Historically, Nashville has taken a slow-growth approach, especially in the residential sphere. Developers got a late start in downtown due to lack of residential zoning until the mid 1990’s. The Downtown Living Initiative released in 2003 by the Mayor’s Office, the Nashville Downtown Partnership, and several partnering organizations, served as a catalyst for many developers, prompting them to follow in footsteps of developers in downtowns across the nation. While Nashville was just beginning its residential renaissance, its sister cities were building downtown neighborhoods.
Many of Nashville’s peer cities are several decades ahead in residential development including Memphis, Charlotte, St. Louis, and Indianapolis in numbers of residents living within the downtown environment. At the end of 2008, St. Louis will have over twice the number of downtown residents as Nashville and Memphis will have over four times the number. Indianapolis expects to have 40,000 residents by 2020. In 2001, downtown Nashville had approximately 1,380 residential units. It is estimated that by 2009 there will be 3,686 units. By the end of 2009, the number of residential units will have almost tripled since 2001. Although Nashville’s inventory will grow at a moderate pace over the next few years, it still remains underdeveloped in comparison to other peer cities. While downtown Nashville’s housing unit growth will be 16.02% by 2010, it is trailing Indianapolis (17.75%) and Charlotte (23.64%).
The lag in available downtown housing stock has created a pent-up demand that will not be satisfied with the projects slated to be delivered by 2010. New developments should expect moderate fallout due to changes in lending guidelines. The units that do come back on the market are anticipated to be absorbed due to the continued pent-up demand for downtown housing. The desire and demand to live in downtown Nashville are also attributable to the fact that Nashville continues to be on the national radar through rankings and corporate relocations.