Downtown Vitality Index: Who is winning the Covid-19 comeback?

It's been three years since Covid-19 dealt a crippling blow to downtowns around the nation.

For most downtowns, the rebound remains a work in progress, but some are better positioned for success than others, according to a new analysis by The Business Journals.

Our inaugural Downtown Vitality Index shows how large city centers across the nation compare in a variety of metrics that can affect the health of a downtown — from migration and commuting patterns to commercial real estate and public transit data. We compared more than 40 large metro areas across the nation.

At the top of the list? Tampa, Florida. The metro, which is buoyed by a diverse economy, a burgeoning innovation ecosystem and strong in-migration, separated itself from the pack by ranking in the top half of each of the six metrics we tracked. Nashville, which also finished in the top 10 of our overall Downtown Vitality Index, was the only other major metro to accomplish that feat.

But unlike some other Covid-19 growth metrics, the Sunbelt didn’t completely dominate the top of the rankings.

Albany, New York, wasn’t far behind Tampa, with a Downtown Vitality Index Score of 87.5 Buffalo, New York; Cleveland, Ohio; and Wichita, Kansas; also landed in the top 10.

Richard Florida, an urbanist, historian and bestselling author who has analyzed cities around the globe, said the longtime trend of migration to a region’s metros has spawned several challenges that will shape the coming years — particularly when it comes to the cost of housing. 

In the post-Covid-19 world, Florida said growing unaffordability issues will dampen the Sunbelt’s migration momentum. 

“The era of these Covid-related relocations is over,” he said. “Prices have gotten so expensive in these Covid boom towns … We’re hearing people say, ‘Maybe I have to go back north.’”

Florida said that could create opportunities for places like Pittsburgh, Detroit and Cleveland. 

“You’re beginning to see people think about the Midwest in ways we’ve never thought about before,” he said. 

Expensive coastal metros like New York and San Francisco were among with the lowest overall scores, but Portland, Oregon, and Minneapolis also landed near the bottom. Their rankings were generally weighed down by high office space vacancies and their downtown migration trends.

One big takeaway from the exercise? Few downtowns or central business districts can claim a strong, across-the-board recovery from Covid-19. Almost everyone has work to do to secure their future.

“There's going to be pain in this process. The reason I think I'm optimistic is because it's dawning on people that it isn't going to go back to the old way,” Florida said. “It's finally dawning on people that we're going to have to change the way our downtowns operate. We're going to have to make them better neighborhoods, better communities, not just office tower districts.”

Florida said making that transformation will require cities to think about a host of things, from transit and office spaces to commuting patterns and more.

The data that powered our Downtown Vitality Index shows how different metros and their downtowns stack up in many of those areas.

Here’s a look at each metric and which large metros led the way:

Commuting trends

What we looked at: This metric took into account the percentage of individuals working from home and the percentage of individuals with hour-plus commute times.

The takeaway: Metros with a high concentration of tech talent and long commutes often embraced remote work at a higher rate their less tech-centric peer metros — a trend that also showed up in our look at office space and downtown migration patterns. Nationally, employers are now calling workers back to the office, but some metros are starting from a much higher percentage of remote workers than others.

Urban hotel occupancy

What we looked at: Using data from STR, we looked at occupancy rates for urban hotels, as well as how occupancy rates have rebounded since 2019. 

The takeaway: Getting back to 2019 levels for urban hotel occupancy has proven to be a challenge. One big factor? It’s been leisure travel powering the travel industry’s comeback. Business travel did start to gain steam after a slow start to the pandemic rebound, but economic uncertainty threatens to derail some of that momentum as companies look for ways to cut costs.

Transit ridership

What we looked at: Using U.S. Department of Transportation data, we looked at change in transit ridership by metro between 2019 and 2022.

The takeaway: Transit ridership was already trending downward before the pandemic, which just added fuel to the fire. The bulk of major metros still find transit ridership down by 30% or more, with hybrid arrangements and the rise of remote work among the chief factors. Experts say the future of transit is likely to come down to whether systems can reinvent themselves to succeed in a world not defined by the daily commute.

 Office space occupancy/absorption

 What we looked at: We analyzed central business district vacancy and absorption rate data from JLL and CoStar Inc.

The takeaway: We're in the midst of a pivotal time for the office real estate market as companies ponder their next moves. Some tenants are indeed cutting back on their square footage due to their embrace of hybrid work, but others are taking a more wait-and-see approach. In our analysis, two types of metros stood out. The first was metros like Tampa, Miami and Orlando — growth markets that have been able to absorb a significant amount of office space despite the headwinds. The second was steady markets like Albany and Albuquerque that may been able to hold vacancy rates at a low level.

 Downtown migration trends

 What we looked at: We analyzed change-of-address data from the U.S. Postal Service between 2019 and 2022 for businesses and overall changes. 

The takeaway: Not surprisingly, the Sunbelt shone in this metric. The region has long been a powerhouse on the migration front, and that helped metros like Phoenix, Houston and Atlanta rank near the top. Jacksonville, Florida, actually topped the list — thanks in large part to a headquarters move by FIS.

 Airport traffic trends

 What we looked at: Using data from Cirium Inc., we compared changes in flight totals from 2019 to 2022.

The takeaway: Not surprisingly, destinations that draw a mix of business and leisure travel fared the best in our analysis. Those included places like Miami; Nashville, Tennessee; Washington, D.C., and Orlando, Florida. Austin was the star performer in this metric, thanks to airlines ramping up their presence in the fast-growing metro.