Downtown Houston's foot traffic is returning — to an extent

Why it matters: Downtowns are typically the beating economic heart of a city, funneling revenue into city coffers via taxes and more.

Zoom out: Houston has had a better downtown recovery than Austin, which has seen 52.5% of pre-pandemic levels, according to the data.

• San Antonio has been the best Texas city with 66.9% returning.

The big picture: Several U.S. cities with diverse downtowns — meaning a healthy mixture of office space, housing, attractions and so on — have nearly returned to, or even exceeded, their pre-pandemic foot traffic rates.

• San Diego, for example, is at 88% of its pre-pandemic foot traffic. That's partly because the city's downtown has long been diversified and partly because tourism has rebounded, says William Fulton, UC San Diego Design Lab visiting policy designer.
• Cities with downtowns that almost exclusively catered to office workers are struggling to recover in the remote and hybrid work era. New York is at 67% of pre-pandemic foot traffic, and San Francisco is at a measly 31.9%.

What's happening: It's increasingly clear that if cities in the latter group want vibrant downtowns moving forward, they need to transform those neighborhoods into something resembling those in the former.

• Such efforts are underway in many major American cities, powered by big incentives for local developers willing to play ball.
• Office-to-residential conversions are particularly hot — though successful projects require time, money and far more effort than simply swapping desks for beds.

Between the lines: Mobile phone data can't distinguish among devices owned by downtown residents, transient workers or visitors — meaning it's best understood in context with other data points.

• Case in point, via Karen Chapple, director of the School of Cities and professor of geography and planning at the University of Toronto: "New York is a little bit of a deceptive case because the visitor activity is overwhelming office activity. So New York may be in more trouble than we know."
• "We're seeing those office vacancy rates creep up, which is an indicator that there's a fundamental weakness there."

What they're saying: "One of our biggest surprises of this year has been seeing the flattening of recovery trajectories," Chapple says.

• "I was saying, 'Oh, gosh, we're coming back. We're trending up. We're going up like 10, 15, 20% a year, and we'll be back. You know, most of these cities that have been hovering around 40 or 50% are going to be back at 70%.' And I was really wrong."

What we're watching: Whether people actually want to live downtown.

• Is it a case of "build it and they will come," or have people largely settled into their new lives centered around cities' outer neighborhoods, or the suburbs proper?
• The answer will likely be different city to city. Living in downtown San Diego, for instance, is attractive in ways that living in Midtown Manhattan will never be.
• Companies' efforts to entice or force workers back into the office have found mixed results at best; many workers who can work entirely or partially remotely now seek out that possibility as an important perk.
• Housing affordability is also a key factor.

Reality check: Simply offering more, and more affordable, housing is only one piece of the picture.

• Vibrant residential communities also need attractions, amenities, green space, walkability, good public transit, safety ... the list goes on.
• "Many downtowns were reborn in the 1980s as gigantic office centers, and that's just not going to work anymore," says UCSD's Fulton. "Downtown has to have a tremendous diversity of activities in order to succeed from now on."
• Climate resilience further complicates the problem. How do you attract residents to a neighborhood that might be many degrees hotter than the suburbs, or even one day entirely underwater?

The bottom line: Struggling cities know what they have to do. The question is: Can they do it quickly and effectively enough to make a difference?