During the 1990s, the number of people living in the nation’s downtowns increased by 10%, a significant turnaround from two decades of overall decline.
Multifamily developers have played a major part in this renaissance and reinvention of American cities. They have helped breathe new life into central districts with their apartments and condominiums.
Even in sprawling Los Angeles, the downtown area is seeing renewed interest by renters and the multifamily industry. It has become one of the city’s most active neighborhoods for deals, said Curtis Palmer, managing director of Transwestern Commercial Services’ West Coast Multi Housing Capital Advisors.
“We’re extremely bullish about it,” he said, noting that there are an estimated 450,000 jobs in downtown Los Angeles and only about 24,000 residents. To close this gap, several huge mixed-use projects are in the works. A city ordinance is also allowing for office buildings and other older developments to be converted into residential projects.
Palmer attributes the interest in downtown living to several factors. First, there’s a general desire for urban infill living, he said. People are tired of long commutes and want to be close to work.
Another reason is that Los Angeles – which boasts the new Disney Concert Hall – and other cities have added new amenities in their downtown districts, making them more desirable places to live, Palmer said.
Who Lives Downtown, a report released by the Brookings Institution, paints a revealing picture of what’s happening in our downtowns. The study looks at 45 downtowns from 1970 to 2000.
Here are a few key findings:
• In general, downtowns boast a higher percentage of both young adults and college-educated residents than cities and suburbs. In 2000, 25- to 34-year-olds represented nearly 25% of the downtown population, up from just 13% in 1970. About 44% of downtown residents had a bachelor’s degree or higher.
• Downtowns are more racially and ethnically diverse than they were 20 years ago. From 1980 to 2000, the combined share of white and black residents fell from 81% to 73%. The share of Hispanic and Asian residents grew. By the 1990s, however, whites began returning downtown, increasing their numbers by 5% over the decade.
• Downtown homeownership rates more than doubled during the 30-year study period, reaching 22% by 2000.
The Brookings report also said that some of the most and least affluent households live downtown, an interesting finding for apartment developers who aim their properties at rich, young renters. According to the study, 19 of the sample downtowns have at least one tract where the household median income surpasses that of the metropolitan statistical area (MSA). On the other end, 38 downtowns have at least one tract where the income level is 50% or lower than their MSA median.
Although there has been an increase in the number of downtown homeowners, reaching 22% by 2000, the dominant housing choice remains rental apartments.
The Brookings Institution describes five major categories of downtowns – fully developed, emerging, on the edge of takeoff, slow-growing and declining.
There are five fully developed downtowns – Boston, Midtown Manhattan, Lower Manhattan, Chicago and Philadelphia. These downtowns experienced positive household growth in all three decades of the study, increasing by an overall 38%. They are home to about half of the nation’s downtown households.
Emerging downtowns are smaller and less dense. These areas experienced an average 5% decline in households in the 1970s, practically no growth in the 1980s and then a strong increase, 32%, in the 1990s. These emerging downtowns include Atlanta, Baltimore, Charlotte, Cleveland, Denver, Los Angeles, Memphis, New Orleans, Norfolk, Portland, San Diego, San Francisco and Seattle.
The report lists five “downtowns on the edge of takeoff” – Chattanooga, Dallas, Miami, Milwaukee and Washington, D.C. These downtowns had far greater losses in the number of households between 1970 and 1990 than the emerging downtowns. They, however, made a considerable comeback in the 1990s, with household growth rates averaging 25%. This outpaced the growth rate of their overall cities, which saw only a 4% increase.
Slow-growing downtowns tended to be the smallest and least dense of the sample cities. They experienced a 30% drop in their total number of households in the last three decades, but experienced a 9% growth in the 1990s. These cities include Albuquerque, N.M.; Austin, Texas; Boise, Idaho; Colorado Springs, Colo.; Columbus, Ohio; Indianapolis; Lafayette, La.; Phoenix; Pittsburgh; and Salt Lake City.
The declining downtowns lost residents in each of the last three decades, and had just 65% of the number of households they did in 1970. By contrast, their cities and suburbs experienced considerable growth during the same period. The report lists a dozen downtowns in this group, including Cincinnati, Detroit, Minneapolis, Orlando, San Antonio and St. Louis.