Mixed-use development can be defined as any urban real estate development that balances a mix of various asset classes i.e. residential, commercial, cultural, and retail to achieve synergy, where these asset classes are physically and functionally integrated.
Many urban designers have been criticizing mixed-use developments terming them anti-urban as it creates a self-contained little world.
But the truth is, throughout human history, the majority of human settlements developed as mixed-use. The idea of segregated developments started with industrialization, the mixed-used development declined during this period in favor of the large-scale separation of manufacturing and residences in single-function buildings.
We will not go further brooding if MUD is anti-urban or not. We will focus on the reasons why a developer should go for it.
- Risk Reduction: Mixed-use developments are less risky; for the developer, the risk is spread across several asset classes. Even if an asset class is not performing well in certain market conditions, other classes can perform well. MUD provides a good diversification opportunity for the developer.
- Synergy: Various asset classes work in synergy with each other in a mixed-use development. Office workers want restaurants to eat, hotels to host business travelers, and retail to shop. In fact, MUD also reduces vacancy risk; one asset class act as a feeder to another asset class.
- Good Urbanism: Mixed-use developments provide stronger neighborhood character and a sense of place.
- Lower Carbon Footprint: Mixed-use development also reduces the overall carbon footprint. Reduced distances between housing, workplaces, retail, businesses, and other amenities and destinations make it walkable or bikeable neighborhoods. It also reduces traffic congestion and energy consumption for transportation.
- Lower Parking Requirement: Mixed-use development can lower overall parking requirements if planned properly. Some parking spaces can be shared among various uses.
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