People with ____________ have been demanding better access to local government buildings downtown.

The correct choice is "disabilities" because it specifically refers to individuals who may have physical, mental, or developmental challenges that can affect their ability to navigate or access certain environments, such as local government buildings. In the context of this sentence, it highlights a marginalized group advocating for accessibility improvements, which is an important social issue.

The other options do not fit as well within this context: "abilities" typically refers to positive skills or talents, which is contrary to the situation described. "Challenges" is too vague and does not directly communicate the specific type of barriers faced by those advocating for better access. "Limitations" may imply a restriction, but it lacks the specific connotation of disability, which underscores the need for accommodations and support. Thus, "disabilities" is the most precise and contextually appropriate choice.