San Diego Attracting Millennials Downtown, Plans To Launch On-Demand Transportation Service

A new study of Downtown San Diego gives insight into what locals want in their Downtown and what it takes to attract Millennial talent and grow Downtown's innovation economy. Attendees at our third annual Evolution of Downtown San Diego heard about the study and its implications for future growth.

Downtown San Diego Partnership president/CEO Kris Michell (above) and UCSD Downtown Extension associate dean Mary Walshok, who conducted a demographic study of Downtown SD, presented the results at the event. Kris noted the study combined information from 38 town hall meetings with Downtown data from a regional study by the San Diego Foundation and aggregated into a “to do list.” Kris noted Millennials are the largest group by far nationally, and seven out of 10 of will live in an urban environment by 2050.

“This is the first time in 100 years that urban growth is outpacing suburban growth, according to the US Census,” she added. Kris said Downtown's four square miles has a population of about 35,000, as well as 25,000 housing units, about 130,000 jobs and 110 startups. The median income per capita Downtown is $73k, while the per capita income countywide is $59k. Additionally, 51% of the Downtown population has a four-year college degree or greater, while 34% of the county's population has a four-year college education.

Downtown is dominated by 30-somethings in their greatest spending years, Kris said. By 2020, 50% of the Downtown workforce will be Millennials. “Millennials are the future, and we need to create a Downtown that attracts them, “ she emphasized.

On that note, Kris announced Downtown SD Partnership and Civic San Diego are launching an on-demand transportation system in July, which will operate similar to Uber and take Downtown residents “to and from” for free. She said this service will be funded with advertising and subsidized by the parking district. It is expected to operate 60 electric vehicles when fully operational in three years.

Mary (above) followed with four points that indicate San Diego is poised to grow an innovation economy. “First, talent drives regional prosperity, and young people today move where they want to live, then find a job,” she said, noting San Diego is among the top three Millennial markets. A San Diego Economic Development Corp study found 72,000 young adults moved into the region in 2014. “They didn’t have jobs then, but they do now,” Mary said. “This is a stunning number,” she added, pointing out only 35,000 young people moved to Stockholm, a city attractive to Millennials for its historic architecture, during the same period.

Mary said, “Software is eating the world, and Millennials are the chefs. Globally, big data, data mining, science, computer apps, health, cyber security, the arts, and the environment are dominating the new and emerging companies—that’s the innovation frontier. And if Millennials are building those platforms…and they want to live Downtown, you’re going to grow an innovation cluster, with lots of companies. That is, if you don’t just build residential, because there’s got to be space for people like this to work, as well as play and live.

Pictured below is The Hub at IDEA1, a courtyard gathering and event space that connects this mixed-use project's other components. The first project in the East Village I.D.E.A. District, positioned as the city's tech hub, IDEA1 will serve as a catalyst and model for future development.

Downtown is already a startup and innovation hot spot, Mary added. While there are only 110 startups in Downtown now, that’s double the number a year ago. “If we play our cards right, we will quickly have 300 to 500, with companies clustered around the inner core of the city, but also in contiguous neighborhoods, like Barrio Logan, Golden Hills and The Diamond,” she suggested.

Millennials like working in co-working spaces with like-minded colleagues, she said. “Co-working spaces are incubators of ideas, and they will continue to grow if the city plans in a way that accommodates them,” she said, pointing out there are 22 incubators and accelerators in San Diego, but only six Downtown. “We need more of them in Downtown, and hopefully UCSD will find a path, so we can be a part of growing them.”

Mary also noted Downtown has a lot of the amenities that attract Millennials, offering a very walkable environment and is the epicenter of arts and culture, with Balboa Park and Theater District just up the hill and another theater district in the Gaslamp Quarter. Additionally, there are numerous restaurants and close to 100 bars and breweries, she said.

Pictured above is Downtown resident Sarah Czarnecki using the map at a Little Italy kiosk, which is part of a new Downtown wayfinding system designed to help pedestrians and cyclists find their way around.

Pictured is The Rey, a new 478-unit residential tower by Wood Partners in Downtown's Cortez Hill, which features a flexible lobby space that serves as co-working space by day and event space in the evenings.

“You can still have the California Dream in San Diego,” Mary said. As a tech hub, San Diego is third behind LA and San Francisco, “but could pull ahead if we marketed our comparative advantages,” she said. Calling SD’s $2,261 average apartment rent “an obscene amount,” she noted it’s a bargain compared to Santa Monica and S.F. rents. Likewise, asking rent for office space in Downtown SD is $30.48/SF, compared to $89.50/SF (according to JLL) in Downtown S.F. and $61.63/SF (according to CBRE) in the Santa Monica/Venice area.

“We need to plan and build a Downtown that ensures we attract Millennials and companies that have a value-add bonus for our economy," Mary concluded. “We have an opportunity to reinvent our city as a magnet for the young, the edgy, the inventive—and it’s just a matter of time and will.”