Mixed-use. It's the new affordable housing buzz word.

Until now, true mixed-use — diverse uses within the same building — has only been seen locally in upscale projects such as Fifth Avenue South in Naples and, more recently, the Residences at Coconut Point Town Center in Estero.

The trendy homes in those projects are pricey but popular — the Residences has a lengthy waiting list of buyers, despite the $400,000 to $700,000 cost.

Now Lee County planners think they can take the same concept — building small residential units above retail or office space — and put it to work for affordable housing through infill and redevelopment projects.

But some experts caution that mixed-use developments aren't foolproof and present their own set of challenges, ranging from fire codes to project financing.

“Typically, affordable housing is found in the urban mix of uses. It wasn't just always called affordable housing. It was the small units, the lock-ups, the back of the stores, the basements,” said Wayne Daltry, the county's Smart Growth director. “The idea was that the commercial component would be the income stream and the size of the units would be adjustable.”

Such projects are good targets for work force housing because they're located in already dense commercial corridors and on major transportation networks, said Rick Burris, principal planner for the county's Department of Community Development.

Some who live in a mixed-use development may find employment within walking distance of one of the retail stores. For those who go elsewhere for work, transportation would be easily accessible, reducing the dependence on cars and traffic congestion.

But there's a potential glitch that has caused similar mixed-use projects in many areas to be unsuccessful, said Jill Grant, director and professor for the school of planning at Dalhousie University in Halifax, Nova Scotia. Grant has done extensive studies on mixed-use developments in different areas of Europe, Asia and North America.

“Part of it has to do with consumer behavior. Retailers tend to concentrate in pockets of big-box retails and sometimes it is hard to attract them to smaller developments or new commercial areas,” Grant said.

When that happens, the commercial segments of such projects are slow to fill up or end up being occupied by summer camps or dance studios that don't provide a viable employment option for the residents of the condos. They also do not provide the kind of rents needed to maintain the income stream for the developer.

“If you are in a market where costs are high and space is limited, you have a pretty good chance of making it work, but if you are in a market where people have other choices, it could be tough,” she said.

There's also the issue of finding financing for the project, said Adrienne Schmitz, director of residential community development, for the Urban Land Institute.

“The skill to do residential financing is different from what it takes to do commercial, and there's usually not one entity good at doing both,” Schmitz said. “Lenders want products that are clean and easy to understand and are leery about mixed-use projects, which can make it hard to find financing.”

Often, that means adding partnerships, which adds another dimension to an already complex picture. And financing is not the only thing that makes mixed-use complex. Experts say mixed-use developments require regulation and careful monitoring.

Even county ordinances are standing in the way of mixed-use projects. County regulations contain no provision for additional residential density on top of a commercial development unless the density is being transferred from another part of the development.

That doesn't work in the case of small redevelopment projects and infill projects, so Burris is working on a comprehensive plan amendment that would allow additional density for projects incorporating true mixed-use principles in the planning.

But ensuring the program is not misused and the residential units created are not just high-end, so the target market for a small apartment or condo located above a retail development is typically not the high-end market.

“You are giving up exclusivity for convenience and space. When someone is paying half a million dollars for a condo, they don't want anyone telling them to do a darn thing,” he said. “With these units there will be certain restrictions. There will also be a certain amount of urban nuisance like sounds and smells.”

Eventually, market demand could still drive up the cost of such units. To control that, the projects would either need to be a part of a cooperative or be controlled through some form of land trust that could keep the price increase in check.

“Density will be another key factor because without sufficient density, a developer wouldn't be able to make enough profit,” said Greg Toth, vice president of Select Real Estate.

“Land cost is the basis for what the ultimate cost of the home is going to be,” Toth said. “And I don't think you can make a dent by including one or two additional units per acre.”

Lee County has a lot of people who are against high density, but it is no longer just a housing question, he said, it is a growth issue. The county has been sprawling and the only way to curb that is to allow more units per acre, he said.

“We can't go very far without density,” Toth said.

Even if the plan worked in initially creating affordable housing, Grant said it would take a commitment from local government to make the homes attractive and available in the long run.

“The market is not structured to provide affordable housing,” Grant said. “The government has to do something to make it more available and ensuring long-term affordability.”

That's been easier said than done in the past, but housing prices have gotten so high and priced so many people out of the market in the last few years that the political terrain has changed.

Those areas, many say, could be a key component in dealing with the county's affordable housing problem.

“This is a good time because there are a fair number of redevelopable strips in both counties and we are heavily into infill development,” Daltry said.

If done right, mixed-use could bring workers back into the area, generate employment opportunities, bring a sense of community and create new rental and home ownership opportunities, said Russ Weyer, an associate with Fishkind & Associates, an Orlando economic consulting firm.

“It's the only land available anymore (infill and redevelopment projects), unless you have a major development project you are redoing all the way, and that's just not going to happen,” Weyer said. “This may well be the last chance we have.”