Big-box retailers including Costco and Target are increasingly partnering with affordable housing developers to expand into dense urban neighborhoods, gaining access to scarce land while helping cities address housing shortages. One high-profile example is an approximately $450 million Los Angeles project that will include 800 apartments, affordable housing units, and what is expected to be the first U.S. residential development anchored by a Costco store, slated to open in 2028. In New York City, a Target store opened in Harlem as part of a development with 171 affordable housing units. Developers say the partnerships allow retailers to reach new customer bases and prime locations without bearing all development costs, while affordable housing projects can qualify for tax incentives, zoning flexibility, and public financing support. Despite challenges around logistics and traffic, developers expect the mixed-use model to spread as other national retailers express interest in similar partnerships.
Costco Wholesale CorpCostco is partnering on a mixed-use project with affordable housing, gaining access to dense urban locations and new customer bases.
Target CorporationTarget opened a store in Harlem as part of an affordable housing development, expanding into urban areas and reaching new customers.