It Takes an Entire Year for Chicago To Grow as Much as Nashville Does in One Day

By: Chrissy Mancini Nichols

October 21, 2015 / Blogs

October 21, 2015 / Blogs

I read a stat that Nashville grows by 80 people a day. Of all the stats I read on a daily basis, this one stuck with me—Chicago only grew by 82 people in all of last year!

The Nashville region is expected to grow by almost 40 percent over the next 15 years, adding roughly 500,000 people, while Chicago—a region currently four times the size—will only grow by 7 percent, or 640,000 people. Nashville built 14,944 new housing units in 2014 to Chicago’s 15,679.

So what makes Nashville a place people want to live? What can Chicago learn?

This is a questions we’ve been exploring at the Metropolitan Planning Council. We know that Chicago is a slow-growing city and region, that over the next decade Houston may overtake Chicago’s place as third most populous city and that places like Nashville and Minneapolis are where everyone wants to be.

I went to Nashville, talked to local leaders, dined in its hip new restaurants, ate delicious popsicles and spent lots of time in Uber to find out what makes Nashville so great.

“I don’t have a desire to leave New York, I have a desire to not have a heart attack by the time I’m 30.”

The first thing I noticed about Nashville was cranes. They are everywhere. More than 100 new projects—$2 billion in development—are being constructed in Nashville. I counted six in a few-block area of the Gulch neighborhood, adjacent to downtown Nashville and Music Row, alone. The second most noticeable thing about Nashville? Cars. There are almost no transportation options other than driving.

Overall my research points to seven reasons Nashville has become so popular, but also cautions that sustainability is a real concern and could stymie future growth.

Reasons Nashville is growing

1. Low cost of living
2. Families
3. Less stress
4. Jobs
5. Government efficiency
6. Planning
7. Culture

Issues it must address

1. Transportation
2. Affordable housing

Located in the middle of Tennessee, Davidson County, Nashville is a city of 644,000 people that live in 475 square miles, about 1,355 people per square mile (compared to Chicago’s 11,800 people per square mile).

Nashville grew an average of 1.6 percent each year from 2011 through 2014, while Chicago only grew 0.3 percent annually.

In the past few years its population has surged. In 2014 alone the city of Nashville grew by almost 5,000 people and the region 34,000, compared to the city of Chicago’s 82-person growth and the Chicago region’s 4,735-person growth.

Breaking down the demographics, Nashville is much less diverse than Chicago, mainly because its Latino population is not as big.

Chicago and Nashville demographics in 2013

Source: U.S. Census

What makes Nashville an attractive place?

1. Low cost of living

A cost of living comparison offers the first glimpse of why Nashville is an attractive option for people. Nashville and Chicago have about the same median household income, but housing is less expensive in Nashville, with the median value of a home averaging $50,000 less than in Chicago. Add to that the fact that annual expenses for a family of four are roughly $15,000 cheaper. And Tennessee’s per capita taxes are some of the lowest in the country. With no state income tax, combined state and local per capita tax burden is only $2,777 in Tennessee compared to $4,658 in Illinois.

Comparing cost of living in Chicago and Nashville

Source: Economic Policy Institute

2. It’s good for families

Data shows that between 2009 and 2014 Chicago grew by 23,000 people and Nashville by 41,000 people. However, both grew by the same number of households—about 17,000 households.

The makeup of those households was significantly different—Chicago’s household growth was almost all small, non-family households, meaning either singles or people living together that are not related or not married. Meanwhile, Nashville’s growth was majority family. It’s likely that Chicago is experiencing household changes where larger families move out and are replaced by a single person or a non-married couple with no children, while in Nashville household growth is families with children—and that means more people.

3. Stress—less of it

Also on par with the low cost of living that makes Nashville an attractive place is a few phrases that kept coming up in my conversations—Nashville “is easy” or “simple” and “a less stressful place to live.” In a comparison of the most stressed-out cities, Chicago ranks sixth and Nashville 33^rd. While sitting at Barista Parlor Golden Sound, a coffee house located in an old recording studio in the Gulch neighborhood, I overheard a conversation that sums up that sentiment. A woman in her 20’s was visiting from New York City and talking on the phone about a potential move to Nashville. Her reason? I can work anywhere, why am I killing myself trying to pay rent in NYC when there are cool things in Nashville and it’s so much cheaper? She went on to say “I don’t have a desire to leave New York, I have a desire to not have a heart attack by the time I’m 30.” And the clincher: “I have another friend moving here from San Francisco and can rent a beautiful one-bedroom loft overlooking downtown Nashville and be less stressed.”

4. Jobs

Named one of Gallop’s top five cities for job growth, over the past decade Nashville grew nine times more jobs than Chicago as a percent of total jobs. Taxes and the regulatory environment could play a role in that growth—Tennessee’s corporate income tax rate is 6.5 percent, compared to Illinois’ combined 9.5 percent. Tennessee’s business tax climate is ranked 15^th overall, compared to Illinois at 31^st. There’s also no personal income tax.

Nashville’s cumulative job growth from 2005 through 2015 was 18 percent. Chicago’s? Two percent.

While Chicago’s gross regional product dwarfs Nashville’s at $610 billion compared to $107 billion, Nashville’s per capita gross regional product is just slightly less than Chicago’s at $55 million and $58 million respectively. And it has grown at double the rate of Chicago’s since 2001. Nashville has only two companies in the Fortune 1000 compared to Chicago’s 22, but office growth is on the rise. Office vacancy in Nashville is at 7.5 percent compared to Chicago’s 13.3 percent and Nashville has 1.7 million square feet of office space under construction, which is huge considering Chicago’s 2.2 million square feet of office space under construction. Lower office rents, combined with a lower cost of business and living, are attracting companies such as Lyft, which recently announced it was moving its customer support headquarters from San Francisco to Nashville and hiring 400 new employees. Lyft cited “San Francisco’s increasingly unaffordable rents” ($70 per square foot compared to Nashville’s $18-$22 per square foot) and that they “…chose Nashville as the home of our newest office because it is a great city with a lower cost of living and a growing talent pool.”

5. Government Efficiency

With no state income tax, combined state and local per capita tax burden is only $2,777 in Tennessee compared to $4,658 in Illinois.

A universal theme I heard attributed to Nashville’s growth is that the city “removes hurdles to make it happen.” One of these hurdles is layers of government. In several of my conversations with Nashville leaders, the discussion turned to the fact that Illinois’ tangled web of 7,000+ governmental units results in a highly fragmented governance system that does not directly improve our economy or quality of life. Businesses have said they located in Nashville because there were less layers of government to deal with in the region and, whether or not the reality, Nashville was perceived as an easier place to do business. For example, a call center was awarded a building permit in one day.

The city of Nashville and Davidson County have one, consolidated government, Metro. Assessment of that shift found the consolidated government did improve efficiency and slowed down the increase in government expenditures per capita, suggesting that the metropolitan government was doing more with its resources. Surveys of residents found that people were very satisfied with the consolidation.

6. Planning

Nashville recently adopted Nashville Next, a comprehensive plan that will guide the city’s growth for the next 25 years. Adopted on June 22, 2015, after three years of community engagement involving more than 18,500 participants, The plan is “…a strategy for what the city should do. Where to build homes — and what kind. How to improve transportation. And the best ways to spend city tax dollars.” There is an overall consensus on focused development downtown. The plan’s four strategies are:

• Create more walkable centers
• Create opportunity through abundant housing
• Build a high-capacity transit system and
• Increase the community’s resiliency

In creating the four strategies, planners considered changes in demographic trends, poverty and environment, and aligned those trends with the plan’s goals. For example, Nashville will have an older population with the aging of the Baby Boomer generation and a younger Millennial generation, both of whom will want smaller, attached homes rather than homes on large single-family lots. Further, demographic trends “…point toward a future where demand for walkable neighborhoods outstrips the supply…”

Nashville Next has a preferred future shaped by six factors:

• Protection of sensitive environmental features
• A complete transit network
• Household affordability across income levels
• Focus on activity centers—places with transportation access, abundant housing and amenities
• Strategic infill that supports transit lines and activity centers
• Protection and enhancement of the character of different parts of the county

The plan goals include:

• Develop standards that guide the design, location and construction of affordable housing across all neighborhoods.
• Target infill development along mobility corridors to provide more housing choices that support walking and transit use and to transition gracefully between residential neighborhoods and more intense mixed use and commercial centers and corridors.
• Ensure jobs, education and training opportunities are located close to transit service, in centers or in high-need areas.

These goals will guide how the Metro government regulates land use, zoning and other development decisions as well as capital spending through policy maps. The policy maps give geographic guidance for decision-making, such as priorities for transit or new greenways. Progress will be tracked annually.

7. Culture

Chicago is a cultural capital. Architecture, museums, the lakefront, the best restaurants in the country; it is unbeatable.

But Nashville has many of those amenities for a mid-size city. Its restaurant scene is, “…growing exponentially” and a new $623 million downtown convention center complex “…is demonstrating that the center of gravity is now moving downtown.”

And this may be anecdotal, but more than one person (and many Uber drivers) told me that Nashville’s growth is due to the TV show Nashville, Taylor Swift making country music more mainstream and Jack White.

What will limit Nashville’s growth: Sustainability

1. A lack of transportation options

The first thing I noticed when setting up meetings in Nashville was that everyone sent me driving and parking directions. Nashville does have a bus system, which has about 30,000 daily riders, but it is difficult to use for commuting because there’s no real time information. If you just miss the bus (and you wouldn’t know if you did) the next one doesn’t come for 45 minutes and you’ll be late to work. Most people—81 percent—drive to work alone, and less than 2 percent take transit. Virtually no one walks or bikes to work. In fact, the city doesn’t even have a department of transportation. Compare that to Chicago, where 30 percent of commuters take transit, rather than cars, to work every day. And 8 percent of Chicagoans do the healthy thing and walk or bike to work.

Nashville Next states, “Nashville is primarily built for car drivers, with few places that support different ways to get to work or services.” However, “by 2040, 45 percent of the population will be older Americans or youth too young to drive.” There’s clearly a need for transportation options. The city does have a small bike share system and entrepreneurial bar and restaurant owners even will pick up and drop off patrons in golf carts, because there are few other reliable options to driving.

The City did have a chance to build bus rapid transit. The project, known as the Amp, called for a seven-mile bus rapid transit system linking growing East Nashville to downtown and parts of the city’s west end. Former Mayor Dean believed it to be an important city asset that would make Nashville more attractive and competitive and induce development along the line. It even was promised a $75 million federal grant. But the project was killed. The opposition group “Stop Amp” was led by local car dealership and limo company owners with funding from Americans for Prosperity that worked to pass legislation in the Tennessee legislature outlawing bus rapid transit in Nashville.

In response to the Amp’s demise, former Mayor Dean said, “We’ve never come so far in bringing this level of mass transit to Nashville, and we have to continue the conversation to make it a reality.” In fact, transit was one of the foremost issues in Nashville’s recent mayoral race. Just about everyone I spoke with said transit was an important part of Nashville’s growth.

And there is a lot of opportunity. With all the development that’s occurring, Nashville could institute a value capture for transit district to fund new and better bus and rail service. I also saw very few parking meters during my visit and since Nashville is lucky not to have privatized the parking meters it does have, the City could install new meters in commercial corridors to both enable visitors the ability to quickly find a parking spot and use the revenue to fund transit. Newly elected Mayor Megan Barry ran on a transit platform and vowed to create a department of transportation and put transit at the top of the City’s agenda.

Nashville Next calls for a 200-mile framework for transit. It does not recommend what kind of transit mode should operate in each route but does present options. Bus Rapid Transit Lite (like local express service) would cost $2 billion. Building a system with a dedicated right of way (like light rail or bus rapid transit) would cost $8 billion. The plan also demands that the system be built in locations around employment centers and residential areas and that future development be targeted to these transit corridors.

2. Affordable housing

Nashville’s popularity has resulted in the depletion of affordable housing stock and rapidly rising rents. While rents in Nashville are still cheaper than larger cities, a quality that attracts people to move to Nashville from New York or San Francisco, “…the rapid increases have been met with sticker shock by [current] residents.” Combined with high transportation costs, if everyone in Davidson County earned the region’s median income, nearly every home in Davidson County would have a burdensome cost.

To build more affordable housing, this past August, Metro Council voted 31-4 to approve legislation requiring the City to create a plan that would mandate on-site affordable housing in all future residential development. The bill required Metro (the City and County consolidated government) to draft a mandatory inclusionary zoning proposal over the next 180 days. The ordinance advises the planning department to set a goal that 14 percent of all new residential units be affordable. The planning department must present the Metro Council with a plan in February 2016.

Demand for housing has sparked another trend—building two homes on one lot. I saw signs all over Nashville stating “We will buy your home.” Nashville zoning code allows developers to buy an unwanted older home in a hot neighborhood, demolish it and build new to accommodate multiple households under two separate roofs. For example, one developer “…tore down a 1,500-square-foot home. In its place he is constructing a three-story, 3,200-square-foot structure that is connected to a 3,400-square-foot companion home through a breezeway. His asking price is $599,000 apiece.”

What makes Nashville a successful place? Growing employment, low cost of living, ease of doing business and growth that will be guided by data and planning all contribute to a strong, desirable region.

Former Mayor Karl Dean foresaw that Nashville needed a strong, community-based plan to guide its growth and ended up with a blueprint—Nashville Next. The plan will ensure Nashville continues to thrive by building transit and affordable housing, investing in culture and open space and having an efficient government. Newly elected mayor Megan Barry ran on a transit platform, promising to create the first ever department of transportation and to build out a transit system.

Nashville’s success—and recognition it must become less auto-oriented for that success to continue—shows us that people in cities, no matter their size, no longer want the post-World War II era car-oriented suburbs. Cities like Nashville are redefining themselves to keep and attract people. Because both Chicago’s 3 million and Nashville’s 650,000 residents want the same amenities—transportation options, walkable neighborhoods and housing that doesn’t break the bank.

Nashville is grappling with these challenges, but Chicago—we have many of these systems in place. So is Chicago competing with Nashville? Yes. But Chicago can learn from a planning process like Nashville Next to guide development and be successful—definitely.

With hundreds of miles of rail lines, new bus rapid transit routes and a huge passenger base—2 million riders a day—the Chicago metropolitan area’s public transportation network is one of our greatest attractions. Transit access is not only attractive to businesses and developers, but also connects residents to jobs, amenities and recreation.

Yet for decades, the region’s growth trended away from the transit system and toward roads. Just 8 percent of the region’s population now lives within a quarter-mile of a rapid transit station. And Chicago needs billions in investment to upgrade and maintain the system, but the Chicagoland region underspends on transit operations and capital, both compared to its American and international competitors. Our region’s economic competitiveness will suffer as a consequence, hindering our ability to attract jobs and grow.

One way to invest more in transit is leveraging value capture. Atlanta, Denver, New York City, Washington, D.C. and San Francisco all use innovative financing mechanisms like value capture to reap the benefits of increases in private land values generated by public transportation investments. MPC supports creating transit facility improvement areas to enable the Chicago region to use similar financing on sorely needed transit projects such as the Chicago Transit Authority Red and Purple Modernization and Red Line South Extension and redevelopment and added capacity at Chicago Union Station, which serves more riders a day than Midway Airport and is at capacity.

Chicago must focus growth near transit. Development near transit helped double Chicago’s downtown population between 2000 and 2010—even as the city as a whole lost population. By building new opportunities for people of all incomes to live, work and shop near transit in neighborhoods across the city, we can grow Chicago and give more Chicagoans excellent access to high-quality schools, jobs, retail and parks.

But increasingly, places with excellent transit access price out low and even middle-income residents. This trend bodes poorly for the city, as the latest research from Harvard University has shown that commuting time—in essence, how easily or not a person can get to work—is the strongest factor in determining whether a person escapes the cycle of poverty. As my colleague Breann Gala points out, the proportion of families living in poor neighborhoods in the region, where median income is less than two-thirds of the metropolitan area median income of $75,475 according to the 2007-2011 American Community Survey, or affluent neighborhoods, where the median income is more than one-and-a-half times the metropolitan area median income, has increased steadily since 1970.

If the Chicago region wants to grow, it must work to improve opportunities for all people. Initiatives such as the Regional Housing Initiative and Voucher Pilot that reduce housing cost burden and expand transit access, and others that build