Scholar: Rentals will account for majority of future Metro construction

Utah prof lays out for Civic Design Center crowd how demographics should drive development

Nashville’s planners and real estate professionals need to expect — and play their part in preparing — a much denser and much-changed city a few decades from now, according to an urban scholar’s series of long-term forecasts.

Speaking to the annual meeting of the Nashville Civic Design Center Wednesday, the University of Utah’s Chris Nelson said Davidson County will account for 49 percent of the growth in Middle Tennessee’s single-person households between now and 2040. In addition, a whopping 81 percent of new households without children will be formed in Davidson. (By contrast, Nelson projects, Middle Tennessee’s suburban counties will account for 92 percent of the population growth among people 65 and older.)

Those urban resident trends — many of them already are showing up in the form of Nashville’s apartment and condominium boom — mean seismic changes are coming for a housing construction sector that has for decades relied primarily on detached single-family housing products.

“The future demand in this region for larger homes on larger lots will be considerably less than it was before,” Nelson told a crowd of more than 400 at the Hilton Nashville Downtown. “If you haven’t figured out these demographic changes by 2025, you’re going to have some very interesting issues […] So do your planning now because in 2025 or 2030, you don’t want to be behind the eight ball.”

Nelson, whose official titles include director of the Metropolitan Research Center at the University of Utah, said many of the demographic changes now underway are being reinforced by rising gas prices and falling home ownership rates as mortgage lenders demand bigger down payments. As a result, he told the NCDC crowd, a whopping 75 percent of new housing units added in Davidson County between 2010 and 2030 will need to be rentals. By contrast, the counties surrounding Davidson will see 69 percent of new units be destined for ownership.

Nelson relayed a number of other 2040 projections that he said should inform regional planners. Among them:

• Across the Nashville MSA, 38 percent of household growth by 2040 will come from people turning 65 during that time. In the two decades ending in 2010, that number was just 10 percent.

• Nationally, as many as 15 million seniors could be unable to sell their homes because of a relative scarcity of buyers. The overhang will be especially acute, he added, in slower-growing regions such as the Great Lakes and the Northeast. Cities such as Nashville will be able to overcome the problem thanks to continuing population growth.

• The Nashville MSA will need to build about 400 million square feet of new space by 2040 and recycle another 800 million square feet. Of the overhauled space, Nelson predicted, Davidson County sites will account for 310 million square feet.

Much of that redevelopment, Nelson emphasized, should be done along the city’s often-underused commercial corridors. The floor-to-area ratios along many of those arteries, he added, could often be more than doubled without needing to add infrastructure. (For more on that topic, check out our recent Boom magazine.)