“The Big Money Show” panel analyzes a trend in mortgage rates that could hit homebuyers hard.
Traditional shopping centers, once bustling centers of commerce, are now being converted into mixed-use communities that include residential properties, adding much-needed housing supply to the market.
The move is far from solving the housing affordability crisis — a challenge that will require multiple systemic changes — but some industry experts say it still helps address the housing shortage, especially in states where the problem is more severe, such as New Jersey and Florida, according to a recent report from Realtor.com.
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Jones said these properties leverage existing infrastructure to bring well-located homes to market more quickly, avoiding many of the delays associated with new land development.
Still, there are significant hurdles to converting commercial real estate to residential use, especially when it comes to local zoning regulations and construction costs.
An apartment complex in Hempstead, New York, on September 24, 2025. (Conrad Williams Jr./Newsday RM via Getty Images) / Getty Images)
Redfin chief economist Daryl Fairweather said local governments control zoning laws and determine whether land is used for commercial or residential purposes. Converting commercial areas to mixed-use developments requires changes to these zoning laws, but such efforts are often met with resistance from residents, according to Fairweather. For example, she noted that some people fear that more housing, especially affordable housing, could increase traffic or attract unwanted tenants.
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The problem is compounded because many mall structures are also not designed for residential use, making conversions expensive, according to Jones. In addition, high labor and material costs often make complete demolition and rebuilding more practical. These additional costs could ultimately lead to higher home prices, reducing the potential affordability benefits, Jones said.
“Mall-to-residential conversions are a creative way to use existing infrastructure to increase supply in tight housing markets, but the cost and design challenges mean they are not a panacea for affordability,” Jones said.
This step is far from solving the affordability crisis, but it will help address the housing shortage. (George Rizer/The Boston Globe via Getty Images/Getty Images)
Still, Jones noted that while this trend is growing, it is only concentrated in certain areas.
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As more projects progress, the physical and social landscape of American malls is beginning to change.
Prominent Properties Charlie Oppler, CEO of Sotheby’s International Realty, said the shopping centers that many frequented in the 1980s through the 2000s are being replaced by potential housing sites, dining and cinema destinations, or mixed-use developments with luxury retail next to residential spaces.
Vacant shopping center in Woodbridge. Virginia. (Robert Knopes/UCG/Universal Images Group via Getty Images) / Getty Images)
Riverside Square in Hackensack, New Jersey, which sold a plot of land for an apartment complex and now has more than 15 restaurants and some of the most upscale retail in the country, is an example of this trend, according to Oppler.
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“The housing component in many locations is using the parking lots or excess land to create more housing, whether it’s rental or owner-occupied,” Oppler said.
Oppler predicts that over the next 20 to 30 years, many older shopping centers will be demolished as vacancy rates increase and, depending on location, will be replaced with transit hubs and housing.
