October 11, 2023
More than 3 1/2 years since the COVID-19 pandemic shut down cities across the globe, Philadelphia's downtown is making an especially healthy recovery – and, by at least one measure, is rebounding more quickly than Boston and New York.
From April through June, Center City's daily foot traffic was at 84% of what it was during the same time frame in 2019. That ranks fifth among 26 major downtown areas studied in a new report released by the Center City District, an organization aimed at supporting economic prosperity and vitality in Philadelphia's downtown.
By this measure, Center City's recovery was outpaced only by Memphis, San Diego, San Jose and Nashville. The downtown areas of other East Coast cities, including Midtown Manhattan, Lower Manhattan and Washington, have been slower to rebound.
The data-packed, 56-page report analyzes various metrics of downtown vitality – such as downtown foot traffic from outside visitors, residents and office workers in each city, according to cell phone location data captured by Placer.ai – and compares trends between 2023 with data from the same period in 2019 to see how each downtown area is faring in its post-pandemic return.
Center City owes much of its rebound to the relatively high population of people who both live and work there. According to the CCD report, about 30% of people who work in Center City live within 2 miles of their workplaces, the highest rate in the nation. Not surprisingly, a large majority – about 84% – of these workers have returned to working in their offices after the pandemic forced businesses to adopt remote, and then increasingly hybrid work models for their employees.
In the long run, Center City's growth may benefit from development trends that are shifting toward more residential construction. According to Axios, Philadelphia is expected to lead the growing national trend of converting buildings into apartments and other residential spaces – quite possibly starting with a large office-to-residential real estate development project at 17th and Market streets. And if approved, the 76ers' proposed arena vows to bring a 395-unit residential high rise to East Market Street in the coming years.
Any additional growth in Center City's population can only be a good thing for the its overall fortunes – especially as the fate of downtown office spaces remains uncertain.
The post-pandemic shift toward alternative work models has proven to be a hurdle for urban centers, including Center City, as they strive for a full comeback. Nationwide, about 12% of full-time employees are still working remotely and another 28% are working a hybrid schedule, according to Forbes. This sluggish return to the office is certainly felt in Philadelphia, where office vacancy rates still hover around 50% more than two years after the city lifted the last of its COVID-era restrictions.
As the CCD report illustrates, office workers from outside the city have been slower to return to Center City than other groups of people. Nonresident workers currently make up about 27% of downtown foot traffic, a five-point decrease from 2019.
As the return of Center City office workers stalls, tourism and retail activity are largely picking up the slack in fueling Philly's downtown recovery. In the first quarter of 2023, taxable retail sales in Center City were about 97% of what they were in 2019, according to another CCD report released in June. Bars and restaurants saw their taxable sales return to 95% their pre-COVID levels.
While a sizable residential population has helped fuel Center City's rebound, tourism remains an arguably even more crucial piece of the puzzle. Of all the people who frequent Center City, outside visitors make up the largest share of its foot traffic, according to the CCD report.