Failing Shopping Malls Can Be a Powerful Tool for Addressing California’s Affordable Housing Shortage

Declining sales and anchor store bankruptcies have led to a nationwide trend of shopping malls failing. This trend has accelerated during the COVID-19 pandemic, and market analysts estimate that several hundred malls are at risk of failing in the next five years. As malls close, the sites present tremendous redevelopment opportunities. While redevelopment plans may include new retail or other commercial options, housing is desperately needed in California—the state has an estimated shortage of 2.5– 3.5 million units—and former mall sites may offer a natural solution to the state’s housing woes. Redevelopment planning has already begun for some sites. Researchers at the University of Southern California looked at case studies of ten distressed malls in California’s metropolitan areas to assess their potential for mixed-use development, including housing. The case studies included malls with and without current redevelopment plans, and illustrate issues that could hinder or facilitate such redevelopments. The researchers also developed sustainability criteria by which to measure the benefits and costs of redevelopment. This policy brief summarizes the findings from that research and provides policy implications.