Writer: Keaona Gray-Outlaw
2 min read March 2022 — Housing affordability in Nashville, ranked as one of the nation’s Top 10 hottest housing markets, is a key issue. If left unaddressed, the area could experience a 50,000-unit affordable housing shortage by 2030.
According to Zillow, Nashville is expected to be the sixth-hottest housing market in the country for 2022. It is predicted that national home values will grow by 14.3% in 2022, while Nashville’s home values are expected to appreciate at an even faster rate.
In February of 2019, the median home price in Middle Tennessee was just under $295,000. As of February 2022, the median price has risen to over $446,000, an increase of more than 50%. At the same time, inventory has shrunk significantly.
On the rental side, data varies across sources, but the consensus is that rental prices have increased in the range of 20 to 30% since last year. Approximately half of Nashville’s households are renter-occupied, according to rentcafe.
The National Association of Realtors estimated that total home valuation across the country rose by $8.1 trillion from the first quarter of 2020 through the end of 2021. There are more than 400,000 fewer homes available for sale for residents with an income of $75,000 to $100,000 when comparing data from the start of the pandemic.
The economic expansion in Nashville combined with underlying national housing trends has increased housing costs more quickly than incomes, causing distress for many long-time residents. Single residents and families will need additional income to meet cost-of-living increases, otherwise they may be forced out of the area.
President and CEO of The Housing Fund Marshall Crawford spoke with Invest:, saying the community not only needs to move aggressively but also with intention. He emphasized the significance of prioritizing affordability, an issue that will take time as well as robust collaboration with public and private entities to solve. “Have we accomplished what we wanted to accomplish? No. Are we making efforts to achieve our goals? Absolutely,” said Crawford.
The Housing Fund has been able to help over 3,900 first-time homebuyers receive over $29 million in down payment assistance loans since 1996. In addition, it has distributed funding to organizations to provide assistance for the purchasing, rehabilitation and construction of homes in the Nashville community.
With a similar mission in mind, local nonprofit Samaritan Recovery Community has partnered with Holladay Ventures and Evergreen Real Estate to create Shelby House, a redevelopment project. This project includes 484 affordable housing units along with a 71,000 square-foot recovery services center for the nonprofit.
Although these initiatives and developments aim to mitigate affordability issues, more is needed to adequately address the problem and avoid the forecasted 50,000-unit affordable housing shortage by 2030. “The outlook for the next three to five years is tough but promising because this issue is getting the attention and resources it needs,” Crawford said.