commercial vs. residential

Four level of zonings are:

1. Agricultural 2. Residential, 3. Commercial, 4. Industrial.

Higher level zoned land (e.g. industrial land ) can be used for lower level zoning purpose (Commercial building), but a lower level zoned land (Residential land) cannot be used for a higher level zoning purpose (Commercial/Industiral) without zoning modification/exception. 

In your case, downtown land might be zoned for commercial, and they can be used for residential building or residential/commercial mix without zoning change.