Canopy South — Accommodating Population Growth
What Kind of Housing is Being Built to Accommodate Nashville’s Growing Population?
As Nashville’s neighborhoods scramble to make room for the city’s growing popularity and resulting population boom, many real estate investors, developers, architects, and city planners are wondering what this means for the character and aesthetics of our neighborhoods. The Nashville MSA is on pace to reach 1.9 million residents in September and to accommodate this population milestone, our housing stock is being transformed house by house, block by block, neighborhood by neighborhood. It’s no surprise that Nashville is one of the best cities for real estate investing.
Nashville’s population has increased steadily over the past five years and is one of the fastest growing cities in the nation, behind Austin, Raleigh, and Denver. On May 1, the Getahn Ward noted in The Tennessean that “At the Nashville Area Chamber of Commerce, Vice President of Research Garrett Harper cites a rate of 71 people per day as the most recent figure based on last year's net growth of more than 26,062 people moving in and out of the Nashville region. Add the number of people born or who died here and that number would increase to nearly 100 a day.”
The Changing Landscapes of Nashville Neighborhoods
Luxury Apartment Communities
To accommodate this new population density, John Cannon, a commercial real estate manager for Pinnacle Financial Partners predicts that our real estate market will soon absorb new residents and will begin laying the foundation for a future influx of new Nashvillians. In February he wrote, “The number of new apartments built or being built in Nashville is stunning. As of late last year, there were some 12,000 apartment units under construction both in the urban core and in suburban areas. With that many units set to be delivered in a compact time frame, we can’t avoid some level of temporary oversupply. That will lead to some short-term softness in the market” (The Tennessean).
While many of these new complexes are offering up to three month’s free rent to attract tenants, Cannon predicts that these incentives won’t be around for long and that the new apartments and multi-family developments are on the horizon.
The recently completed Cleo Apartments in East Nashville boasts 291 units and offers its residents “Resort style luxury in an unpretentious setting” and is wooing potential renters with two month’s free rent, outdoor entertainment spaces featuring TVs, a fireplace and a Bocce court, a “resort worthy pool”, a 24-hour athletic club, and a concierge fitness program.
Apartment communities like the Cleo or The Cadence target young, upwardly mobile professionals looking for an exclusive, convenient, and convivial environment. Often, these communities function as a small city-within-a-city with on-site restaurants and attractive retail options.
Horizontal Property Regimes
In many highly desirable Nashville neighborhoods like the Nations or Sylvan Park, older single-family homes are being torn down to accommodate two units on one lot. Often these homes have shared common spaces and driveways. These modern homes, also known as A/B houses, are typically well-appointed, carefully designed, and are built to accommodate the city’s population surge.
These horizontal property regimes are essentially mini-subdivisions and operate much like a traditional condo association.
Tall and Skinnies
While many “Tall and Skinnies” may also be classified as a horizontal property regime, they deserve some individual attention. These structures are one of the primary ways in which real estate developers have responded to current demand. Tall and skinny homes often appeal to young professionals, working families, and retirees looking to simplify their lifestyle and who seek the convenience of living and working near Nashville’s urban center.
Tall and Skinnies are polarizing, to be sure. Some love them, some hate them. While many early examples of these tall, skinny structures (usually two to four stories with a 1:2 height to width ratio) were reviled by long-time residents as shoddily-constructed “eyesores,” the movement is starting to mature. Today, architects and developers are increasingly committed to cooperating with neighborhood associations and city council representatives and are heeding historical overlays. Thankfully, many real estate developers are partnering with reputable architects to erect striking, modern homes that are respectful to neighboring properties.
In an opinion piece for Nashville Post, Architect David Grisham, co-founder of Aesh Design — a firm that advocates for accessible and responsible design — makes a compelling plea to developers to respect the inherent beauty of Nashville’s neighborhoods, “The market must evolve past the ‘quantity over quality’ mindset to embrace a ‘less is more’ mantra to facilitate smart growth--factors other markets have neglected to date, and the results are glaring. So while a more dense, single-family option is needed, it doesn't have to be the equivalent of a tall non-fat skinny latte with caramel drizzle on top.
As Nashville continues to transition to urban housing, expect to see more apartment complexes, horizontal property regimes, multi-family homes, and urban row homes and townhouses being constructed throughout Nashville. But also expect the face of these homes and our neighborhoods to continue to evolve as well.
Be a part of the real estate renaissance, contact Canopy South Capital Management to learn how you can help fuel Nashville’s residential real estate market.