Market intelligence / Technology / Trends

Two birds, one solution: Can we solve urban last-mile distribution & housing challenges at the same time?

June 2022 / By Victor Malerba, Jr.

It’s no secret that with each passing year, cities in the United States become more and more populated. By July 1st, 2022, usapopulation.org estimates that New York City will reach 8.865 million residents. With this rise in density comes numerous development challenges. Among them: abundant, accessible multi-family housing for individuals and families, and last-mile distribution solutions for companies servicing urban neighborhoods and their surrounding areas.

When it comes to the development of both multi-family housing and commercial properties like warehouses or distribution centers, particularly in metropolitan environments, each presents its own series of challenges and hurdles. Most prevalently, however, is space. As cities continue to grow, the harder it’s becoming for developers to find real estate for either venture, and the more expensive it’s becoming to bring these theoretically single-use structures to life.

But what if, in cities like New York, we could solve both challenges at once? What if we could optimize footprints vertically to—proverbially—kill two birds with one stone? Is it feasible to design and build a solution that houses both residential tenants and the complex operations of a last-mile distribution center, one that allows them to co-exist in the same building in harmony, without the two worlds interfering with or disturbing one another?

Overseas, these concepts are already becoming a reality. Well-versed in the intricacies of both markets, designers in MG2’s Shanghai office have been working on hybrid-use, single footprint solutions in Korea’s rapidly growing cities for years. From Gocheok, to Pyeongtaek, to Jichuk, warehouse facilities in Asia have been designed to co-exist in harmony with both residential and office towers that rise above. With these complex projects, however, comes a series of considerations that span design, operations, logistics, local government regulations, and perhaps most intricately, structural challenges. 

So what do those considerations look like for us in urban sprawls like the Tri-State area, and more importantly, is it possible to overcome them and create our own single-footprint solutions for multi-family housing and last-mile distribution?

1. Buy-in from every stakeholder is paramount.

As with all good projects, acceptance and approval from all concerned parties are critical to the success of any real estate venture. For a mixed-use urban building that houses both multi-family residences and a last-mile distribution center or warehouse space, stakeholders can include city governments, jurisdictions, developers, commercial tenants, and representatives of the local community. 

Pushback from neighborhood residents and city entities over concerns of traffic, noise, and potentially a loss of tax dollars are becoming more prevalent, while simultaneously viewing the potential plus of an “increase in jobs” as perhaps not the “right kind” of local jobs for their district.

Developers or commercial tenants who don’t want to have to worry about the complexities that arise from sensitivities, restrictions, or even potential violations that might occur from being in such close proximity to residential inhabitants may see these cons outweighing the pros, and want to avoid the venture altogether.

It sounds like an uphill battle to be sure, but the secret to success with this concern is a multi-faceted understanding of each stakeholder’s individual concerns, objectives, goals, and desires, as well as the design and logistics intricacies of each market. With this expertise leading the way, each piece of the puzzle is heard, understood, addressed, and solved for in the final product.

While human-centered conversations with those involved in and affected by this unique type of development are a necessary first step, investments in sustainability can also play a role in helping sway the tides of stakeholder buy-in. With many developers today pursuing LEED certification for all of their projects, the additional integration of EV capabilities into commercial facilities, as well as other sustainable initiatives that benefit cities, companies, and communities alike, can play a huge role in shifting the viewpoints of those involved.

2. Ensuring operations, logistics, and everyday life together in harmony.

With two building systems living on the same footprint, there are dozens of operations and logistics factors that need to be taken into account for both, particularly in an urban environment. Last-mile distribution facilities can often operate around the clock, and the noise that stems from the warehouse itself, as well as the receiving bays of a 24-hour operation, has the potential to be a major disruptor to the lives of those above. 

Harmonization of the vertical transportation and traffic flow of delivery trucks and facility employees with residents’ vehicles in what might be a complex, multi-tiered parking system is paramount. Additional considerations for both warehouse staff and residential tenants include safety, security, privacy, lobby areas, access to street frontage, and more. 

For these two ventures to co-exist and operate in harmony within the same building, intimate expertise is required in not only the daily logistics and flow of commercial facilities and multi-family housing, but also in the built asset management required for the optimization of operational upkeep for each typology, and where these two programs will differ and overlap.

3. Accounting for and optimizing every facet of building design & structural challenges.

Furthering the operational hurdles that accompany this new mixed-use typology are, of course, the configuration challenges behind designing and constructing two different building systems into one structure. 

In addition to considerations like the optimization of the transfer slab for the grids of commercial, parking, and residential, the mix of uses and separations as well as strict regulations from the city for each typology need to be clarified and implemented. For example, the ordinances for elements such as emergency evacuation routes, fire separations, and sprinkler systems for multi-family housing differ from those in commercial facilities, but with each of these typologies living on the same footprint, mandates for both need to be factored in the structure’s design. 

While tackling mixed-use projects like these in Korea, designers have noted that, with residential above, the column spacing and layout of the last-mile delivery warehouse floor are affected. This, in turn, affects components such as the size and shape of these columns, the location and height of industrial steel racks, and the space required for forklift and personnel maneuverability and traffic optimization.

As urban areas become denser, demand for housing and last-mile delivery solutions will continue to rise. These examples are just a handful of the dozens if not hundreds of challenges that require experienced consideration to design and build successful mixed-use solutions that house both multi-family residential and commercial last-mile warehousing facilities within the same footprint.

By employing cross-market expertise and designing solutions for both typologies in tandem, developers have the opportunity to bring to life these new, highly desirable mixed-use building types in urban settings. Making this concept a reality in a metropolis like New York or its surrounding areas is not only possible, but practical for the future of companies, cities, and urban communities alike.