Downtown turnaround? In these places, yes.

Downtown Minneapolis (Photo: Dan Anderson)

For decades, “going downtown” meant something special – probably from its very first use as a term to describe the lower tip of Manhattan, which was then New York City’s heart of business, commercial and residential life.

Downtown was literally “where it was at” – jobs, shopping, cultural attractions and all.

But then, beginning in post-World War II America, many downtowns lost their luster, as people were drawn to the suburbs thanks to cheap land and easy means to traveling to and fro.

In some places, downtowns and the areas immediately adjoining them became places of high crime, industrial decay, shopworn appearances and various socio-economic pathologies.

Things hit rock bottom in the late 1970s, as personified by the Times Square area of New York City. But since then, many downtowns have slowly come back from those near-death experiences, spurred by new types of residents with new and different priorities.

Dan Cort, author of the book Downtown Turnaround, describes it this way:  “People – young ones especially – love historical buildings that reintroduce them to the past.  They want to live where they can walk out of the house, work out, go to a café, and still walk to work.”

There are a number of cities where the downtown areas have come back in the big way over the past several decades. Everyone knows which ones they are:  New York, Seattle, San Francisco, Minneapolis …

But what about the latest success stories? Which downtowns are those?

Recently, Realtor.com analyzed the 200 largest cities in the United States to determine which ones have the made the biggest turnaround since 2012. To determine the biggest successes, it studied the following factors:

  • Downtown residential population growth
  • Growth in the number of restaurants, bars, grocery stores and food trucks per capita
  • Growth in the number of independent realtors per capita
  • Growth in the number of jobs per capita
  • Home price appreciation since 2012 (limited to cities where the 2012 median home price was $400,000 or lower)
  • Price premium of purchasing a home in the downtown district compared with the median home price of the whole city
  • Residential and commercial vacancy rates

Based on these criteria, Realtor.com’s list of the Top 10 cities where downtown is making a comeback are these:

  • #1 Pittsburgh, PA
  • #2 Indianapolis, IN
  • #3 Oakland, CA
  • #4 Detroit, MI
  • #5 Columbus, OH
  • #6 Austin, TX
  • #7 Los Angeles, CA
  • #8 Dallas, TX
  • #9 Chicago, IL
  • #10 Providence, RI

Some of these may surprise you. But it’s interesting to see some of the stats that are behind the rankings.  For instance, look at what’s happened to median home prices in some of these downtown districts since 2012:

  • Detroit: +150%
  • Oakland: +111%
  • Los Angeles: +63%
  • Pittsburgh: +31%

And residential population growth has been particularly strong here:

  • Pittsburgh: +32%
  • Austin: +25%
  • Dallas: +25%
  • Chicago: +21%

In the coming years, it will be interesting to see if the downtown revitalization trend continues – and spreads to more large cities.

And what about America’s medium-sized cities, where downtown zones continue to struggle. If you’ve been to Midwestern cities like Kokomo, IN, Flint, MI or Lima, OH, those downtowns look particularly bleak.  Can the sort of revitalization we see in the major urban centers be replicated there?

I have my doubts … but what is your opinion? Feel free to share your thoughts below.

One thought on “Downtown turnaround? In these places, yes.

  1. When people think “downtown,” they tend to think of tall buildings and impressive skylines. Thirty years ago, “downtown revitalization” of U.S. cities meant refurbishing and expanding the commercial core; specifically offices and retail establishments. Increasingly, though, and as Phillip points out, it is the attraction of new and affluent residents which is driving the turnaround of many downtown areas in the United States.

    What about the rest of the world? I’ve gathered some data and ranked the world’s cities according to the size of their skylines. Here’s my Top 10 list:

    1. Hong Kong (7,840 buildings averaging 34 stories each)
    2. New York, U.S. (6,257 buildings averaging 26 stories each)
    3. Chongqing, China (1,751 buildings averaging 37 stories each)
    4. Shenzhen, China (1,129 buildings averaging 38 stories each)
    5. Dubai, United Arab Emirates (1,565 buildings averaging 34 stories each)
    6. Singapore (5,607 buildings averaging 24 stories each)
    7. Guangzhou, China (936 buildings averaging 38 stories each)
    8. Shanghai, China (1,502 buildings averaging 32 stories each)
    9. Bangkok, Thailand (1,719 buildings averaging 31 stories each)
    10. Chicago, U.S. (1,193 buildings averaging 34 stories each)

    What the centers of all these cities have in common is a very large number of high-rise residences, in addition to offices, retail malls and shops.

    Bangkok, where I live, is a case in point. Its central area has 375,000 residents, representing 2% of the 15 million people who call Bangkok and its environs home. By contrast, downtown Minneapolis had about 39,000 residents in 2014, which is about 1% of the total population in the greater Minneapolis/St. Paul metropolitan area. Unlike most U.S. cities, but similar to many other cities across the world, Bangkok’s central area boasts the region’s highest home values and resident incomes.

    Sharp-eyed readers might wonder why Seoul (20,583 buildings averaging 23 stories each), Moscow (11,910 buildings averaging 18 stories each), São Paulo (6,469 buildings averaging 21 stories each) and Tokyo (3,091 buildings averaging 24 stories each) didn’t make my Top 10. The answer is that, unlike most other urbanized areas around the world, these cities consist mainly of high-rise buildings (defined as any structure exceeding 12 stories, excluding TV towers, masts and bridges), or like Tokyo have grown so large that they encompass multiple core cities. As a result, they don’t have a central skyline which rises dramatically above the surrounding cityscape.

    Some other big cities simply don’t have many tall buildings, nor do they have a single core. These tend to fall into two groups: European cities like Paris, Dusseldorf, Madrid, Barcelona, Milan and Berlin together with cities modeled after them, like Washington D.C.; and swollen megacities of the less-developed world including Karachi, Dhaka, Cairo, Kolkata (Calcutta), Tehran, Lagos and Kinshasa. It’s hard to speak of “downtown revitalization” in these places due to the lack of a proper “downtown” with tall buildings and an impressive skyline.

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