Updated: Mar 21, 2022
The Nashville Area Chamber of Commerce has released this year's Vital Signs. The annual report provides a look into the issues affecting the region's quality of life and economic well-being. Through its survey tool it also identifies some of the major concerns of the region's residents. This year the report focuses on the "lack of available, qualified workforce and the barriers that Middle Tennesseans face in joining the labor force and finding work." Housing, along with childcare and transportation, are the barriers explored in the report.
The region's residents are feeling the pressure Spending more than 30 percent of your income on housing means you are experiencing a "housing cost burden." It is no surprise that many in our region are feeling this pressure. According to the Vital Signs survey, 42 percent of the region are cost burdened, a five percent increase from the 2020 Vital Signs survey.
The burden is not felt evenly. Those with lower incomes are paying a higher percentage of their income, with 61.5 percent of those making $25,000 or less paying more than 30 percent of their income on housing. Minority populations too are more cost burdened.
Housing prices outpace income
Housing costs continue to rise. In 2020 the median condominium price was $244,900, a year later it had increased 21.7 percent to $298,050. Single-family home prices increased 21.4 percent, with the median home price being $425,000 in 2021. Rents too have risen. While Vital Signs reports a 5 percent increase in average median rent for the region, it is important to point out that regional numbers can hide significant changes in some areas. For example, a recent Zillow report showed a 18.9 percent increase in Nashville's median rent over the year.
The increases in housing costs are significant especially when compared to average household income. As the chart above shows, average household income rose 18 percent between 2015 and 2020, while the median housing cost rose 46 percent.
We need more housing
Our region has a housing supply problem. "Unless the supply of housing in Middle Tennessee is significantly increased, the issue of housing costs outpacing median household income could be exacerbated by Middle Tennessee’s future growth." But, as Vital Signs goes on to point out, simply building more units will not fix the issue. We must build housing that is attainable for lower-income residents, provides a range of housing types, and offers good access to employment centers and transit.