Nashville Bits and Pieces

[chc3]

Also impressive considering that Nashville is only the 34th largest metro area, 40% the size of Phoenix, e.g.

[Baronakim]

1 hour ago, chc3 said:

Also impressive considering that Nashville is only the 34th largest metro area, 40% the size of Phoenix, e.g.

What is impressive to me is not the land acerage size of Metro, but that so much is being concentrated in a rather small downtown core very intensively.  It pleases me greatly that Nahville never developed city sized nodes surounding it like Buckhead or perimeter in Atlanta.  Cool Springs comes close, but it restricts building heights and density, so it is not a real rival to Nashville's core.

[PaulChinetti]

4 minutes ago, Baronakim said:

What is impressive to me is not the land acerage size of Metro, but that so much is being concentrated in a rather small downtown core very intensively.  It pleases me greatly that Nahville never developed city sized nodes surounding it like Buckhead or perimeter in Atlanta.  Cool Springs comes close, but it restricts building heights and density, so it is not a real rival to Nashville's core.

Same. Downtown is downtown. 

[andywildman]

17 hours ago, KJHburg said:

^^^ from that WSJ article NC has several growth engines the Charlotte region banking finance HQ, Raleigh Durham biosciences pharma technology and NC has the lowest corporate income tax of any state with one.  We pay a flat personal income tax rate which is declining yearly but less than GA SC or VA.  

anyway Nashville metro is building lots of new homes in 2023 so far  in fact the 9th most in the nations metro areas.  That is very impressive and more than LA metro area.  

https://www.chamberofcommerce.org/new-home-construction

Company movement numbers are downstream of housing prices. The two biggest metros in the country (NYC and LA) are massively underbuilding compared to their size, yielding expensive homes.

The ability to build housing (that is accessible to white-collar and skilled-manufacturing incomes) is as important to driving the investment in the Sun Belt as the state corporate tax rates.

[PaulChinetti]

1 hour ago, andywildman said:

Company movement numbers are downstream of housing prices. The two biggest metros in the country (NYC and LA) are massively underbuilding compared to their size, yielding expensive homes.

The ability to build housing (that is accessible to white-collar and skilled-manufacturing incomes) is as important to driving the investment in the Sun Belt as the state corporate tax rates.

9166 homes in 2023 seems like a lot of the city. 

But I think you are right, there needs probably to be at least double, but more like quadruple that amount of housing being built every year to satirist the needs of people who can't afford $800k houses and I don't think that is anywhere close to be meet right now.

There was a person on reddit yesterday asking where they could find a house that was around $800 a month in rent and I don't think that's going to happen anywhere in the city without multiple roommates. The missing middle housing is going to hinder Nashville propers growth and increase the growth even farther out, which will lead to a whole host of other problems. 

[MLBrumby]

I'll make this point based on experience and nothing I know as FACT! 

Metropolitan Nashville-Davidson County has appeared to be notoriously derelict in their statistical tracking of permits and other records that would help the entities responsible for addressing growth. To wit: USCB data on NDC over the past 4 decades is never up-to-date. And more specifically, when one looks for data online for housing permits (by project or unit), one has never found any data that reflects recent development.  The net result is there is an undercount (you see this from decade to decade), especially w.r.t. Davidson County.  Speaking on experience. 

[chc3]

15 hours ago, PaulChinetti said:

There was a person on reddit yesterday asking where they could find a house that was around $800 a month in rent and I don't think that's going to happen anywhere in the city without multiple roommates.

Exactly. I have a young friend renting a room in South Nashville for $1,000 per month!

[smeagolsfree]

16 hours ago, PaulChinetti said:

There was a person on reddit yesterday asking where they could find a house that was around $800 a month in rent and I don't think that's going to happen anywhere in the city without multiple roommates. The missing middle housing is going to hinder Nashville propers growth and increase the growth even farther out, which will lead to a whole host of other problems. 

I don't know if they will find that within 50 miles of Nashville and if they did it will be a dump!

[Nathan_in_DC]

On 6/15/2023 at 5:45 PM, PaulChinetti said:

9166 homes in 2023 seems like a lot of the city. 

But I think you are right, there needs probably to be at least double, but more like quadruple that amount of housing being built every year to satirist the needs of people who can't afford $800k houses and I don't think that is anywhere close to be meet right now.

There was a person on reddit yesterday asking where they could find a house that was around $800 a month in rent and I don't think that's going to happen anywhere in the city without multiple roommates. The missing middle housing is going to hinder Nashville propers growth and increase the growth even farther out, which will lead to a whole host of other problems. 

Nashville's sales and rental market has been completely wrecked by the large private investment and real estate firms buying up massive amounts of stock, setting rental prices higher than they should be, and then trying to flip them for a quick profit. Honestly, I don't see how there hasn't been any investigations into price fixing, though our current set of laws doesn't really prevent most of this sort of activity. A few months back the New York Times ran an article on how the influence of private equity and aggressive algorithm-driven automatic real estate purchasing was wreaking havoc on the market in the country and used a neighborhood in La Vergne as a case study (pretty sure I posted it in this thread somewhere). They showed how homes that just a few years back were considered starter homes, going for $200k-300k, had been scooped up by rental management companies. Entire neighborhoods of housing stock were removed from the sales market and, because of the size of the companies involved, they didn't mind if the houses were sitting empty without renters because the rent was too high, they were planning on flipping them in a few years anyway.

The problem is made worse by the fact that it seems like there are only two types of development in town right now: high rise apartments or condos and sprawling sub-divisions. There aren't a lot of $300-400k townhouses, rowhouses, or duplexes being built that would appeal to younger first-time buyers who want a smaller house in a walkable neighborhood. God forbid you want to be a one-car family within walking distance to a grocery store and entertainment!

[andywildman]

On 6/17/2023 at 8:33 PM, Nathan_in_DC said:

Nashville's sales and rental market has been completely wrecked by the large private investment and real estate firms buying up massive amounts of stock, setting rental prices higher than they should be, and then trying to flip them for a quick profit. Honestly, I don't see how there hasn't been any investigations into price fixing, though our current set of laws doesn't really prevent most of this sort of activity. A few months back the New York Times ran an article on how the influence of private equity and aggressive algorithm-driven automatic real estate purchasing was wreaking havoc on the market in the country and used a neighborhood in La Vergne as a case study (pretty sure I posted it in this thread somewhere). They showed how homes that just a few years back were considered starter homes, going for $200k-300k, had been scooped up by rental management companies. Entire neighborhoods of housing stock were removed from the sales market and, because of the size of the companies involved, they didn't mind if the houses were sitting empty without renters because the rent was too high, they were planning on flipping them in a few years anyway.

The problem is made worse by the fact that it seems like there are only two types of development in town right now: high rise apartments or condos and sprawling sub-divisions. There aren't a lot of $300-400k townhouses, rowhouses, or duplexes being built that would appeal to younger first-time buyers who want a smaller house in a walkable neighborhood. God forbid you want to be a one-car family within walking distance to a grocery store and entertainment!

My gut reaction was "there's no way that big companies can buy enough houses to change the market that much", then found this link, where the Rutherford County property assessor said in 2021 that nearly 10% of homes in that county were investor owned.

Even though investor purchases are down, both in absolute terms, and in % of total home purchases, investors still represent 15% of Nashville area home purchases.

I don't know everything, but seems like a good way to counter investors banking on price growth is to build so many new homes in Nashville that the home price growth in our city slows to be less than the national average. That means less growth in value for current homeowners like myself, but it means that our city doesn't become insanely priced for normal people looking to buy, like Boise or the DC area or the west coast.

[samsonh]

1 hour ago, andywildman said:

My gut reaction was "there's no way that big companies can buy enough houses to change the market that much", then found this link, where the Rutherford County property assessor said in 2021 that nearly 10% of homes in that county were investor owned.

Even though investor purchases are down, both in absolute terms, and in % of total home purchases, investors still represent 15% of Nashville area home purchases.

I don't know everything, but seems like a good way to counter investors banking on price growth is to build so many new homes in Nashville that the home price growth in our city slows to be less than the national average. That means less growth in value for current homeowners like myself, but it means that our city doesn't become insanely priced for normal people looking to buy, like Boise or the DC area or the west coast.

Most investors are mom and pops, not corporate entities like Blackstone or companies like American Home 4 Rent. Everyone thinks being a landlord is easy, when in reality most of these mom and pops are probably losing money on a cash flow basis. I agree that the solution is building many more homes. We need to make permitting simpler and increase the supply of labor. 

Edited June 19, 2023 by samsonh

[KJHburg]

I own several rental homes as a mom and pop.  As stated above it is not easy but it is my retirement. I have owned these homes for over 10 years.

But what has happened in the last few years with corporate buyers is unprecedented across the country.  Backed by cheap money from Wall Street (though with higher interest rates this has changed) they bought up 1000s and 1000s of moderately priced homes across the country with Charlotte and Atlanta being some of their biggest targets.  They paid cash and many sellers could not resist.  However people in this area starting fighting back.  How you ask?  Neighborhoods with HOA passed limits of home rentals in their neighborhood (too late for some communities unfortunately) A more successful way to tamp down on this has been HOA changing their restrictions to say you can rent your home AFTER 1 year of ownership.  Wall Street investors hate that but there is nothing they can do.  One neighborhood locally found in their HOA documents that one owner could only own 2 homes in the community.  Well it was not enforced until an attorney found it and 10-12 corporate  owned home had to be put on the market. 

another way some sellers fought back is through just not selling to investors.  My moms house a moderate priced ranch got 30 offers two years 15 from from owner occupants and 15 from investors.  She sold to an individual.  Many other agents and sellers starting doing the same thing as people would ask me if my client was an owner occupant or not.  Paying cash and being backed by Wall Street is not a protected class under fair housing.  

Why does Wall Street corporate back firms want SF homes?  simple the absolute biggest way to gain wealth for most people in through their homes and they have want that action for themselves.    Right now the investors are slowed down greatly in this area due to higher interest rates (they cant get the numbers to work) and in fact some are selling off some of their homes purchased many years ago.  

Now I am not opposed to investors owning real estate and single family home and some of these big buyers are now building Build to Rent communities.  Communities of all single family homes for rent.  Great and it seems that would  be easier to manage than homes all over a city.   

Here is story from Charlotte in 2021 

https://ui.charlotte.edu/story/wall-street-backed-landlords-now-own-more-11000-single-family-homes-charlotte

https://www.wfae.org/show/charlotte-talks-with-mike-collins/2022-05-18/corporate-investors-are-gobbling-up-homes-in-charlottes-tight-housing-market

For those not familiar with Charlotte where they bought homes was mainly in the moderate priced areas not in the highest value neighborhoods.    

But if investors start buying up most of of the neighborhood it does deny people homes to buy and thus many are forced to rent.  And that is just wrong.  

our Charlotte and region is being proactive to protect home buyers and the number of sales to investors has slowed down due to many factors.  Nashville may be their big new target. 

https://news.mecknc.gov/your-home-your-castle-meck-county-seeks-input-and-ideas-corporate-home-purchases

https://www.qcnews.com/news/u-s/north-carolina/mecklenburg-county/mecklenburg-county-plans-to-tackle-corporate-investors-buying-and-selling-homes-in-charlotte/

PS I sold one of my rental homes last year and did not even consider an investor offer only owner occupant offers.  It took about the same time as a cash deal would have taken  to close for same price or close to it as my highest investor offers.  

 

 

[markhollin]

Imagine Nashville will be a new group to help Nashville’s residents steer the city’s continued growth and ensure it benefits the entire city, not just a privileged few.  It will have a 26 member steering committee led by Dr. Alex Jahangir, orthopedic surgeon and former chair of the Nashville Covid-19 Task Force, Renata Soto, founder of Mosaic Changemakers and Conexión Américas, and the Rev. John Faison Sr., senior pastor of Nashville’s Watson Grove Baptist Church. 

Imagine Nashville will develop its community led-plan over the next year. First, it has hired Heart + Mind Strategies to conduct surveys over the summer to identify the “values” that will guide the process. Then, in the fall the group will begin soliciting input from Nashvillians in a variety of ways, which will likely include community events and online submissions. The priority will be making sure voices from across the city are heard and their ideas considered, Faison said.  

The co-chairs hope the end result is a plan that shows Nashville's politicians and policymakers the priorities and aspirations of the city's residents. They also will make an effort to engage the youth who will live in the Nashville of the future. Imagine Nashville will collaborate with the Civic Design Center and the Nashville Youth Design Team, they said.

Imagine Nashville will be a one-year endeavor, not a new organization, and the group's leaders hope that other nonprofits and civic groups will step forward to "own" parts of the completed plan, they said.

The whole project is anticipated to cost $1.2 million and fundraising efforts are ongoing. The Community Foundation of Middle Tennessee will hold the funds and serve as the group's fiscal sponsor.

The other 23 members of the steering committee include leaders from nonprofits and community groups, business executives, county and city officials, a pastor and a juvenile judge. 

The idea for the plan grew from conversations between members of Nashville’s Agenda, an organization of civic leaders that grew out of a similar effort launched in 1993 and funded by a grant from the HCA Foundation. The following year, Nashville’s Agenda delivered a plan it called “21 goals for the 21st Century.” 

The new plan will not be binding, but it will come during a time of transition for the city’s leadership, with no incumbent running in the upcoming mayoral election. Imagine Nashville’s leaders hope the plan that emerges from their process will help guide that transition, but also outlast any individual politician or office holder. 

More at The Tennessean here:

https://www.tennessean.com/story/news/local/davidson/2023/06/20/imagine-nashville-wants-your-help-to-guide-citys-growth/70329981007/

[PaulChinetti]

I get people asking all the time on the rental we own. I always tell them $900k. No takers so far…

[glamdring269]

On 6/19/2023 at 9:20 AM, andywildman said:

I don't know everything, but seems like a good way to counter investors banking on price growth is to build so many new homes in Nashville that the home price growth in our city slows to be less than the national average. That means less growth in value for current homeowners like myself, but it means that our city doesn't become insanely priced for normal people looking to buy, like Boise or the DC area or the west coast.

I think the problem we have now is defining normal. If a person is already in a home that they bought 'x' years ago and have built up sufficient equity to cover down payment on a new home then I guess that's fine in the current market. Where I'm concerned is for the younger generation, maybe those currently in college or recently graduated within the last 5-10 years who have not yet bought a home. How do they even get into this market? Even if you move outside of the city limits the price of a starter home can be severely limiting for most normal folks in this age range.

I'm not sure how to fix it but am certainly glad it doesn't impact us directly. We were fortunate to build our house in 2012 basically at the end of the bust and at the very beginning of the boom. Our younger family members are not so lucky. Currently renting apartments and I just don't see how they ever scrape up enough cash for a down payment in the current market. Save the cash and hope for a bust might be their only way in at this point.

[MontanaGuy]

1 hour ago, glamdring269 said:

I think the problem we have now is defining normal. If a person is already in a home that they bought 'x' years ago and have built up sufficient equity to cover down payment on a new home then I guess that's fine in the current market. Where I'm concerned is for the younger generation, maybe those currently in college or recently graduated within the last 5-10 years who have not yet bought a home. How do they even get into this market? Even if you move outside of the city limits the price of a starter home can be severely limiting for most normal folks in this age range.

I'm not sure how to fix it but am certainly glad it doesn't impact us directly. We were fortunate to build our house in 2012 basically at the end of the bust and at the very beginning of the boom. Our younger family members are not so lucky. Currently renting apartments and I just don't see how they ever scrape up enough cash for a down payment in the current market. Save the cash and hope for a bust might be their only way in at this point.

I agree completely, I didn't buy my first house until I was in my 40's because I lived in Seattle where the prices had become unaffordable.  I was able to transfer to Denver when I bought my first fixer upper house.  I bought and sold homes five more times and because of dumb luck I just happened to be in the right place at the right time and did very well.  Unfortunately I don't see any other alternative if you can't afford a home where you live other than moving to someplace cheaper.  That would be much more difficult if you have a family so it really puts millions of young people in a tough situation but I don't see any other options.

[Nash_12South]

Although the discussion has been had repeatedly, there should be a stop to allowing so many STRs to be built. 1000s of what could be ownable condos (and homes) are instead allowed to be STRs. Can rules not be put in place that no more than say 30% of any development can be STRs? And stop renewing the STR permits, or issuing new ones, for a time period, not forever. 

[MontanaGuy]

2 hours ago, Nash_12South said:

Although the discussion has been had repeatedly, there should be a stop to allowing so many STRs to be built. 1000s of what could be ownable condos (and homes) are instead allowed to be STRs. Can rules not be put in place that no more than say 30% of any development can be STRs? And stop renewing the STR permits, or issuing new ones, for a time period, not forever. 

It seems like almost all of the new downtown developments are rentals as opposed to condos.  I don't have the expertise on this subject like so many of you guys do but I guess there must be a lot more money to make if you're building rentals.  Is there anything that could be done to make the condo market more desirable to developers?

[Nash_12South]

I can't speak to the practicality of my suggestions to get more condos built but what about - Better loans to developers of condos over rentals. If a property is zoned for 200 living units, tell the developer you can have 200 rentals or we'll up it to 250 units for condos. In the building permit process, fast track condo permits while slow walking rental permits. Rental building permits would require a 90+ day "review process".  You could offer to change zoning to residential of a commercial piece of land only if condos are built (no change for rentals). I'm not against people making money, but if we want more owner occupied housing somethings have to change. 

Edited June 22, 2023 by Nash_12South

[sambo]

I read this article about the Related Companies, and they said it was easier to finance condos right now than multifamily. Obviously Miami market isn't the same as Nashville though https://commercialobserver.com/2023/06/related-group-jp-perez-nick-perez-sitdown/

 

[Hey_Hey]

On 6/19/2023 at 9:55 AM, samsonh said:

Most investors are mom and pops, not corporate entities like Blackstone or companies like American Home 4 Rent. Everyone thinks being a landlord is easy, when in reality most of these mom and pops are probably losing money on a cash flow basis. I agree that the solution is building many more homes. We need to make permitting simpler and increase the supply of labor. 

It seems the public and politicians only blame developers for price increases, but you hit on another issue that is affecting supply: permitting. I have built or renovated houses in Nashville (on a limited basis) since 2015 or so. I'm currently in the process of attempting to build a house for our family now. The permitting burden and time suck have gotten much, much worse, and codes only get more complex as time goes on. I am all for codes and permitting, but we need to understand that there is never a free lunch. If permitting or inspections slow a project down or make it more complex then there increased costs. If we update a building code and require a sidewalk to be installed there's increased cost. If inspectors can't get out to a job site for three weeks that leads to increased costs. If it takes 6 months to get a septic permit it leads to increased costs.  If it takes standing in line 8 hours to get a building permit there are increased costs.

There's a tendency to think that those issues only affect developers, but those costs of inefficiency on the government side absolutely trickle down to the resident looking to purchase or rent a residence of any type.  Our municipalities need to take a hard look at this and take action to make residential construction easier than it is now. Without doing so we are all paying a sort of tax because of that inefficiency.

[Nash_12South]

It simply gets down to money. If we want faster permitting and faster inspections, then we make the city hire more folks. But it costs, and when budgets are tight - do we not hire police or teachers and hire plans reviewers instead? I've encountered a few cities that hire third party folks for reviews, during busy times, and avoid the costs of full time employees. 

[Hey_Hey]

2 hours ago, Nash_12South said:

It simply gets down to money. If we want faster permitting and faster inspections, then we make the city hire more folks. But it costs, and when budgets are tight - do we not hire police or teachers and hire plans reviewers instead? I've encountered a few cities that hire third party folks for reviews, during busy times, and avoid the costs of full time employees. 

I would make the argument that diverting 2% of the funds earmarked for the Barnes Affordable Housing Fund toward speeding the construction of more housing would do more for overall housing affordability than the Barnes Fund does itself. The Barnes fund does a great job of producing 350-400 affordable housing units every year, but 99% of Nashville's residents won't every reap those benefits.  We need a solution for housing affordability that touches every corner of the metro area, and the best way to do that is to do everything we can to promote the delivery of additional units.   Obviously, fixing our Codes Department doesn't solve the problem, but it helps. We need to also address the issue through zoning and other avenues as well. 

Housing affordability helps (or hinders) the hiring of those other key employees as well. In my opinion, it's one of those areas that we can spend a little to save a lot. 

Edited June 22, 2023 by Hey_Hey

[gannman]

2 hours ago, Nash_12South said:

It simply gets down to money. If we want faster permitting and faster inspections, then we make the city hire more folks. But it costs, and when budgets are tight - do we not hire police or teachers and hire plans reviewers instead? I've encountered a few cities that hire third party folks for reviews, during busy times, and avoid the costs of full time employees. 

These positions already have money set aside to hire more, but if there is no affordable housing then they will continue to go unfilled.  

[smeagolsfree]

Robert Looper featured on WKRN!!!!!!!!!!!

 

5 major skyline changes expected to take shape in Nashville, TN (wkrn.com)