The AP Stylebook, The Chicago Manual of Style and Words into Type, three books that I reference fairly often, all say about the same thing when discussing when to capitalize the names of regions.
AP, which has its listing for regions in the stylebook under the directions and regions heading, says to lowercase names of directions -- north, south, etc. -- but to uppercase words when they designate regions. Words into Type says to "Cap popular appellations for regions and localities." The Chicago Manual of Style allows for even more leniency: "Popular names of places, or epithets, are usually capitalized. ... None should be used in contexts where they will not be readily understood."
A lot of the examples given in the above-stated reference books, as well as in stylebooks for other large publications, refer to names of regions that are large (the Bay Area, Silicon Valley, the West Coast, etc.).
But what about when your publication is a bit smaller than the New York Times?
For small publications, it might make sense to capitalize names of regions that fall within the coverage area.
If you are thinking of doing this, say for the city's downtown (or would it be Downtown?) I would just make sure to make sure that the area has a popular name that is readily understood and the area has somewhat clear boundaries that are readily understood.
If it is clear to your readership that Downtown means a certain section of Jonesville, then go ahead and use it; same goes for other names: Jonesville South, Jonesville West, Jonesville Bay.
Stylebooks paint broad guidelines, and you need to apply them to your circumstance. Just because Downtown Jonesville isn't in the AP Stylebook doesn't mean it's not a legitimate well-known region (at least to your readership) that should be capitalized.