Looking to Vacant Retail Spaces for Needed Housing Supply

The Phoenix City Council has taken the first steps toward zoning reforms that can balance out the oversupply of retail spaces at one end of the market and the lack of housing units at the other.

November 8, 2021, 12:00 PM PST

By James Brasuell @CasualBrasuell

A vacant department store in Coolidge, Arizona.

An abandoned department store in Coolidge, Arizona. | Chris Curtis / Shutterstock

Jessica Boehm reports that Phoenix city officials are attempting to kill two land use birds with one stone by making it easier to covert vacant storefronts into housing.

"Phoenix has a lot of retail space — an average of 40.5 square feet of retail per capita, compared to 28 square feet nationwide," writes Boehm for context on the retail context. Like many cities, retail struggled in the years leading up to the pandemic, and major retailers like Sears and Toys "R" Us have vacated their physical stores. The pandemic added additional disruption.

On the flip side is the city's housing market, which, according to a recent study [paywall], is short 163,067 units. While the article allows some debate about whether there is an unhealthy amount of retail vacancies in the city, the housing supply shortage is never questioned.

As explained by Boehm, the effort was still in the brainstorming stages at an October council meeting, and the idea of providing incentives to convert retail spaces onto residential units is only one of numerous ideas currently on the table. According to Boehm, other ideas for easing pain at both ends of the real estate market include increasing the height and density for residential development, allowing some uses requiring special permits (e.g.,  tattoo shops, massage therapy, and self storage facilities, as well as microbreweries, distilleries, and data centers) to operate in commercial zones, and reducing minimum parking requirements.

The source article also details some of the redevelopment projects already converting underutilized commercial parcels in the city—even without zoning changes.    

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