The waterfront is the part of a town that sits right at the edge of water — the sea, a river, a lake, a harbour. It is the strip where the buildings stop and the water begins: the road along the water, the docks, the shops and restaurants facing out, the walkway where people go in the evening. So it is not the water itself, and it is not the whole town — it is the town's edge where it meets the water.

We use it two ways. First, plainly: 'We walked along the waterfront.' Second, as a describing word before another noun: 'a waterfront restaurant', 'a waterfront apartment', 'waterfront property'. In this second use it almost always means expensive and nice, because a view of the water costs money. Estate agents love the word.

The feeling of the word changes with the city. In an old port city, the waterfront can mean the working docks — cranes, containers, rough work, dock workers. That is where the old phrase 'on the waterfront' comes from, meaning the tough dock world. But in most modern cities the old docks have been rebuilt into cafés and parks, and people now say 'the waterfront' meaning the pretty part. Both meanings are alive; which one you hear depends on the place and the age of the speaker.

It is a normal, everyday word. Not formal, not slang. Usually 'the waterfront', with 'the', when you mean a particular town's one.