Downtowns Are Lifeless. It’s a Once-in-a-Generation Chance to Revive Them.

From The Washington Post Editorial Board:

As mayors from around the country gathered in D.C. this week, they were eager to trade ideas on a problem facing almost every city in the nation: dead downtowns. Tourists are back, but office workers are still missing in action amid the tall glass buildings that dominate so many American downtowns. Their restaurants, coffee hangouts, stores and transit systems cannot sustain themselves without more people in center cities.

It’s clear that it is no longer fears of the coronavirus holding workers back from returning. The nation is in the midst of one of the biggest workforce shifts in generations: Many now have experienced what it is like to work from home and have discovered they prefer it. At a minimum, they want a “hybrid” situation of working two or three days remotely. Cities must adapt to this new reality or risk a downward spiral of falling commercial property values, lower taxes on those buildings and ghost downtowns that could lead to increased crime and homelessness.

Two solutions are obvious: Get more workers back in the office and convert commercial offices to apartments and entertainment venues. But achieving this — especially in an era of higher mortgage rates — requires strong leadership and a great deal of creativity. This is a once-in-a-generation opportunity to reshape downtowns for the future. It should be a top priority of mayors and city councils around the country. The goal is a “24/7” downtown with ample work spaces, apartments, parks and entertainment venues that draw people in during the day and have a core of residents who keep the area vibrant after commuters go home.

As Atlanta Mayor Andre Dickens (D) told the Post Editorial Board: “The pandemic really accelerated the need for this and almost mandates the need for revitalization of downtown.”

The encouraging news is that workers are starting to make their way back to the office, especially on Tuesdays and Wednesdays. January has seen the highest in-office days so far in Austin, Houston, Chicago, D.C., Los Angeles and Philadelphia since the pandemic began, according to Kastle Systems, which tracks security-badge swipes for more than 40,000 organizations. New York and San Francisco had their best in-office days in early December. All of this suggests workers are willing to come in at least a few days a week and more would do so if companies and local, state and federal governments required it. President Biden could help cities immensely by enforcing his vow in March that “the vast majority of federal workers will once again work in person.”

But the data also tells another story: Office use isn’t going back to pre-pandemic levels. Even Texas cities that did not shut down during the worst of the pandemic are 20 to 30 percent below 2019 office occupancy. New York, Los Angeles and D.C. are still down more than 40 percent. This a classic oversupply problem. Cities have too much office space, especially in the older buildings that companies are fleeing as they seek out new construction with more light and flexible space.

Mayors and city lawmakers have reason to be bold in seizing this opportunity. There’s growing interest among developers and investors who want to be a part of the office-to-apartment revolution. They are already eyeing the easiest buildings to convert: The ones with elevators in the middle, windows and light on all sides, and the right length and width. The challenge for city leaders is to generate interest in the buildings that are “maybe” candidates for conversion.

There’s no playbook that will work for every city. Boston doesn’t have a lot of room left to expand outward, whereas many Southwest cities still do. D.C., unlike most other cities, has restrictions on how high buildings can go. But smart leaders are starting to embrace some big ideas:

Set a clear goal for new residents downtown: D.C. Mayor Muriel E. Bowser (D) wants 15,000 new residents downtown in the next five years, an ambitious aim that helps focus attention on the scale of necessary change. Atlanta Mayor Dickens has set a target of 20,000 affordable housing units by 2030.

Speed up permitting, rezoning and easing of restrictions. The goal should be to jump-start progress as soon as possible. Stamford, Conn., has rezoned land around its big train station as Mayor Caroline Simmons (D) looks to encourage more residential buildings there. Austin Mayor Kirk Watson (D) would like to set minimum height levels instead of maximum ones to encourage taller apartments and mixed-used buildings along the city’s burgeoning “Project Connect Office” transit expansion. It tends to be easier to include a significant number of affordable units in taller buildings, too. And some cities are considering whether to waive the requirement that all bedrooms have windows. Meanwhile, Phoenix Mayor Kate Gallego (D) has been partnering with the private sector to use converted shipping containers to quickly build housing and other venues. Phoenix now has the tallest shipping container building in the nation. It sits on a former parking lot.

Look for creative ways to finance big projects. City leaders have traditionally turned to tax breaks to spur investment. That will be key again, but it’s time to get creative. Fort Worth sold its central library branch for $18 million to generate funds while also requiring prospective buyers to invest at least $100 million into the property and redevelop it as a mixed-use project with office and residential space. Chicago is utilizing a competitive bidding process in which developers pitch their buildings on LaSalle Street as prime candidates for attractive financing. Mr. Dickens had Atlanta purchase one of the tallest buildings downtown — 2 Peachtree Street — for $39 million and plans to use it for a mix of retail, affordable housing and market-rate apartments. Not every city has those kind of funds, but most are still flush with federal stimulus money. As Lincoln, Neb., Mayor Leirion Gaylor Baird (D) put it, “We’re trying to use one-time dollars to have enduring impact.” Her city is looking at more office-to-housing conversions as well as building a new convention center.

Think beyond housing. This is a moment to prepare cities for the next half-century. That means building new streetlights, public transit, parks, bike lanes and recreational spaces alongside more apartments. Seattle Mayor Bruce Harrell (D) envisions “coffee corners” with small stages for public performances and gatherings. Waterloo, Iowa, Mayor Quentin Hart is about to launch a spectacular light show in his city and is working on plans for a white water rafting course on its river. Burlington, Vt., Mayor Miro Weinberger (D) is transforming Main Street by adding a “tree belt” park on both sides of the street, along with bike lanes. Many cities are also turning dilapidated malls into food halls. These projects redefine what makes a city unique for its residents — and visitors.

There’s a financial urgency to get transformation underway quickly. In many cities, such as D.C., commercial office vacancies are 15 percent or higher, according to CoStar, a provider of commercial real estate data. That’s starting to resemble a fire sale scenario in which rents and property values drop rapidly. America’s cities are ripe for new skylines and fresh streetscapes. The best leaders will get going soon.

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