Downtown has had “slow-growth”, and does not necessarily follow the same trends as the national economy. Economics Research Association identified a deficit of 4400 residential units in the Greater Downtown area in 2003. ERA estimated that downtown could expect to absorb 7500 new residents by 2010 without over-suturing the downtown market. This equates to approximately 628 units per year for seven years.
It is important to note that when measured by ERA’s projection of the number of units that could be absorbed in downtown between 2003-2010, each year except 2008 has a deficit of potential units delivered to the market. Although demand is being met and exceeded in 2008, the deficits from the other years illustrate that there is more room for absorption. If all the projects are completed there will still be room for absorption of 2836 more units in the Greater Downtown by 2010.
Several residential projects—new construction and rehabs—have been put on hold due to market conditions and tightening of lending practices. In 2007, when looking at projects planned for delivery through 2010, there was a cumulative deficit of 1115 units. Current calculations show that the deficit of units that could be absorbed by 2010 will be 2836, more than double the 2007 deficit.
Although a handful of projects are planning to move forward when the national market recovers, the construction timelines will not allow for most deliveries until at least 2011. The statements that downtown Nashville may become overbuilt is not relevant at this time or in the foreseeable future. If all projects on the drawing board are built, they will only bring 962 units to the downtown market.