Study finds value in downtown, center cities investment

Cities and regions have the potential to leverage profound lasting benefits through investment in downtowns and center cities, according to “The Value of U.S. Downtowns and Center Cities” report released by the International Downtown Association (IDA). From driving tax revenue and business activity to spurring smart development and innovative workplaces, downtowns play a pivotal role in the long-term health of a region.

The report is the result of an eight-month study by IDA, in partnership with Stantec’s Urban Places team, an interdisciplinary hub joining the global firm’s urban experts, and 13 downtown place management organization members across the U.S. to create a replicable, accessible, and standard methodology to calculate the value of downtowns. The resulting report articulates the mutual benefits of downtown investment to a broad range of relevant stakeholders. This research clearly shows the importance a downtown has on its city and region, thus demonstrating its unique return on investment to help advise future decision making and to increase support from local decision makers.

The Value of U.S. Downtowns and Center Cities is informed by experts and downtown leaders from around the country, encompassing over 100 key data points, 33 guiding benefits, and five principles (economy, inclusion, vibrancy, identity, and resilience). The project examined 13 American downtowns and center cities and was modeled after the award-winning project, “The Value of Investing in Canadian Downtowns” (2013).

“This project is the most significant body of research IDA has ever produced. It is its first quantifiable study of downtown performance and its release marks the beginning of our new research division,” said David Downey, president/CEO of IDA. “I couldn’t be more pleased with the third-party evaluation we have delivered to our 13 member organizations and the new standard IDA has established for the urban place management industry.”

The initial downtown pilot group underscores the powerful impact of these downtowns far beyond their limited physical footprint with a city.

Among its key findings:

• Downtowns average just 3% of citywide land, but account for 31% of citywide tax revenue. This means for every 1% of citywide land, downtowns contribute approximately 10% of citywide tax revenue.
• Despite the uncertain future of retail, downtown retail is still a significant presence — averaging 16% of citywide retail sales and retail offerings. On average, downtowns generate nine times more retail sales than their citywide counterparts.
• Downtowns continue to serve as major employment centers, accounting for 30% of citywide jobs and 40% of citywide office space. They are also adapting to workplace trends, containing 60% of citywide co-working space, 39% of citywide creative jobs, and 31% of citywide knowledge jobs.
• Residents aren’t just moving to cities — they are moving to downtowns. Downtown residential is increasing much faster than the rest of the city (38% compared to 5%). Downtowns also saw a 27% increase in residential housing units from 2010-2015, compared to the city’s average of 6%.
• Downtowns are multimodal hubs. Downtowns consistently had higher Walk Scores, Bike Scores and Transit Scores than their greater cities (85-90 compared to 52-57), had higher rates of non-single-occupancy vehicle (SOV) commuters (43% compared to citywide 28%).

The research in this study will empower local leaders to work with the public and private sectors at multiple levels to encourage investment, and support the continued evolution of downtown. Investing in a strong downtown is crucial for a successful city and region.

“This report, and all the great data that underlies it, helps to quantify what we’ve known for decades — that a vibrant downtown disproportionately supports the success of any great city. In terms of economic, social, and cultural vitality, downtowns punch orders of magnitude above their weight,” said Craig Lewis, principal of Stantec's Urban Places. “Our team is proud to have contributed to this piece of vital research. We look forward to our continuing partnership with the International Downtown Association to help downtowns and business districts — especially IDA members — tell the full story of their importance to city and regional economic performance.”

This year, the partnership between IDA and Stantec’s Urban Places will build and expand upon current research related to successful urban revitalization programs and apply the data toward the development of the first Downtown Vitality Index. This annual index will score urban districts and center cities on key economic, social, and environmental factors of downtown vitality using these new data standards and methodology. This novel tool will standardize the value assigned to a downtown as a place for a range of stakeholders; create a useful set of tools for replicable, data-driven measurement; and define a baseline for progress assessment and peer comparison.