By Cameron McWhirter and Mariah Timms | Photographs by Liam Kennedy for The Wall Street Journal
NASHVILLE, Tennessee -- Remacia Smith watches her children play in a grassy park by the Cumberland River, not far from where software giant Oracle said last week it would base its new headquarters. It is bittersweet -- her hometown is thriving, but it has reached a point where it no longer works for her.
With skyrocketing housing prices in the city, Smith recently fled to the suburbs. It is where she could find a home she could afford for her and five children.
"It almost doesn't look like Nashville anymore," she said, as she watched her children frolic in the same park where she played as a child. "Whew Lord, I wish people would stop moving here."
That is unlikely.
Oracle's move from trendy Austin, Texas, marks the latest corporate win for Middle Tennessee, a booming region with Nashville at its heart. The area has spent decades trying to draw major corporations and workers to the area. Now, many Nashvillians, from political leaders to residents, are talking more about how to grapple with all of its success.
"There are pain points of this growth," said Kate Webster, a 35-year-old real-estate agent who has lived in Nashville for 14 years. "But at the end of the day, I'd rather live in a city that is growing than one that is declining."
In 2000, the metro Nashville region had about 1.3 million residents, according to the U.S. Census Bureau. In 2023, the Census estimated the area's population to be 2.1 million.
Nashville, Tennessee's capital, was seen in the mid-20th century as the home of state government and country music, but not much else. Outside of the capital city, much of Middle Tennessee was rural.
In 1983, Nissan set up a plant in Smyrna, southeast of Nashville, and General Motors launched production at a plant in Spring Hill, south of the city, in 1990. But Nashville was severely hurt during a national economic downturn in the late 1980s, according to Ralph Schulz, chief executive of the Nashville Area Chamber of Commerce.
Leaders decided to launch more strategic efforts to draw companies and workers to the area after a 1989 article in The Wall Street Journal highlighted how the downturn had hit Nashville so much harder, in part because of overbuilding and a lack of planning by regional leaders. Other Southern cities had fared better.
"The business community, mostly bankers, said, 'Nope, unacceptable. We need a plan,'" Schulz said.
Nashville area leaders launched a series of five-year plans to revitalize the city's country-music tourism and clean up downtown. They worked to lure professional sports teams, including a football team from Houston -- today known as the Tennessee Titans.
Local companies and Vanderbilt University have also played a major role in Nashville's growth. HCA Healthcare, founded in Nashville in 1968, grew to become a leading owner and operator of hospitals and healthcare facilities in the country and abroad. The company, still based in Nashville, has helped make it a healthcare tech hub, according to William Fox, an economist and former director of the University of Tennessee's Boyd Center for Business and Economic Research. Oracle officials said that being close to its healthcare-industry customers was a factor in its decision to move.
Amazon said it would set up major operations downtown, and the New York money manager AllianceBernstein said it was moving its headquarters to Nashville in a cost-cutting move. These moves, plus the growth of the city's tourism industry, set off worries that the growth might become unsustainable.
While political fights over development began to erupt, growth in outer parts of the metro area, Nashville's exurbs, continued unabated. Tennessee has drawn companies seeking lower operational costs, with no income tax for workers and relatively low property costs and taxes. It is a right-to-work state, which is attractive to some companies, despite the recent decision by workers at Volkswagen's Chattanooga plant to unionize. The area's relatively low cost of living and low unemployment mean workers moving here have a good chance of landing a job and a better chance of finding a home compared with higher-priced metro regions.
The median home-sale price in Nashville was $414,012 at the end of February, according to Zillow Group, compared with a nationwide median of $327,667. Five years ago, the median Nashville house cost $290,983.
Average rent reached $2,231 a month in April, down about 3% from a year earlier.
Jack Gaughan, who heads a Nashville real-estate office, said demand for homes softened when interest rates went up, like elsewhere in the U.S. But he expected sales to be brisk as soon as rates drop, especially in light of increased demand from the arrival of Oracle workers, he said. As he spoke from his home office in North Nashville, he watched three new homes being built outside his window, he said.
The region needs to focus on improving transit options and traffic flow, and on more housing options, Gaughan said. Many neighborhoods need to rezone for construction that allows more people to live there, he said.
John Michael Morgan, a lifelong resident of the area, said he remembers when Nashville's prospects weren't so hot. The growth is exciting, he said, but he worries about Nashville losing some of its personality.
"Nashville's always been a big town that felt like a small town," said Morgan, who is 44 years old. "Now we're a big town that feels like a big town."
Fox at the University of Tennessee said downtown Nashville may feel growing pains, but Middle Tennessee as a region is poised for much more growth.
"It's where workers want to be. It's where businesses want to be. That's a pretty good combination," he said.
A report published in January by the University of Tennessee and state agencies on the state's economic outlook found nonfarm employment numbers in the state were well above prepandemic levels and the labor market remained extremely tight -- drawing lots of people from other states. The migration from other states is accelerating, according to census data. From 2010 to 2014, Tennessee added about 29,000 residents annually through net migration from other states. From 2015 to 2021, the state added about 49,000 a year through net migration. In 2022, the most recent year the Census has reported, Tennessee gained almost 90,000 new residents through net migration.
Danielle Dunaway, 42, who moved here 5 1/2 years ago and works in healthcare, said she now loves Nashville. She's excited that new businesses and workers are coming -- as long as things don't get too expensive.
"I already pay a pretty penny to live here," she said. "I can afford it, but I don't know how much longer I can justify it."
Write to Cameron McWhirter at Cameron.McWhirter@wsj.com and Mariah Timms at mariah.timms@wsj.com
(END) Dow Jones Newswires
April 28, 2024 05:30 ET (09:30 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments