May 4, 2023 - Economy

Which American downtowns are thriving — and which are struggling

Mobile device activity in select downtown areas compared to prepandemic levels
Data: University of Toronto; Chart: Alice Feng/Axios

Downtown activity has returned to — or even exceeded — pre-pandemic rates in a handful of U.S. cities, but most downtowns are still struggling to attract the foot traffic they once did.

  • That's according to anonymized mobile device connectivity data analyzed by researchers at the University of Toronto's School of Cities.

Why it matters: Downtowns became ghost towns during the height of the COVID-19 pandemic as people sought to "flatten the curve" by staying at home as much as possible.

  • Even as the pandemic ebbs, the era of remote and hybrid work it ushered in means fewer people are visiting restaurants, bars and shops.
  • That has big implications for downtown economies, which have historically relied on commuting workers who spend money before, during and after their daily 9-5s.

By the numbers: Salt Lake City (139%); Bakersfield, California (118%) and Fresno, California (115%) had among the country's highest post-pandemic downtown recovery rates as of February (the most recent data available), as measured by estimated foot traffic.

  • San Francisco (32%), St. Louis (38%) and Portland, Oregon (40%) had among the lowest.

Zoom in: San Francisco's sluggish recovery is due at least in part to its heavy concentration of tech workers — many of whom decamped elsewhere amid the pandemic — as well as a shortage of affordable housing.

  • Nordstrom is closing both of its downtown San Francisco stores, the company announced this week — a major loss that reflects businesses' increasingly sour attitude toward the area.
  • New York City has also been affected by remote work, though to a less extreme extent. The Big Apple is at 75% of pre-pandemic downtown activity, per the latest data.

Yes, but: Businesses and political leaders are increasingly trying to curtail remote and hybrid work, which could boost downtown recovery levels.

How it works: The researchers essentially treated smartphones and other mobile devices as a proxy for their owners — if a device pings a nearby cell tower, it's a good bet that's where the device's owner is.

  • Of note: For this analysis, "downtown" is defined as areas of a given city with the highest employment density.

Reality check: While downtown activity is one indicator of a city's economic health, it doesn't paint a full picture on its own.

  • The lure of better, springtime weather, meanwhile, might convince more people to head back into the city — to enjoy dinner and drinks al fresco, for instance.

What's next: Many cities are experimenting with various efforts to rethink their downtown neighborhoods — including, most notably, office-to-residential building conversions, which are poised to skyrocket in the coming years.

  • Yet that idea is more cumbersome than it might seem, in part because the design and shape of some office buildings make them ill-suited for residential use.

The bottom line: Whether you feel like America's downtowns are once again thriving depends a lot on where you live.

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