BELLINGHAM, WA (MyBellinghamNow.com) – City leaders are attempting to address a worrying trend in downtown Bellingham.

According to a new report, about 10% of downtown’s ground floor space was vacant as of October 2025.

The city’s Planning and Community Development Department, which compiled the report, noted that 5-10% is considered “healthy and balanced.” But the vacancy rate jumped to nearly 15% in the pedestrian core, which is downtown’s main retail area.

The report singled out the Magnolia and Cornwall intersection along with the whole Cornwall Avenue corridor as underused areas.

It also found that nearly half of the vacant properties downtown will likely return to active use in the near future.

To address the vacancies, the city is exploring offering more incentives for small businesses and establishing a vacancy tax, among other recommendations.

The city council will consider the report’s suggestions and discuss possible next steps at a future meeting.