Downtown Baltimore’s growth showed signs of slowing down last year after strong population, employment and housing increases in recent years.
The Downtown Partnership of Baltimore Inc.’s annual State of Downtown report found that the area slipped slightly in the rankings of the top 25 largest metro areas for population, average household income and the number of households making more than $75,000 annually. But the population of residents living within a mile of the intersection of Pratt and Light streets did increase by 635 people from the previous year.
“The report reflects the steady growth that we’ve been experiencing the last few years in downtown. It’s certainly a positive trend. The report doesn’t reflect explosive growth, but it’s growth nevertheless,” Kirby Fowler, president of Downtown Partnership of Baltimore Inc., said. “Some years we haven’t been able to trumpet such growth so it’s still cause for celebration.”
Despite luring companies such as jewelry retailer Pandora, which is moving its headquarters to the area, office space vacancy rate actually ticked up to 16.8 percent in 2014 from 16.1 percent the previous year. Lease rates for Class A office space remained in the $22-to-$27 per square foot range.
The area also experienced a major slowdown in the number of jobs it added this past year. In 2012, downtown added 10,000 jobs, and it added more than 9,000 jobs in 2013. But last year, downtown employment growth slowed to 1,600 jobs. Still, Baltimore remained the 12th ranked downtown among the nation’s top 25 largest metro areas in terms of overall downtown employment.
Although the population in downtown did grow, the report suggests that a constrained apartment market was a factor in restricting some of that expansion. The occupancy rate for downtown apartments was just under 94 percent at the end of the year, which is down from more than 95 percent at the end of 2013.
Fowler dismissed some of the negative numbers in the report as the result of statistical noise and changes in methodology in establishing certain figures. But he did admit there are challenges to growth in the area, such as a need for more retail options.
“I believe that we still need to turn the corner on attracting commodity retailers to downtown Baltimore. We’ve done a fine job in attracting restaurants and specialty goods retailers, but it is still hard to buy some basic household goods in the core downtown,” Fowler said. “Many of the new residents are coming without cars and have to basically commute to shopping centers in order to do their basic shopping.”
Councilman Eric Costello, who represents the area, said that he hasn’t reviewed the partnership’s report yet, but that he’s happy with the progress being made in the city’s central business district as it tries to transform itself into an area where residents can live, play and not just work.
“There are thousands of residential dwelling units downtown and I think it’s a great thing that we have people living downtown, that not only work there but also live there. I think that’s a positive thing,” Costello said. “I don’t think that downtown should be just office space.”
Michael Runnels, a professor at Loyola University Maryland’s Sellinger School of Business who studies urban development, said he sees patterns in downtown consistent with a national trend of people moving back to the city from suburban areas, and said the partnership has done a great job of attracting interest. But he warned that as downtown grows its backers need to be cognizant of the impact of gentrification in the area, especially with regards to the African American community and cultural markers like Lexington Market.
“Are we revitalizing the land to make it better for other well-moneyed interests, or are we revitalizing the land to make it better for current Baltimore residents, in terms of affordability and in terms of job opportunities?” Runnels asked.