The modern downtown must become a mixed-use urban environment—single-use office districts will not survive.
Report: Recalibrating the current single-use nature of the downtown district will require concerted effort, and starting with placemaking activities and programming to attract people to the area can help jump-start the process of creating a 24/7 mixed-use neighborhood. (San Francisco)
For the past 18 months, ULI’s Advisory Services Program has been hard at work in cities across the United States, helping local municipalities re-envision their downtown environments. From St. Louis to Sacramento, Detroit to San Francisco, and in cities in between, civic leaders, urban designers, and real estate developers are wrestling with a future for the downtown that no longer hinges on the traditional 9-to-5 office environments.
Although each of these cities faces challenges unique to its environment, ULI has identified consistent themes across markets, regardless of geography or population size. These themes offer insight into common challenges facing cities throughout the U.S. and suggest viable, sustainable solutions for revitalizing some of the country’s most challenging downtowns.
The following information has been pulled from ULI Advisory Panels conducted in the following seven cities: Chicago, Illinois; Detroit, Michigan; Minneapolis, Minnesota; Pittsburgh, Pennsylvania; Sacramento, California; San Francisco, California; and St. Louis, Missouri. Each of these studies revealed that the era of the single-use district is over. Central business districts are no longer viable as such, and drawing multiple uses into the downtown core is required.
Diversity, in all forms, must be actively encouraged, invited, promoted, and even required. This diversity will help ensure that downtown will survive when the next economic shift occurs, when the next generation wants to move to the suburbs, when teens are looking for something to do, when seniors wish to stroll through parks, and when a new business owner is looking for her first storefront.
It starts with a vision
What do you want to be when you grow up? Children are regularly asked this question. City leaders and real estate professionals should be asking this same question of their downtowns. Great cities have a brand that everyone can articulate. It is authentic to the city and resonates with residents and visitors alike. Nashville is Music City and Austin is still weird. This type of visioning and branding is often best achieved under the leadership of a centralized organization, such as a community improvement district (CID), community development district (CDD), or other downtown-focused body. It can become the driving force behind marketing and branding efforts that point to the vision, activities, and programming that bring people to downtown.
Report: Near-term efforts could include shareable marketing strategies, targeted programming, and increasing retail density with experiential and anchor retailers. (Detroit)
It takes (an) organization
In addition to the visioning and branding work, a CDD or CID can serve as the central point of contact for all things related to downtown—events, business, development, and residential life. It becomes clear who to turn to with questions or ideas about downtown. It also becomes clear who can lead efforts when change is in order.
Report: A centralized and highly transparent system of access makes it easier for a diverse public to navigate the business and cultural opportunities, further supporting community wealth building, equitable economic development, and community resilience. (St. Louis)
A central downtown organization can also play a key role in the real estate landscape. With the power to purchase buildings and assemble land, downtown organizations can identify a building’s becoming a problem before the market recognizes the issue. They may also better understand the types of land or building assembly needs that businesses may have as they look to locate downtown—and can make moves to help with those efforts.
“A big piece is leadership: organizations that exist to support and focus on downtown and are well positioned both to advocate for downtown as a policy priority and to implement those policies. This requires distinct capacities that not every central business district has.”
In one study in particular, the ULI panel recommended that the downtown entity use its purchasing power, or the power of its booster relationships, to identify buildings that could prove pivotal to success and move on them now. The goal would be to put an otherwise empty building back into circulation by inviting creatives and makers from other parts of the city to occupy the new downtown spaces instead.
Furthermore, the equity and ownership structure of the building would be built in a manner that provides an equity stake for these new tenants, allowing them to benefit in the increase in the value of the real estate asset. This approach could be of particular interest for downtowns seeking an infusion of business owners, creatives, and makers who are Black, Indigenous, or people of color.
Report: Public-private partnerships are needed to spur redevelopment, and, with more office buildings soon entering the market, now is the time to get creative and align resources in order to facilitate more vacant building conversions. (Detroit)
What is this place?
If downtown is no longer the city’s central business district, what is it? Redefining downtown through bold visioning should be supported by placemaking. It should be creative—inviting art, experience, and even whimsy into spaces. People should see, feel, and explore spaces in ways they might not have done when downtown was full of office workers.
Report: Designing and curating spaces for enjoyment by the widest range of visitors and residents are important. Diversity of space can lead to diversity of visitors, helping all see that they are not only welcome but are also encouraged to enjoy the space. (Detroit)
Downtown alleys—often service areas or leftover spaces—can provide welcome breaks from the often overwhelming scale of downtown buildings. Temporary string lights, movable furniture, and music can completely transform an overlooked corner of the city into the next hot spot.
“People are asking why we should care about downtown, so we need to give people more reasons to come to the area.”
Placemaking can provide the initial activation that can lead to downtown’s next important anchor. A virtuous cycle of activation to amenity to anchor can provide a valuable testing ground for downtown. Activations can include retail housed in shipping containers or pods, street musicians, farmers markets, or a mural program. When those programs are embraced, the next step in the cycle can occur—a grocery store, a plug-and-play stage, or a digital display on a building’s exterior.
The anchor stage takes full advantage of the visibility and success of the existing activations and creates an asset that is foundational to downtown, such as a destination restaurant, a music industry incubator, or an art museum outpost. Any opportunity to bring a city’s civic amenities to downtown can create a gravitational pull, giving visitors and residents even more reasons to stay.
Report: Clustering civic amenities downtown will also support visitation and use as well as spark additional activation . . . creating a gravitational pull for visitors and facilitating visitation across a number of venues. (Sacramento)
Downtown living
One important element in a shift from a predominantly office-based downtown is the inclusion of more housing. Developers and policymakers are racing together to find ways to more efficiently convert vacant or outdated office buildings into attractive residential towers. Some buildings, particularly turn-of-the-century historic structures with wide columns and massive floorplates, appear to be attractive conversion subjects; however, most would require such massive reconstruction as to make conversion nearly impossible.
“When we talk about downtowns, there is a focus on office workers, but even pre-pandemic, there was a shift toward residential and away from office. The future of downtowns is a shift in the marketplace, and about how to get more people to live in these spaces.”
Even cities with thriving downtowns are vexed by the lack of affordable housing in and around the city center. Many lower-income workers in the downtown service and hospitality industries can’t afford to live near their jobs. Whereas many developers continue to chase the luxury market, cities are working to incentivize more affordable residential products. The diversity of housing products and price points is important to the long-term stability of residential uses downtown.
Recent data suggest significant potential for expanding affordable housing into downtown areas. Deloitte estimates that, by 2030, nearly 14,700 affordable units could be added in central business districts nationwide, assuming 20 percent of the converted square footage is allocated for affordable housing.
Report: In the longer term, more systemic change is required. From improved educational supports to reducing the cost of living, there are a number of other, non–real estate–dependent mechanisms for lifting up populations who struggle to afford housing. The more direct real estate–related reforms include a streamlined and expedited permitting process and mechanisms for using public land for private development. (Detroit)
Life with less office
The office market in every U.S. downtown is different today than it was in 2019, and it is not likely to return to pre-pandemic levels. Although the vitality and commerce that once drove the downtown office market are not completely lost, a different approach is required, and intentional and curated support mechanisms are likely to be needed—yet another important role for a CID, CDD, or other downtown-focused organization. Knowing who is operating downtown, who would be interested in moving downtown, and what resources are lacking or available are all key factors in creating a thriving city center.
Ground-floor activation is an important first step. Many ground- and even second-floor spaces within downtown office buildings were designed to be visible from the sidewalk. Filling these spaces with artisan works, product creations, creative endeavors, and performances can bring life to the streetscape and make the pedestrian experience more enjoyable. These spaces should be filled by makers and creators who are also able to benefit economically from their additions to the downtown streetscape—being paid for their performances or receiving an equity stake in the increase in the value of the building.
Report: That means paying them for the value they bring to spaces and folding in ownership and equity stakes for tenants. (St. Louis)
In a number of the cities studied, retail is doing well in the neighborhoods surrounding downtown. Finding ways to pull those successful businesses into the city center can bring economic activity to once-vacant storefronts. Strengthening the pedestrian, transit, and economic connections between downtown and these surrounding neighborhood retailers is beneficial to both.
Report: Retail attractions, such as experiential or destination retail, an all-season market, and retail locations with pop-up experiences and longer-term leased space can keep residents and visitors coming back. (Detroit)
Entertainment is an important element in the vitality of a city, and downtown can be made a magnet of options. In cases where a downtown has yet to establish a robust residential base, creating a late-night entertainment zone can spark excitement in the city center without fear of disturbing neighbors.
“Cities that have come back most quickly have had economies with a greater focus on entertainment and hospitality. Residential alone will never replace the level of activity that the office generated. Downtowns need food, culture, and entertainment—along with new institutional uses—that give people a reason to come and stay downtown and that become part of the urban fabric, connecting with residents across the city. This has been a constant theme in the ULI ASPs. Downtown must serve everyone.”
Universities can also play a role in the future of a downtown. With a commitment to bring both classes and housing, a university can have a sizable impact on downtown activity day and night, with students patronizing local dining establishments, coffee shops, gyms, and more.
The living laboratory of a downtown environment can also be added to the university’s curriculum, and new graduates may be more likely to find work and remain downtown after graduation. This occurs in Washington, D.C., where, according to JLL, a growing number of national and international campuses have clustered around the White House and Capitol Hill.
ULI observed this trend this past year in Pittsburgh, as well. Its only downtown university, Point Park University (PPU), took a leadership role in the city’s economic growth and resilience strategy. With its unique cultural influence and role in providing downtown housing, PPU is well positioned to be a driver and leader in the future—something confirmed by a ULI ASP that took place in May 2024.
New life for found space
Cities can also benefit from taking a second look at publicly owned or controlled spaces. Public easements, edges of public parks, and other properties can potentially continue as additional open space, or find new life as activity points.
Report: Utility easements, park borders, and other edge spaces can become interesting public spaces, trails, or even viable commercial locations. (Sacramento)
Waterfront land in urban centers can be extremely valuable, yet many U.S. cities still view these waterways for their industrial utility, rather than as recreational assets or valuable park land. Although building along the waterfront may be challenging for environmental reasons, activation and engagement with the waterfront should be pursued. Improved lighting, more visible access points, and more frequent connections can further draw downtown residents, employees, and visitors to the water for recreation and relaxation.
Report: The buildings lining the streets around and connecting to [downtown park space] should become places for testing, refining, and expanding new ideas for activating downtown and enlivening the neighborhood for both residents and visitors from around the city and beyond. Diverse businesses, built into the fabric of such an economy, will prove more resilient over time. (St. Louis)
Public sector leadership and partnerships
Funding support, zoning modifications, and infrastructure improvements, led by the public sector, can have a tremendous impact on the ability of the real estate industry to re-envision and position buildings and spaces for new uses. Tax abatement, tax increment financing, and business incentives can close the funding gap for a new downtown project, or infuse new funding into an existing business that is committed to downtown.
In downtowns where office space predominates, rezoning will be needed to permit residential, mixed, or other creative uses. In some instances, doing so may mean including zoning for entertainment/retail, offering open container permits for festivals and events, expanding hours of operation for bars and entertainment venues, and allowing special events.
Report: Addressing tax reform, modernizing zoning and entitlements, and empowering downtown agencies should help spur additional residential development downtown. (Detroit)
Some U.S. cities are finding success through the creation of a so-called Nighttime Mayor. This executive-level staffer typically operates within the mayor’s office and represents the interests of the businesses operating in the downtown area after 5:00 p.m.
Report: The concept of a nighttime mayor originated in the Netherlands, where Amsterdam appointed its first “nachtburgemeester” in 2014. Since then, the position has gained popularity in cities around the world, including in the United States. The role of a nighttime mayor is to serve as a liaison between nightlife businesses and government agencies and to help develop a city’s nightlife by ensuring safety, fostering cultural vibrancy, and driving economic development during the nighttime hours. The position is not meant to have regulatory or enforcement authority, but rather to serve as a bridge builder between nightlife businesses and government agencies. (Minneapolis)
“We are seeing a different use of space across downtowns and more street and public infrastructure transformations across the board. Also, incorporating a place’s unique culture into the downtown environment to attract workers, residents, and visitors is another current trend. Culture makers have traditionally been excluded from downtown and the opportunity is now there with lower rents and access to ground floor space. It’s time to start seeing these places less as central business and financial districts and more as central social districts and cultural hubs.”
Role of the real estate industry
Many of the buildings that fill our downtowns are ready for their next life. Creativity is needed, and financing mechanisms to support that creativity will be required, as will public policies that flex to support new uses in areas that were once exclusively “commercial.”
The real estate industry is full of creative entrepreneurs, pioneers who can see life in a building where others cannot. Nearly every city can point to at least one pivotal project that was envisioned with a new use, seen to completion by a developer and their team, and subsequently sparked additional investment in the surrounding area. Whereas some real estate developers are highly risk-avoidant—preferring projects with few unknowns—there are many who have taken on monumental challenges and turned hulking shells into thriving hives of life and energy.
“Downtowns provide the geographic opportunity for a high concentration of buildings, activity, workforce, and housing. It’s time to remake downtowns into 24/7 neighborhoods.”
Developers working in such cities as Austin, Nashville, New York, Miami, and Atlanta have seen these principles at work and are finding success. The cities’ diversity of uses, clear public sector leadership, strong housing markets, and evident brands promise to support the real estate investments already made—and continue to inspire new ones—as they rebuild their downtowns for the 21st century.
This article was produced in collaboration by the ULI Communications and Advisory Services teams. Many of these Advisory Services panel projects would not have been possible without ULI’s generous member donors through the ULI Foundation and the Terwilliger Center for Housing.
To learn more about the Advisory Services Program, visit https://americas.uli.org/programs/advisory-services/
You can find most of the reports referenced in this article and more on Knowledge Finder.
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