People want to move to Nashville and Middle Tennessee, and the region continues to experience rapid growth. But challenges remain, along with the opportunity to shape its development.
Jennifer Carlat
| Guest Columnist
How can Nashville area balance low taxes, growth and quality services?
The 14-county region in the Nashville area grew by more than 3,000 people a month from 2010 to 2020. This growth brings opportunities and challenges.
Wochit
- Nashville ranked sixth in the nation among “markets to watch” in the latest Emerging Trends in Real Estate® report.
- A welcoming regulatory environment, trained workforce, and strong domestic migration contribute to Nashville’s high ranking.
- Continued growth creates jobs and funds public services, but also requires addressing housing and infrastructure needs.
The Urban Land Institute and PwC recently released the 47th annual Emerging Trends in Real Estate® report and for the eleventh year, Nashville made the top ten “markets to watch” this year at number six.
Nashvillians don’t need a report to alert them that Nashville and Middle Tennessee continue to grow and develop at an astonishing rate, for an incredibly long run. We see the cranes, carefully make our way through construction zones, meet new neighbors and co-workers, and marvel (and sometimes mutter) at new offices, residential developments, hotels, retail and restaurants.
The challenges that come with Nashville’s continued growth
So, what does the Emerging Trends Report tell us?
First, while Nashville’s growth may appear to be going like gangbusters, there is significant uncertainty facing those who invest in development, as well as the architects, engineers, developers, construction workers, and many others involved in creating new development. The report notes several issues. All of which are present in Nashville, including the following:
- Economic and financial issues, such as interest rates and the cost of capital, concerns about job and income growth, and, of course, inflation.
- Issues specific to development, including the cost and availability of labor; federal, state and local regulations and where they conflict; and increasing operating costs driven by tariffs and inflation.
- Finally, social and political issues impacting development include immigration policy, which affects both the workforce and demand for new development; the cost and availability of housing; and the divide between political parties.
What Nashville and Middle Tennessee have going for them
Second, the report highlights why Nashville again made the top ten — what trends, decisions and investments we have going for us. As the report notes, demand for new homes, offices, industrial and retail spaces is driven by demographics, immigration and domestic migration.
The Sun Belt, and Nashville in particular, continues to be welcoming for jobs and residents. While many Sun Belt cities have seen their 2021-2022 migration slow significantly, Nashville and Middle Tennessee continue to experience strong domestic migration.
Why?
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Nashville and Middle Tennessee are known for having both a moderate climate and a welcoming regulatory and tax environment. We boast access to the Southeast and the country. We have a trained workforce and a number of colleges and universities educating the next generation. We’re also known for valuing creativity and being welcoming. For all these reasons and more, we continue to draw new residents, which drives growth.
We know, then, that Nashville and Middle Tennessee continuously rank highly for both investment and development, and we have some ideas on why.
The connection between growth and quality of life
But what does this mean for our city?
Investment, development and growth impact all Nashvillians and Middle Tennesseans. On a very basic level, these are jobs. Jobs in investing, building, using and re-using buildings. Each of these jobs pays our neighbors, who invest their wages back into Nashville through restaurants, stores, services and other local businesses, creating even more jobs.
Growth leads to quality of life, but not only in a physical way.
Do you like the building? Does it feel welcoming? Does it add to the neighborhood?
But growth also improves quality of life as it circulates wages, creates demand for new jobs, and adds to the city’s coffers to buy services such as parks, libraries, fire stations and police departments that we value.
Meanwhile, how we undertake investment, development and growth also impacts each of us. Our city has had recent, sometimes tough, conversations on investing in transportation and transit. We’ve discussed whether to allow new types of housing to address our housing shortage. We’ve considered how to invest in aging infrastructure as we serve current residents and accommodate new residents and businesses.
What Nashville’s ranking really means and the work ahead
As the executive director of ULI Nashville, representing our 1,100+ members in all disciplines related to land use and development, I am thrilled that Nashville once again made the top ten “markets to watch” across the US in the Emerging Trends in Real Estate®. I’m happy about what it signals for our members, especially in a moment like 2025, when there is a lot of uncertainty.
But I am more focused on what the ranking means — what Nashville’s strength means — for how ULI Nashville, our partners and Nashvillians can work together to harness and shape growth in our city.
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A high ranking feels validating, but we all know that maintaining this pace of growth — while trying to preserve our welcoming culture, watch out for our neighbors and consider what changes are coming and how we can prepare — is a challenge.
ULI Nashville and its members are here to be partner. We want to connect, inspire and lead. We are bringing our perspective to the tough conversations about how we grow and strengthen Nashville. The Emerging Trends in Real Estate® report is just the beginning. The real work is in conversations on mobility, housing, infrastructure and creating places Nashvillians deserve.
Jennifer Carlat is the executive director of ULI Nashville, A trusted convener, collaborator communicator and educator of best practices on all aspects of city building.
