lifestyles,\u201d he said. \u201cWhat we see more than anything else is a shift towards community living, also as a way of managing affordability\u201d<\/p>\n
Not a Smooth Transition<\/p>\n
But repurposing a shopping mall for housing is not always easy.\u00a0<\/p>\n
\u201cAs with all conversions, it requires creativity to revision the space and this can come with a significant cost,\u201d Lautz said. \u201cBuilding repurposing can be one of the solutions to add much-needed housing supply. However, each community is unique in the vacant buildings they have. Some communities have vacant malls, others may have hotels or motels, and other vacant schools,\u201d she added.<\/p>\n
The shape and layout of shopping mall buildings is often an obstacle for said transformation, lacking enough ventilation or natural light for apartments, making only part of the structure\u2014often the external one\u2014suitable for the conversion.<\/p>\n
Other issues are that construction costs are high and rezoning can be a lengthy, complicated, and costly process to navigate for developers and owners. Often, demolishing a former shopping mall can be easier for builders who might then decide to build luxury housing that does not address the current affordability crisis.<\/p>\n
There is also another issue, Krimmel said. \u201cThe biggest question is whether these areas are truly in-demand when it comes to housing,\u201d he said. <\/p>\n
\u201cEven if the physical conversion is more straightforward than turning an office tower into apartments, the financials have to add up for developers. If redevelopments won\u2019t pencil, ghost malls will sit empty. Ironically, office to apartment conversions have the opposite problem: they tend to sit in high-demand urban areas where housing is needed most, but where zoning, building codes, and design constraints make conversions far more complicated,\u201d he added.<\/p>\n
\u201cRepurposing malls may be easier logistically and legally than office to residential, but you still need people who will want to live there.\u201d<\/p>\n
Update, 10\/8\/2025 3:30 a.m. ET: This article has been updated with comment from Jake Krimmel and Robert Dietz.<\/p>\n","protected":false},"excerpt":{"rendered":"A growing number of Americans could soon be living in shopping malls, as builders look to reinvent dying…\n","protected":false},"author":3,"featured_media":286156,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,147306,147304,79,77892,7065,8166,16226,147305,2107,67,132,68],"class_list":{"0":"post-286155","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-conversions","10":"tag-department-stores","11":"tag-economy","12":"tag-homebuilders","13":"tag-housing","14":"tag-housing-market","15":"tag-malls","16":"tag-retails","17":"tag-shopping","18":"tag-united-states","19":"tag-unitedstates","20":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115337806956280905","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/286155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=286155"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/286155\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/286156"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=286155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=286155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=286155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}