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Shopping for a home in the Bay Area? Head to the mall

Marisa Kendall, The Mercury News on

Published in Home and Consumer News

Taking the traditional shopping trip to a whole new level, Bay Area residents aren't going to malls just to buy shoes anymore -- instead, they're moving in.

In an attempt to draw new crowds, a growing number of malls are building housing amid their movie theaters and Abercrombie & Fitch stores. It's a solution intended to keep malls relevant as many retailers struggle, and one experts say may play a role in easing the region's housing shortage.

"It's pretty depressing when you see a lot of these dead malls and desperate malls," said Ellen Dunham-Jones, a professor at the Georgia Institute of Technology's School of Architecture. "To me, it's just a fantastic opportunity for us to now address the 21st century challenges that those properties were never designed for."

In the Bay Area, housing is at the forefront of that list of challenges. The option isn't only for dead malls -- newer shopping centers that have embraced residential construction include trendy Santana Row in San Jose and Bay Street in Emeryville, both offering modern apartments and condos above bustling retail stores.

More are in the pipeline. Developers who bought Richmond's struggling Hilltop Mall last summer have the city's OK to erect up to about 10,000 residential units there. Owners of the dead Vallco Mall in Cupertino are considering using housing to revamp the property. And down south, mall giant Westfield -- owner of Valley Fair in Santa Clara -- plans to open its first residential building in San Diego in 2019, followed in 2035 by a mixed-use development at a defunct Los Angeles mall.

The heyday of the traditional American mall is long gone, and many of these shopping relics have been left to flounder under the weight of shuttered Sears, JCPenney and Macy's department stores, and oceans of empty parking lots. But these malls often make prime targets for housing developments -- they tend to be located in convenient, transit-accessible areas but aren't close enough to residential neighborhoods to stoke NIMBY complaints, said urban development expert Richard Florida, a professor at the University of Toronto and author of "The New Urban Crisis."

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And they're increasingly empty. As many as a quarter of U.S. malls likely will close in the next five years, Credit Suisse researchers wrote in a May report. In those dead malls, Florida sees an opportunity to reimagine neighborhoods as denser, more efficient communities.

"If we think a little bit outside the box, they offer a way (to rebuild) our suburbs, instead of these single family houses on cul de sacs," he said.

A single defunct mall can become host to thousands of new housing units as part of a mixed-used development, giving residents easy access to stores and other amenities as well as a feeling of community. But homes in revamped or brand new malls still are likely to be out of reach for many workers in the Bay Area. Upscale Santana Row, for example, offers little for less than about $2,500 a month, according to Apartment Finder.

The once-popular Hilltop Mall in Richmond is a prime example of a 1970s-era shopping center that has seen better days. It went into foreclosure around 2013, and then JCPenney -- one of the mall's major anchor stores -- shuttered last year. With an occupancy rate of just 75 percent, Hilltop was on the brink of death when it went on the auction block in 2016.

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