Hope emerges that downtown San Jose economic rebound is underway

“We are actually fully recovered when it comes to visitors from outside of the downtown, other parts of the Bay Area, or even outside the Bay Area,” Stettinski said. “Where we are not fully recovered is activity from people who are working in downtown San Jose.”

Office worker levels are at around 40% of what they were prior to the coronavirus outbreak in March 2020, the first month of the business lockdowns, according to Stettinski.

“Evenings, nightlife, weekends, we are absolutely rocking and rolling,” Stettinski said. “We are really ahead of the game in some ways. But when it comes to back to the office, we are lagging. We’re not there yet. But there has been so much miscommunication and miscalculation about what is going on.”

The researchers surveyed eight downtown districts in California, including downtown Oakland and downtown San Francisco. Downtown Oakland was at 74% of its pre-COVID visits, as measured by mobile device activity, while downtown San Francisco was only at 67% of its pre-coronavirus visits.

Some experts warn that political and business leaders may have to scramble to ensure their downtown districts can avoid the sort of “doom loop” scenario that appears to be hitting San Francisco.

A “doom-loop” is a cycle that began with the business shutdowns that chased away office workers who began doing their jobs from home or other remote locations, keeping downtown San Francisco nearly empty, which then caused businesses to struggle and eventually close. The widening departures of shops, restaurants and nightclubs make San Francisco even less appealing.

Still, researchers also point out that downtown districts have faced other such events in the past and survived.

“As we experience yet another rhetorical onslaught predicting the decline of cities and their downtowns, it is important to remember that cities have faced their share of crises before,” Brookings Institution researchers Tracey Hadden Loh and Hannah Love wrote in a March 2023 report entitled “Breaking the Urban Doom Loop.”

The Brookings researchers noted that American downtown districts have survived a string of seemingly fatal calamities such as suburbanization, white flight, rising crime in urban centers during the 1990s, and New York City’s crisis in the wake of the 9/11 terrorist attacks.

“As the heart of our nation’s economy, downtowns have the unique potential and imperative to act boldly and inclusively to rebuild stronger than before,” the Brookings researchers wrote in the conclusion to their report.

For San Jose, Mahan is calling on city residents, business leaders and local government officials to embrace a “back to basics” approach that focuses on addressing the South Bay city’s crime, homelessness, blight and economic vibrancy challenges.

“It is this commitment to keeping our neighbors safe, ending street homelessness, and cleaning up our city that has allowed us to bounce back faster than any other city in the state,” Mahan said.