By Mason Wong
Downey’s economy is showing signs of both steady growth and structural challenges that will shape the city’s business climate for years to come. From retail and development demand to rising cost pressures, entrepreneurs and local government are adapting to a landscape that rewards long-term strategy more than flash.
Retail, Housing, and Land Use — What’s in Demand
A recently released market study forecasts that through 2045, Downey will need approximately 858,649 square feet of new retail space alongside nearly 2,950 new housing units to meet projected demand.
These projections form a key part of the city’s first comprehensive General Plan update in over two decades.
This reflects strong potential for expansion in commercial corridors and supports mixed-use development as a growing focus.
Major Developments That Could Change the Game
One of the most-watched projects is the planned Costco warehouse and gas station along Firestone Boulevard. Approved by the Downey City Council through a Master Development Funding Agreement in June 2026, this project represents potential for new retail options, jobs, and city revenue—but is still awaiting environmental review, permit approvals, and construction.
Jobs, Income, and Consumer Patterns
Despite moderating growth statewide, Downey has seen improvements on several economic indicators. As of July 2026, the city’s unemployment rate is approximately 4.9%, down by nearly a point from a year earlier, outperforming many similar-sized cities. But at the same time, rising housing and borrowing costs are putting pressure on households.
Median household income in Downey sits around $92,600—a figure that’s strong locally, though still slightly below some surrounding regional benchmarks. Per capita income is nearly $37,300, reflecting a diverse workforce and economy.
Opportunities and Headwinds for Local Entrepreneurs
For business owners and entrepreneurs, several trends suggest opportunity. Downtown continues to draw attention—as new food concepts emerge and retail spaces fill. A good example is Aria’s Table, which is set to open in a storefront formerly occupied by Bastards Canteen. The restaurant plans to serve breakfast, lunch, and dinner, mixing Mexican-American and Mediterranean-inspired dishes.
However, these opportunities are counterbalanced by cost pressures. Rent in Downey is rising—typical asking rents increased around 3% year-over-year as of August 2026. Housing cost burdens remain high, especially for lower-income residents juggling increasing expenses in housing, utilities, and other essentials.
What City Policy is Doing
The City of Downey is actively engaging with its economic trajectory. Its FY 2026-2027 budget includes initiatives focused on business retention and encouraging new investment, especially in under-utilized areas. The recent market study is feeding into the general plan as a roadmap for both public and private sector decisions.
The involvement of local government in facilitating major deals, such as the Costco project, shows a willingness to use fiscal agreements, zoning flexibility, and strategic partnerships to shape development. For entrepreneurs, this means certain corridors might benefit from policy support when their project aligns with city-wide goals.
What to Watch Next
- Final entitlements and construction timeline for the Costco development along Firestone Boulevard—when permits are approved, the impacts on jobs and traffic will become clearer.
- How many of the projected 2,950 housing units are built, and where—this will affect retail catchment, local labor supply, and consumer spending patterns.
- Consumer behavior in sectors sensitive to inflation—restaurants, retail, auto sales—as income gains may be offset by elevated living costs.
- Policy actions that help small businesses manage rent and permit burdens, especially in the downtown and Promenade areas where commercial space is in flux.
For local business owners, investors, and residents, the outlook is mixed: opportunities are real, especially in retail, development, and hospitality—but navigating cost pressures will be essential. Downey’s economy seems ready for growth, provided that city policy, infrastructure, and private investment stay aligned for the long haul.