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Like most American cities, Salt Lake is getting bigger and bigger and slightly overrun by chains shops and restaurants. But Salt Lake takes pride in its distinct neighborhoods has, in recent years, even started some festivals to celebrate certain areas.
The aptly-named Capitol Hill area rests north of the Capitol and looks out over the downtown area. To the West, you can get a good view of the Great Salt Lake, and on a clear day, you can see far south down the straight street, State St. One of the older areas of the city, this district is also called "Marmalade District," after its street names; look for architecturally diverse and historic homes here.
East of this area is the Avenues, Salt Lake's first neighborhood that spans all the streets north of South Temple St. from State St. over to the Wasatch mountains. East/west streets are numbered (e.g., 1st Ave., 2nd Ave., etc.) and north/south streets are named after letters (J Ave., is a particularly steep street). This neighborhood is dominated by younger people and more apartments closer to downtown, by sprawling, older homes and families the further north and east you go (it is also known for its non-Mormon character and funky, scattered cafe's and several shops).
Just east, Federal Heights is home to some gorgeous, older homes. The University of Utah sits on the hills east and south of this area; the streets between 700 East and 500 South house many students, though most "U" students commute from suburbs. The area around 1300 East and and 300 South has shops and restaurants geared toward students and the university crowd.
The Downtown area is the site of a revival effort; several warehouses have been converted to housing and new building for shopping and eating (The Gateway) is geared to bring more people to the beautiful area. A historically important city center, you can also find several museums, plenty of restaurants, theaters, and historic homes here (like Brigham Young's house, now open as a museum).
Several other neighborhoods are scattered throughout the city. 15th and 15th (1500 S./1500 E.) has a lot of charm (with shops and restaurants), as does the area around 9th and 9th, where you'll also find the beautiful Liberty Park. Sugarhouse, at 2100 S. and 1300 E., has plenty of shopping (galleries, boutiques, large clothing stores, bookstores, music shops, etc.), eating, and a sprawling park. The East Benches is almost entirely residential, as is the area west of Foothill Blvd., the Harvard/Yale area.
West of downtown, you'll find some awesome Mexican restaurants, more industry, and scattered residential neighborhoods.