The Tower as Neighborhood: Why Mixed-Use Skyscrapers Are Finally Working

On a Tuesday afternoon in October 2023, the lobby of 30 Hudson Yards in Manhattan looked less like the base of a 1,268-foot office tower and less like a transit concourse — and more, unmistakably, like a neighborhood corner. A pediatric urgent-care clinic occupied one bay. A wine bar drew a post-lunch crowd two doors down. A dry cleaner operated beside a grab-and-go grocer stocked with actual produce, not just protein bars. The building's 90,000 square feet of ground-floor and podium retail had achieved something that vertical mixed-use projects spent four decades failing to produce: genuine street-level life, sustained across the full working week, inside a single structure.

The Long Failure of the Vertical Village

The idea of stacking housing, retail, offices, and civic uses inside a single tower is not new. John Portman tried it in Atlanta with the Peachtree Center complex in the 1970s — a cluster of interconnected towers that promised to bring the city indoors. It produced instead a hermetic world that drained the surrounding blocks of pedestrian activity and aged badly as retail migrated to suburban malls. Chicago's Illinois Center, developed through the 1970s and 1980s along the lakefront, offered a similar cautionary lesson: a massive mixed-use platform that was perpetually underleased, confusing to navigate, and disconnected from the street grid it was supposed to animate.

The structural problem was always economic sequencing. Developers needed anchor office tenants to finance construction, which meant office floors were sold or leased first, at the highest rents, to the most demanding tenants. Retail and residential components were afterthoughts — assigned to floors or podium bays that office tenants didn't want, priced to recover cost rather than attract the right mix of uses. The result was predictable: a CVS, a Chase branch, a sandwich chain, and 4,000 square feet of empty storefront. That formula persisted well into the 2010s.

What changed it was not better design. It was the collapse of the single-use office tower as a viable product. Post-pandemic office vacancy in American CBDs averaged 19.6 percent nationally by mid-2024, according to CBRE — and in markets like San Francisco's Financial District, the figure exceeded 35 percent. Developers who had spent thirty years treating mixed-use as a zoning concession suddenly had to treat it as a survival strategy.

The Economics of Stacking Uses Correctly

The shift in thinking is visible in how pro formas are being structured. At One Chicago Square — the 76-story dual-tower project developed by Related Midwest and JDL Development that opened its residential component in 2022 — the financing was built around a genuine vertical stack: 792 apartments across two towers, a 35,000-square-foot Whole Foods as the anchor retail tenant, a hotel component, and office space. Critically, the Whole Foods was not an amenity. It was underwritten as a revenue-generating anchor that would drive foot traffic to the broader retail podium, justify higher residential rents on the lower floors, and stabilize the project's income during the lease-up period for the upper residential units. The grocery store opened before the first residents moved in.

That sequencing matters enormously. In traditional mixed-use towers, retail was the last thing to lease and the first thing to fail. At One Chicago Square, the retail anchor was the first signed commitment — and it shaped everything from the loading dock configuration to the ceiling heights in the podium to the placement of the residential lobby. Related Midwest's senior vice president of development, Curt Bailey, has described the project's underwriting as treating each use as a "demand generator" for the others, rather than as isolated income streams. That framing — borrowed from how regional mall developers thought about anchor tenants in the 1980s — is now standard language in vertical mixed-use pitches to institutional lenders.

Zoning has also evolved to enable this. Chicago's Planned Development designation, which governs One Chicago Square, allowed FAR ratios above 12.0 in exchange for public plaza improvements, affordable unit set-asides, and ground-floor retail continuity requirements. In New York, the City of Yes for Economic Opportunity text amendment, adopted in 2023, loosened restrictions on ground-floor commercial uses in residential zones — a direct attempt to allow the kind of incidental, neighborhood-serving retail that makes vertical mixed-use feel inhabited rather than curated.

What "Working" Actually Looks Like

The clearest operational benchmark for a mixed-use tower that is actually functioning as a neighborhood is what urbanists call temporal distribution — the spread of activity across the full 24-hour cycle, not just the 9-to-5 office peak. By that measure, the most successful recent projects are not necessarily the largest or the most architecturally celebrated.

Consider 111 West 57th Street in Manhattan — the Steinway Tower, developed by JDS Development Group and Property Markets Group, completed in 2022 at 1,428 feet. It is the world's most slender supertall, with a width-to-height ratio of approximately 1:24. Its program is almost entirely residential: 60 ultra-luxury condominiums averaging over $15 million per unit. By the vertical mixed-use standard, it is a failure — a monument to a single demographic, generating almost no street-level activity and contributing nothing to the temporal spread of uses in Midtown. Its commercial base is a restored Steinway Hall, which hosts occasional events but is not a public amenity in any meaningful sense.

Contrast that with The Hub in Boston's Roxbury neighborhood — a 2019 project by Windup Space and the Roxbury Tenants of Harvard that combined 281 income-restricted apartments with ground-floor retail reserved for minority-owned small businesses, a community health clinic, and a branch library. The building is 14 stories, not 60. Its FAR is roughly 6.5. But its temporal distribution is genuine: the library draws foot traffic from 8 a.m. to 9 p.m.; the health clinic generates consistent weekday activity; the retail tenants, most of whom operate on evening and weekend hours, fill the gaps. The building functions as a neighborhood anchor in a way that 111 West 57th Street — despite being roughly 100 times more expensive per square foot — does not.

The lesson is not that luxury towers are bad urbanism. It is that program mix, tenant selection, and lease structure determine neighborhood function more than height or architectural ambition. A 70-story tower with a curated set of uses that serve different populations at different hours will outperform a 15-story tower stuffed with a single demographic and a single-shift retail program.

The Conversion Opportunity and Its Limits

The most urgent application of vertical mixed-use logic right now is office-to-residential conversion — the attempt to repurpose obsolete Class B and Class C office buildings into housing, often with mixed-use ground floors, in CBDs that are simultaneously over-officed and under-housed. The opportunity is real. The Urban Land Institute estimated in 2023 that approximately 1.4 billion square feet of U.S. office space is functionally obsolete — too old, too inefficient, or too poorly located to compete for post-pandemic tenants. Converting even a fraction of that stock would represent a meaningful addition to housing supply in cities where residential vacancy rates are below 3 percent.

San Francisco has moved furthest on this, driven by the severity of its downtown vacancy crisis. Mayor London Breed's Office to Housing Conversion Program, launched in 2023, offered streamlined permitting and density bonuses for projects that converted downtown commercial buildings to residential use. The first significant project under that program — the conversion of 100 Van Ness Avenue, a 29-story Brutalist office tower — had already been completed in 2021 under prior approvals, producing 399 apartments in a building that had sat largely vacant for years. The program is attempting to replicate that outcome at scale, targeting the roughly 30 buildings in the Financial District and SoMa that meet the floor-plate and structural criteria for feasible conversion.

But the limits are significant. Most post-war office towers have floor plates of 20,000 to 30,000 square feet — far too deep for residential use without major structural intervention to introduce light wells or cut-throughs. The economics of conversion frequently don't pencil without substantial public subsidy: the gap between the cost of conversion and the achievable residential rents in a market like San Francisco's — where even post-correction rents are high by national standards — can exceed $200,000 per unit. That gap requires tax increment financing, low-income housing tax credits, or direct city capital, all of which are constrained by municipal budget pressures. The conversion wave is real, but it will not be the universal solution its advocates sometimes suggest.

What the best mixed-use towers of the current cycle have demonstrated — from One Chicago Square's grocery-anchored podium to The Hub's library-and-clinic base to the more deliberate tenant programming at Hudson Yards — is that vertical integration works when it is underwritten from the start as a system of interdependent uses, not assembled as a collection of separate income streams stacked on top of each other. The next generation of towers being designed right now, in Chicago, Seattle, Austin, and a dozen other cities actively revising their zoning frameworks, will be built by developers who understand that distinction. The ones that don't will produce the next generation of empty lobbies.