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As Nashville rapidly expands, residents worry the metropolis is growing too fast

The Wall Street Journal. logo The Wall Street Journal. 6/18/2018 Cameron McWhirter

NASHVILLE—Kathleen Ervin moved here 12 years ago from the Northeast, drawn to the relaxed atmosphere, green parks and relatively low cost of living.

But in the past five years, her commute time from her 1950s ranch house in the Glendale neighborhood to her job about 12 miles away has tripled on some days to 45 minutes because of increased traffic. Developers are buying nearby properties, tearing them down and building “tall skinnies”—multistory homes geared toward wealthier home buyers.

“We hear all this talk about how Nashville doesn’t want to become Houston, Nashville doesn’t want to become Atlanta,” said the 54-year-old account manager at a merchant processor. “Who is preventing that from happening?”

Anxiety about the rapid growth is widespread here, as a city known for country music also becomes known for its skyline full of cranes and traffic congestion.

Ms. Ervin blames all the new development for last year’s severe flooding of a creek in her backyard. And her latest concern: A nonprofit wants to sell about 20 acres nearby where it formerly housed foster children and youth. Part of the property sits on a floodplain.

The Nashville region population grew 45% from 2000 to 2017, reaching about 1.9 million, according to the U.S. Census Bureau. Ms. Ervin represents both sides of the city’s extraordinary growth: a transplant who was attracted to a booming urban hub, and a resident increasingly concerned that unbridled development may threaten the Tennessee capital’s charm.

“There is very little opposition in our town to growth,” said David Briley, newly elected mayor of the Metropolitan Government of Nashville and Davidson County, in an interview. “I would say there is a high level of anxiety about the pace of growth.”

Nashville’s thriving health-care, financial and tourism sectors have drawn national attention. In April, the U.S. Bureau of Labor Statistics reported the city had an unemployment rate of 2.7%—lower than any other major metro area in the U.S. From 2010 to 2016, Tennessee’s large urban areas, led by Nashville, accounted for 57% of all employment growth in the state, according to the Brookings Institution.

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In May, AllianceBernstein Holding LP announced it was moving its headquarters to Nashville from New York City. In a message to employees, the company cited lower cost of living and lower taxes as reasons for the move. In January, Amazon.com Inc. announced it narrowed its search for a second headquarters—with the potential of 50,000 jobs—to 20 cities, and Nashville made the list.

Nashville, Atlanta, Charlotte, Raleigh-Durham, Miami and other large Southern cities have become the economic powerhouses of the region, drawing more migrants from the North and Midwest. Southern metro areas make up almost 32% of the U.S. population, up from about 29% in 2000, according to the census. During the same period, the percentage of the U.S. population in metro areas of the Northeast and Midwest dropped.

As Southern cities draw more people from other regions, politicians, business leaders, economists and residents are increasingly focused on how to manage the growth to keep housing and other costs of living in line with wages.

For decades, part of the South’s appeal has been low housing costs, said Laurel Graefe, deputy regional executive of the Nashville branch of the Federal Reserve Bank of Atlanta. While corporate incentives and relatively low taxation are still drawing businesses and workers, housing demand in some places has far outstripped supply, driving up prices, she said.

Nashville area business leaders are increasingly worried about attracting and retaining workers, in part because of housing costs, Ms. Graefe said. “It’s been pretty jarring” how much the subject has come up, she said.

From 2008 to 2018, housing values, based on a weighted measure of all transactions in the housing market, rose 75% in Nashville, compared with 33% in Charlotte and 26% in Atlanta, according to the Brookings Institution.

With urbanization comes pressure on local government to improve housing affordability, workforce education and public transit, Mr. Briley said.

This spring, the Metro Nashville government and civic groups pushed for a multibillion-dollar bond plan to dramatically expand public transit in the region. Voters rejected it, and the city will have to find other ways to develop public transit.

Mark Deutschmann, president of Nashville real-estate company Village Real Estate Services and head of a development company, Core Development Services, said the local government should work with developers to build out public transit corridors and encourage developers to build more homes costing less than $200,000 to meet workforce demand.

The government has been working to manage growth, such as preserving green space and establishing a special fund to build low-income housing in the city, which spent $10 million last year, Mr. Briley said.

James Fraser, an urban studies professor at Vanderbilt University, said Nashville is in danger of becoming a “chic urban playground for the wealthy.”

He estimated the city needs about 30,000 more units of affordable housing and should spend about $1 billion to meet the demand. Working people are being pushed to outer suburbs and rely on buses to get to their jobs, while wealthier people are moving into Nashville’s inner neighborhoods, he said.

Brandon Walker, 34, who works on branding for a tire company, said in 2012 he lived in a city neighborhood and paid $875 a month to rent a three-bedroom house. Now, he pays $1,300 a month for a three-bedroom in Smyrna, Tenn., and he said his commute is “horrible.”

“I can’t afford to live in the city,” said Mr. Walker, who is African-American. Many lower-income people in gentrifying neighborhoods are leaving the city, and many traditionally black venues are closing down.

Allison Harris, 25, who is white and works as a wedding photographer with her husband, said they tried to buy a house out in the suburb of Hermitage, but the appraisal came back $30,000 above their offering. So, she said, they signed another year lease on their apartment and are “trying to save up a lot of money.”

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