The Death of the American Shopping Mall Helps Tackle the Housing Crisis

As traditional shopping malls across America struggle to stay relevant in the age of e-commerce, a surprising trend is taking root: transforming once-bustling retail hubs into vibrant mixed-use communities that bring much-needed housing to strained real estate markets.

From New Jersey to Florida—and even in Colorado’s North Denver Metro—the death of the American mall may be breathing new life into both real estate development and housing access.

Anchor stores like Sears, JCPenney, and Macy’s are closing their doors in aging malls, leaving behind large, underutilized footprints in suburban communities. But rather than letting these spaces become forgotten relics, developers are seizing the opportunity to reimagine the role of malls in modern life by turning them into places where people not only shop, but live.

In Paramus, NJ, alone, multifamily housing is going up next to three different shopping malls—each along major commuter routes and accessible to highways and schools. The city is located about 17 miles outside of New York City.

The suburban city attracts not only locals but visitors wiling to travel to save money on the no sales tax on clothing policy.

“Utilizing existing infrastructure can bring homes to the market quickly, avoiding some of the delays associated with redevelopment or greenfield housing development,” says Hannah Jones, senior economic research analyst at Realtor.com.®. “The shift from retail to residential is a logical solution in a country facing a persistent housing shortage.”

She added that malls in suburban states like New Jersey and Florida—both with well-established commercial corridors and housing pressures—are especially ripe for this type of redevelopment.

“Rather than continuing urban sprawl, this trend could allow more densification along commercial corridors. Put differently, this trend could allow more mixed-use areas versus pure commercial corridors,” says Jones.

She also notes that while the movement is gaining momentum, it’s not without risks. High redevelopment costs and labor shortages have led some developers to demolish malls entirely and rebuild from the ground up, often creating luxury housing that doesn’t address affordable housing needs.

Still, in places like Broomfield, CO, thoughtful development is offering a glimpse at what this model can achieve when municipalities and developers work together.

Colorado’s FlatIron Crossing

Just off U.S. Highway 36 between Boulder and Denver, FlatIron Crossing was once known solely as a regional shopping destination. Anchored by Dillard’s, Macy’s, and DICK’s Sporting Goods, and home to national retailers like Apple, Sephora, and Lululemon, the mall continues to draw foot traffic. But behind the scenes, a major transformation is underway—one that could become a template for other cities nationwide.

HiFi, a 25-acre “community hub” project adjacent to FlatIron Crossing, will bring 347 multifamily residences, 90,000 square feet of new retail and dining, and 2.5 acres of public green space to the area. It’s being led by Crescent Communities, which sees the project as more than just housing—it’s a reinvention of how suburban spaces can function.

“What we’re doing is all about complementing the mall,” Jacob Knudsen, vice president of real estate development at Macerich, told Realtor.com. “In strategic areas where we have the ability to add residential in a peripheral site or adjacent to the mall. That’s our focus.”

Knudsen has been working on the project for over six years, starting with a simple question: What is the highest and best use for this underutilized land next to the mall?

“We set out to determine what would be the best complementary project,” he says. “We’re right along the US 36—we’re basically dead centered between Boulder and North Denver—and housing in both Boulder and Denver has just gotten crazy. Rents are crazy, housing prices are crazy…we saw an opportunity.”

With a target demographic of young professionals commuting between the two cities, the project is designed to offer urban-style amenities in a suburban setting. “We’re creating kind of this little urban node,” he explained. “We’re calling it a community hub. Broomfield has nothing like it.”

Municipal partnerships endorse revitalization efforts

Broomfield officials have embraced the development as a critical step toward both economic vitality and housing access.

“This is and will remain, at least for a decade or two decades, our top economic driver,” said Broomfield, CO City and County Manager Jennifer Hoffman told the Denver Business Journal.

FlatIron Crossing is the number one sales tax generator for Broomfield, and city leaders were determined not to let it fall into decline. A key part of the redevelopment’s success has been collaboration between the city and Macerich, the mall’s ownership group.

“What we didn’t want to do was create another mall and have the same conversation in a decade,” Hoffman said. “We think we have achieved that.”

Knudsen agreed, noting that city officials were partners from day one. “We engaged with them in the very beginning, when we started thinking about what this project wanted to be. Housing was a huge focus for them.”

In response, the development includes a 20% affordable housing component—an essential win for both the city and prospective residents.

“We agreed to deliver an affordable component, so 20% of the units in the residential building will be affordable, and the other 80% will be market rate,” Knudsen said.

While Colorado’s HiFi project is not unique in its ambition, its scale and collaborative execution make it stand out. Across the country, similar projects are sprouting in suburban areas of New Jersey and Florida, where aging malls sit on valuable land in the heart of established communities.

In many ways, this trend marks a shift in how developers and municipalities view land use. No longer are malls seen as just commercial spaces—they’re potential community centers, places to live, gather, and engage.

As Knudsen summed it up: “We’re reinvesting in this property and making sure that it’s transformational for years to come.”