© 2019 by Capital Frontiers

The Future of Downtown

 

One of the most widely celebrated findings of the 2010 census was the slight uptick in the population of Americans living in downtowns. The subject of many articles, this uptick paled in comparison to the widespread suburban growth figures, but after many decades of urban decline there is legitimate reason for city leaders to celebrate this ever-so-modest turnaround for their urban cores. In fact, hidden in the numbers is the fact that this mild turnaround for central cities might even have been sharper than the census made it appear because most of that urban growth seems to have happened toward the end of the last decade. As a result, these numbers have ushered in a new wave of urban optimism and have spurred planners across the nation to devote renewed attention to the future of downtowns, with many quick to portend a return to urban glory last seen over 50 years ago.

 

Amid this frenzied excitement, however, it’s easy for planners to lose sight that the future may not match the past. Just because the bleeding may have slowed in some central areas, there’s no guarantee the future will match the past. Downtowns are still underperforming in many ways.

 

In the big picture, cities and downtowns are still declining compared to their regions. While the 2010 census revealed mild gains for some central cities, it also confirmed that if current trendlines hold 2020 will mark the first time since reliable data became available that both the population share of core cities and the job share of downtowns (as measured by jobs within 3 miles of City Hall) will both drop below 20% of metropolitan area totals for the top 10 metros in the United States.

 

In 2000, 24.7 percent of the population of the top ten metropolitan areas lived within the area’s largest core city, and 6.5 percent lived within three miles of City Hall (http://www.census.gov/population/metro/data/pop_pro.html). By 2010 those figures dropped to 21.5% and 5.65% respectively.

 

The reason those residential percentages are dropping is that regional growth continues to outpace central growth by exorbitant margins. But downtowns are losing jobs much faster. Not only are downtowns losing out in the percentages to the suburbs, but many are even hemorrhaging employment in the raw numbers. Between 2000 and 2010 the top 10 downtowns lost an average of 51,000 jobs, while the top 100 lost an average of 20,000.

 

This all comes as new competitive alternative job centers are forming continuously within regions. The combination of growing metro areas subsuming former outlying towns with linked infrastructure, new centers forming, and new zoning geared toward congealing suburbs into centers is giving downtowns stiff competition. Consider Columbus, for example, whose downtown job total of 88,000 has long competed with the nearby 60,000-student Ohio State University campus area as a local centerpiece. Now Easton Town Center, a new complex opened north of the city in 1999, is suddenly home to 25,000 jobs, nearly a third of downtown, despite being the work of a single developer.

 

Most glaring from the downtown jobs perspective is the fact that the highest-earning, highest-profile jobs – those serving the national and international economy – have fled downtown at an unprecedented rate. While sporadic stories of big companies moving downtown have made headlines in many cities, the reality is that no matter how robust they may seem to the casual observer, downtowns are no longer the powerful job hubs they once were in America’s major cities. Of the top 10 metros, eight now have more Fortune 500 companies headquartered outside the core city than within it; in Chicago, for instance, home of the “hottest central business district in America” according to one publication, just six of the region’s 29 Fortune 500 headquarters sill propagate within the city limits. Of the eight cities mentioned, just 37 out of 140 total Fortune 500 headquarters now reside in the core city. So while these regions still carry economic clout – the top 10 metros house nearly half (238) of the Fortune 500 behemoths – the majority of those companies aren’t downtown anymore.

 

This shouldn’t be particularly surprising because as regions keep expanding it’s inevitable, given the much-written-about widespread ceiling on commute time tolerance, that major companies will continue to follow their employees out faster than cities can concoct new ideas for trains heading inward.

 

For the few companies that have moved into downtowns, the traditional narrative often revolves around those being the places where young professionals want to live. But those same young professionals are getting older: Between 2000 and 2010 there was a substantial increase in the percentage of Americans in their 20s, and a major drop in the percentage of Americans in their 30s and 40s. The next decade will see substantially more Americans entering their 30s than the last, and it’s likely that if anything shifts in the way companies respond to their employees’ lifestyle preferences, they will most likely be responding to the needs of the increased number of 30-somethings, who generally are less urban-inclined than they were in their 20s.

 

Many cities invested heavily in the last decade into attracting this large pool of 20-somethings to their cores, but despite that investment between 2000 and 2010 there was not a single city in the country that experienced regional population loss that also experienced downtown job growth. Just eight of the top 100 cities grew their downtowns at a faster percentage rate than their region, and none gained more actual population.

                                                                                             

But despite the narrative of suburbs versus cities, the real trendline pacing downtown decline is the increase in suburban populations that isn’t coming from within. While rose-colored glasses can still salvage a picture of cities gaining meager population increases, the fact that a downtown has stopped shrinking doesn’t mean suburbs have stopped growing. In most cities, downtown decline has never kept up with suburban growth, and no amount of central revitalization is likely to regain downtowns the economic status they once enjoyed.

 

So behind the stories celebrating the end of downtown decline is a serious set of more nuanced questions: for example, as downtowns lose clout as economic hubs, what is their future, especially if they continue gaining population?

 

What about transit systems, whose primary purpose has throughout history been almost exclusively to get people downtown – and rarely elsewhere (1/3 of transit trips nationwide are into or out of the top five central business districts in America, and outside these areas less than one half of one percent of Americans use transit for other purposes)? Historically, the monopolization of transit use for downtown commuting has reinforced the economic weight of those downtowns. Yet many of the largest cities are now making cross-regional transit lines a priority to increase accessibility to metropolitan jobs, most of which are now located outside city centers. Washington DC’s purple line, for example, will enable quicker cross-city mobility without crossing through downtown at all. In Chicago, most transit trips are on buses, which generally traverse across the city, as opposed to on rail, which is oriented toward downtown, even despite funding that is heavily weighted toward the rail. And in all cities, the growth in ride sharing and potential autonomous options has, and is likely to, continue dwarfing transit usage.

 

As direct connections into cities become less important, so too does the urgency for “saving” declining neighborhoods surrounding downtowns. In many cities, even while downtown may have stopped losing population trendous decline continues around it. Among the 100 largest cities, 127% of the growth within three miles of downtown has occurred in the first mile from City Hall. In other words, outside of this uber-inner band, population decline largely continues unchanged. In the 21st century, it is these areas between downtowns and suburbs whose low land costs and proximity to major infrastructure may prove the most ripe construction grounds for industry, freight yards, and data centers, rather than the dense reunifications that planners desire.

 

The numbers suggest that the future of downtown looks increasingly residential – more as high-end, thriving historic, residential districts than as major economic clusters. Even today, their skylines are aging. In the 20 years between 1972 and 1992, an average of 3.5 buildings over 700 feet were constructed every year in American downtowns, but since 1993 that figure has dropped to just 1.0. If the appeal of aging buildings isn’t so strong for big companies, perhaps it will be for residents, with whom the preservation market has never been stronger.

 

The weight of American downtowns is enormous, and I can’t discount the value of central locations for widespread access. Phoenix, for example, may have one of the lowest ratios of jobs downtown of all major American metros, but it also has one of the strongest and most consistent buildups of density toward its city center. But to whom the unique geography and infrastructure of America’s historic downtowns may hold the most value in the future is still uncertain. The results of the last census, however, tell us there is every reason to believe downtown’s future as a humbler residential district typology may have only just begun. 

 

 

 

 

 

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February 7, 2019

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