Downtown revival depends on residential growth

August 11, 2010

Efforts to revitalize downtown centers are paying off for many U.S. cities, according to The Brookings Institution, Washington, D.C. Using U.S. Census Bureau data from 1970 to 2000, Brookings analyzed downtown households, populations, and income trends in 44 U.S. cities and 45 downtowns (New York City is represented by both Lower Manhattan and Midtown Manhattan), and discovered that the residential renaissance within the urban core is bringing with it much-needed activity and vitality.

From 1970 to 2000, the number of downtown households increased 8%, which represents a net gain of about 35,000 housing units. The numbers seem small when compared to a 99.7% increase in suburban households during the same 30-year period (representing a net gain of about 13 million housing units), but the increase is significant in the way it influences a city's growth.

Residential units support commercial activities and bring market confidence that spurs citywide economic growth and development. To that end, a 141% increase in downtown homeownership rates between 1970 and 2000 is seen as very significant. Homeownership rates grew during all three decades—33% between 1970 and 1980, 35% from 1980 to 1990, and 36% from 1990 to 2000. Despite its continued increase, homeownership only accounts for 22% of the downtown housing market, indicating that rental units are still the dominate dwellings.

Downtowns with the highest rates of ownership in 2000 include: Chicago (40.7%); Lafayette, Ind. (35.6%); Denver (35.5%); Austin, Texas (35.1%); and Miami (34.3%). Downtowns with the lowest homeowner rates include: Cincinnati (1%); St. Louis (2.9%); Cleveland (2.9%) Shreveport, La. (4.6%); and San Francisco (6.6%).

The majority of residential units available to homeowners and renters within the downtown core are multifamily high-rises, attached townhouses, and existing facilities—such as warehouses or offices buildings—that were repositioned for residential use.

The study's findings on downtown population changes show that the 1970s were unkind to urban cores. That decade saw downtown populations decline by a staggering 82%, slowing to a 47% decrease during the 1980s, and rebounding in the 1990s when downtown populations increased by 10% by 2000.

Regionally, downtowns in Western cities and Northeastern cities experienced the greatest growth, while downtowns in Southern cities and Midwestern cities experienced the greatest declines.

Downtowns with the greatest population increases between 1970 and 2000 include: Norfolk, Va. (96.8%); Seattle (85.6%); San Diego (72.2%); Los Angeles (63.4%); and Lower Manhattan (61.5%). Worth noting is that Seattle, San Diego, Los Angeles, Lower Manhattan, and Midtown Manhattan were the only downtowns to experience steady population increases during all three decades.

Downtowns experiencing the greatest population decreases during the 30-year review period include: St. Louis (-67%); Columbus, Ohio (-52.3%); Columbus, Ga. (48.1%); Detroit (-46%); and Orlando, Fla. (-40.8%).

In some cases, downtown population increases outpaced the city's population increases—what the report terms "downtown up, city down." Chicago's downtown, for example, grew 39% between 1970 and 2000 while the city itself lost 13% of its population. In contrast, Orlando saw its city population increase by 89% while its downtown population shrank by almost half.

Income trends reveal that downtown residents account for some of the city's most affluent residents and some of its poorest. An important gauge of a downtown's relative success, according to the study, is how its median household income level compares to its surroundings. Twenty four of the 45 downtowns have at least one tract whose median income surpasses the city median, while 36 downtowns have at least one low median income tract where income levels are 50% or lower than the city's median.

For the full report, visit: www.brookings.edu/metro/pubs/20051115_birch.htm.

         
 

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