Dying malls can solve America’s housing crisis
- The U.S. faces a severe housing shortage with a significant number of empty retail spaces.
- With changing shopping habits and falling sales, many malls are closing or becoming vacant.
- Repurposing malls into residential units is a potential solution to both the housing crisis and revitalization of communities.
In the United States, an ongoing housing crisis has led to reconsideration of vacant retail spaces to fill the growing demand for housing. As of 2024, nearly 34 million square feet of retail space was reported empty, largely due to a shift in consumer behavior towards online shopping, which accelerated during the pandemic. With around 1,200 malls across the country, many are witnessing closures or struggling significantly; an 8.7 percent vacancy rate was noted by Capital One at the end of the previous year. As traditional shopping habits evolve and major retailers like Sears and JCPenney shut down, these vacant malls could be repurposed into residential units. Jessica Lautz, deputy chief economist at the National Association of Realtors, emphasizes that these transformations can speed up the availability of homes while revitalizing communities suffering from dead retail spaces. Developers have considered this transition not just beneficial for addressing housing needs but also as a chance to breathe new life into declining urban areas by mixing residential and retail spaces. However, the change isn't seamless, faced with various challenges including zoning laws and financing hurdles that deter homebuilders from undertaking new projects. President Donald Trump recently noted that substantial empty land is available for development, with millions of lots sitting unused. Yet, many builders remain hesitant to jumpstart construction amid uncertainty stirred by market conditions, including tariff impacts and rising borrowing costs.