Downtown Los Angeles is bustling with new residents. Not so much with office workers, though.

  • Los Angeles' downtown has become a hot spot for residential growth in the city.

  • The neighborhood's office market, however, continues to languish.

  • Downtown LA is expected to be a major draw for residential living over the next few decades.

For generations, downtown Los Angeles was the region's nexus of commerce, as vast office spaces and old-line department stores made the neighborhood a business powerhouse.

But urban decay and suburbanization, which accelerated after World War II, made downtown into more of a 9-to-5 office hub. For decades, the city core was a destination for work but not much else.

That all changed after 2000 when there was sustained residential growth in downtown Los Angeles. And since the height of the COVID-19 pandemic, that growth has only strengthened. The neighborhood is now a major draw for residential development.

According to the DTLA Alliance, a coalition of more than 2,000 central business district property owners, there are nearly 100,000 residents living downtown in new developments like the 41-floor Figueroa Eight apartment building or the numerous historic buildings that have been restored in the area.

It's created one of the country's most unique downtown living dynamics: Most downtown residents don't work in the neighborhood, The Los Angeles Times reported.

While the neighborhood benefits from its Union Station transit hub and is home to Los Angeles City Hall, it has — like other cities — seen an exodus of businesses as work-from-home policies put into place during the pandemic caused many companies to either relocate to smaller spaces, cut the amount of office space that they needed downtown, or abandon their office footprints altogether.

The real estate services firm CBRE recently reported that only about two-thirds (65%) of office space in downtown Los Angeles was occupied in the first quarter of 2024, according to the Times.

Despite the office emigration, living in downtown LA has become so desirable that Jessica Lall, the head of CBRE's downtown Los Angeles office, told the Times a plan endorsed by the city would allow the neighborhood to absorb 20 percent of the projected housing growth for the entire city through 2040, a significant figure in a city starved for affordable housing and a state where there's been an exodus of residents due to high housing costs.

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