From Renee Rutledge on February 04, 2009 in Locations
Age-old wisdom states that when times get hard we pool our resources. That idea seems to be the catalyst behind a recent trend toward mixed use developments (MUDs) in commercial real estate. With fuel and energy costs remaining high for much of the last few years, more people are moving in closer to retail districts. And when people are hurting for cash, they spend less money, a problem consumer based industries are facing right now.
That’s why mixed use developments are advantageous to businesses. MUDs combine commercial and residential real estate to bring consumers and businesses together, essentially pooling their resources. Studies have shown that MUDs save money all around.
According to an article from TriplePundit, municipalities save money on infrastructure costs due to construction in areas that already have water and sewer services in addition to increasing their tax base. Developers can cut costs by 20 percent and the overall efficiency of the land, when compared to conventional development, is increased by up to 30 percent.
Cities also benefit by keeping consumer spending in their districts.
Consumers are much more willing to spend when they can simply take the elevator or walk across a courtyard to the store or movie theater. Therefore, businesses located within MUDs are more likely to succeed than those that are spread out over a large area.
Mixed use developments literally circulate money, meaning that money earned is money locally spent. What consumers—including employees and suppliers—save on fuel costs is funneled back into the local economy. Therefore, as the studies suggest, everyone benefits, including the city, which is able to create and maintain new jobs and tax revenue, opening up funding for other projects.
Mixed use developments may become a powerful tool during the economic recession as cities, businesses, and taxpayers turn inward, pooling their resources in order to turn the economic tide.