One way to address California’s housing crisis: turn dying malls into housing

Good morning, and welcome to the Essential California newsletter.

It’s Thursday, March 2.

Remember the mall?

Of course you do — the pinnacle of consumerism and youth culture for generations of Americans.

My teenage memories of the mall are soaked in neon light, with essential stops at the Vans store, Hot Topic and Game Stop. I’d gawk at the risque shelves at Spencer’s, then grab a bite at Hot Dog on a Stick, washing it down with some Orange Julius as I tried desperately to look both interesting and uninterested to the girls passing by, their arms heavy with bags from Wet Seal, Hollister and Zumiez.

But as we grew up, conditions at our malls began sliding down. For many, the convenience of online shopping replaced trips to the mall. With the rise of social media, kids found new spaces to connect with their friends. After decades of declining foot traffic, the pandemic was a powerful gut punch that many retailers haven’t been able to recover from.

As California continues to sputter its way through an ongoing housing shortage, more of those empty spaces are being eyed for housing development.

That’s playing out at dead and dying malls in Orange County, as my colleague Hannah Fry reported recently.

The city of Westminster has plans to reshape its local mall to include up to 3,000 residential units and 425 hotel rooms, plus 17 acres of surrounding green space.

Roughly 20 miles southeast, work is underway to build up to 1,500 apartments, a hotel, office space, green space and new retail stores where the Laguna Hills Mall once thrived.

“Orange County is desperate for housing, with rents and home prices escalating and state laws requiring cities to zone for new construction,” Hannah wrote. “In a region where there is little undeveloped land and neighbors are likely to push back at new housing, some see declining malls as ideal places to build.”

Projects like the ones in Orange County are likely to be pitched across the state in the coming months, thanks in part to upcoming changes in state law.

In Sept. 2022, Gov. Gavin Newsom signed a pair of bills from the state Assembly and Senate that aim to make it easier to build housing on land currently zoned for commercial use. Both are set to take full effect on July 1 this year.

Projects could also catch on nationwide as developers indicate a desire to capitalize on converting commercial space to housing. A recent report from the Urban Land Institute and National Multifamily Housing Council Research Foundation noted national estimates of up to “1 billion square feet of surplus and obsolete retail space.”

That report, funded by pro-development organizations, studied the feasibility of converting commercial space like shopping malls into housing and concluded “conversions can be financially feasible in a broad range of markets” and “could go far in adding to our housing stock.”

So with the Golden State on the front lines of a national housing crisis, tearing down some of our nostalgia to put up new homes and green space could be a more common sight (but don’t sleep on the all-but-guaranteed NIMBY backlash).