Downtown Long Beach in Long Beach Thursday, October 1, 2020. Photo by Thomas R. Cordova.

Downtown Long Beach continues to expand as it bounces back from the COVID-19 pandemic.

The area saw a solid improvement to its housing stock and added a variety of new businesses—particularly restaurants, personal services, and general retail—but lingering effects of the COVID-19 pandemic have led to an uncertain outlook from Downtown business owners on the overall economic future of the city, state, and country.

In its 2022 Economic Profile, released Wednesday, the Downtown Long Beach Alliance highlighted the development of 586 new housing units in the Downtown area as a major accomplishment last year. The total represents a more than 42% increase from 2020. There are also over 1,500 units currently in planning or under construction in the area.

The 271-unit Volta on Pine and the 315-unit Shoreline Gateway were the only additions to the Downtown housing market in 2021, but the DLBA anticipates the completion of several projects that will increase Downtown Long Beach’s housing stock by over 700 units in 2022.

Specific projects the DLBA is expecting to be completed this year include the 495 Promenade project—formerly known first as The Place at The Streets and then as the 5Nº development—that will add 20 more housing units, a 142-unit project at Magnolia and Broadway and 18 more units in a development at 437 E. Fifth St.

Businesses also continued to make their way to the area, as Downtown welcomed 185 new businesses since the start of 2021.

While this is down from the 222 new businesses in 2020, a third of the businesses added were restaurants, retail stores, or personal care services. This is important, according to the DLBA, because of the profound effect that the pandemic had and continues to have on these sectors in particular.

Gross retail from these areas through the first three quarters of last year totaled $466 million, a sign of improvement compared to the $459 million in all of 2020, but still significantly below the $713 million in all of 2019.

“The ground floor retail market, which includes food service and personal care businesses, was perhaps the most impacted market sector as result of COVID-19-related public health restrictions,” the report reads.

Downtown Long Beach was significantly impacted by this, as 48% of businesses in the area fall under these categories. Restaurants make up at least 30% of the total ground floor tenants and are the largest business demographic in five of the six neighborhoods in the downtown area. Only North Pine does not meet either of these conditions, as just 26% of its ground floor tenants are restaurants, compared to 33% of tenants focusing on personal services.

While businesses are still slowly recovering, optimism for the future is still high—but it’s waning. According to the report, 53% of business owners surveyed by the DLBA say they have plans to expand over the next year, but uncertainty still remains for the bigger picture.

In 2020, 77% of business owners surveyed believed that Long Beach’s economy was poised to expand over the next year, but that number has dropped to 58% in this year’s survey. Similar outlooks are shared regarding the outlook for the California and U.S. economies, with the number of people believing the economy in California and the United States will grow dropping from 61% to 49% and 59% to 51% from 2020 to 2022, respectively.

“Restrictions reduced foot traffic,” the report read, “and an overall reduction in consumer spending generated a fair amount of economic uncertainty.”

Find the full report on the DLBA’s website.

Christian May-Suzuki

Christian May-Suzuki is a reporter at the Long Beach Business Journal.