'Socioeconomic Need,' Market Demand Driving Vertically Dense Mixed-Use Development

Cities are increasingly seeing vertical density and mixed-use towers as sustainable, appealing solutions to create more housing, driving more development despite challenges like heightened construction pricing. 

But making sense of the design and financing for these projects requires gymnastics, and for many of them, only the ultra-wealthy can afford to move in, panelists said Monday at the 2026 National Association of Real Estate Editors conference.

“Vertical mixed-use projects are extraordinarily complicated,” said Scott Ziegler of Ziegler Cooper Architects.

Ziegler cited The Ritz-Carlton Hotel & Residences Houston, which will have 154 hotel rooms, 114 private residences, retail and parking in a 44-story tower, as an example. Different uses like hotel, residences, retail and office have different needs, users and even lenders, he said.

From an architectural perspective, stacking presents its own challenges. The column grids that work for parking garages don’t work well for condos, Ziegler said.

“So we have all these transfer beams and structural gymnastics trying to make all those uses come together,” he said.

But the environmental impact is relatively minimal compared to suburban residential development. A 200-unit condo project could be built on an acre, while 200 homes in the suburbs would require about 70 acres of land, plus roads, sewer and other infrastructure, Ziegler said.

The financing model for infrastructure in municipalities is broken, Westdale Properties Chief Operating Officer Mitchell Cohen said. Municipal bonds issued to finance road, airport and other infrastructure projects in the U.S. surpassed $500B last year, a new record.

Towers require significantly less infrastructure investment. Cities are now pivoting toward density in the name of sustainability, although mixed-use towers still have a significant carbon footprint, Cohen said. Westdale is developing the Forma Towers in Toronto, and Cohen cited the importation of marble from Italy for that project as an example of carbon intensity. 

“[Vertical density is] not a panacea for sustainability,” Cohen said. “I believe that density is no longer a planning tool. It's a socioeconomic need. We need housing in our cores for a city to survive.” 

That housing should include places where the median worker can afford to live, he said. 

Cities like Denver and Austin have allowed exceptions for taller buildings in exchange for providing affordable housing in the development, Ziegler said, an example of density helping to solve multiple problems.

Municipal incentives can be helpful when construction prices have risen at twice the rate of inflation. But prices for luxury condominiums have risen even faster, driving a surge in their development, panelists said.

The Forma Toronto, which will be the tallest residential towers designed by the late renowned architect Frank Gehry, has captured the highest-ever prices in the Canadian condo market at 2K Canadian dollars per SF, or about $1,446, Cohen said. 

Miami-based Fortune International Group is developing seven condominium towers in the Miami market, including St. Regis Residences, Sunny Isles Beach, which will have two 62-story beachfront towers. The brokerage group is also selling luxury condos at 28 projects, CEO Edgardo Defortuna said. 

The first St. Regis tower is 89% sold while under construction, he said, while the second tower had its groundbreaking earlier this year and already has $300M of sales. 

Ultimately, the market dictates what developers build. While cities are pushing dense vertical development, residents are also enjoying and demanding the lifestyle it offers. 

How the tall towers meet the ground and the offerings there is of the utmost importance, Defortuna said.

“If you have parks next door and have the amenities and the retail and the restaurants and the activity that people want, the combination of both factors makes urbanism very livable,” he said. “And more and more people are looking for convenience.” 

An increasing number of families and young people are no longer interested in moving to the suburbs at a certain point in their lives, Cohen said. The condo market has shifted significantly toward families over the past 40 years, and as more condo projects break ground, designers and developers have to consider their end users.

“The market now is families that want urban living,” Cohen said. “A lot of them want to gravitate back to the city for a number of reasons, and they will more and more as we build them the proper product.”