Costco’s New Vision: Affordable Housing Built Above the Aisles

As cities around the world struggle with soaring rents and shrinking housing supply, an unexpected player has stepped into the conversation: Costco. The global warehouse retail giant is experimenting with a bold new approach to urban development—building affordable apartments directly on top of its stores.

In Los Angeles, one of the most expensive housing markets in the United States, Costco is partnering with developers on a groundbreaking project that will place hundreds of residential units above a fully functioning Costco warehouse. According to reports from The Los Angeles Times and Reuters, a significant portion of these apartments will be reserved for low- and moderate-income families, addressing a critical shortage of affordable housing in the city.

The concept is deceptively simple but highly effective. By stacking homes above large retail spaces, the project makes smarter use of valuable urban land without pushing development outward into surrounding neighborhoods. Residents will live just steps away from everyday necessities—bulk groceries, pharmacies, affordable food, and essential services—while also benefiting from proximity to public transportation and employment opportunities.

Urban planners have long advocated for “mixed-use” developments, where housing, commerce, and services coexist in the same space. What makes this project unique is the scale and visibility of the brand involved. Costco’s warehouse model typically requires large parcels of land, which are increasingly rare and expensive in dense cities. By building vertically, the company is rethinking how big-box retailers can fit into modern urban environments.

City officials see multiple benefits. Los Angeles gains much-needed housing without expanding sprawl or overburdening infrastructure, while Costco strengthens its relationship with local communities and governments. Experts quoted by Bloomberg note that such projects could help cities meet housing targets faster by leveraging land that is already zoned, serviced, and economically active.

For residents, the appeal is obvious. Living above a Costco means immediate access to affordable food and household goods—an important factor as inflation continues to strain family budgets. The convenience of having groceries, pharmacies, and jobs in the same location also reduces commuting time, traffic congestion, and carbon emissions, aligning with broader sustainability goals emphasized by organizations like the Urban Land Institute.

This Los Angeles project is among the first of its kind for Costco, but it may not be the last. Analysts suggest that if successful, the model could be replicated in other high-cost cities across North America, particularly where housing shortages and land constraints collide. Similar mixed-use developments have already gained traction in parts of Europe and Asia, according to research published by The Guardian and OECD urban development studies.

In a time when housing solutions often feel politically complex and financially daunting, Costco’s approach stands out for its practicality. Affordable apartments upstairs, everyday necessities downstairs—sometimes the smartest answers to big problems are hiding in plain sight.

And yes, that means cheap hot dogs below and affordable housing above.