RESEARCH

To explore our interactive zoning map of Middle Tennessee, click here.

It seems not a day goes by without another news story showcasing how housing is becoming unaffordable, especially in Tennessee. And it’s not surprising. In 2020, Tennessee became the number one state for in-migration for the first time, according to U-Haul.₁ Ever since, the Volunteer State has remained in the top six, with homes selling in Nashville in an average of 10 days.₂ Some estimates place Tennessee as one of the states with the fastest-rising home prices in the nation; a recent report from Florida Atlantic University shows Tennessee’s housing market is the third-fastest growing, after Florida and Arizona.₃

And the growth hasn’t slowed, despite rising interest rates and inflation. In fact, PricewaterhouseCoopers forecasted that the Middle Tennessee area will remain the number one real estate market in 2023, while a recent report by Metro Nashville estimates the city alone needs nearly 54,000 new housing units by 2030.₄

But it’s not just would-be homeowners who are suffering; it’s also renters, as rates have risen more than 20 percent in only one year.₅ These rapidly rising rents can force many to leave their communities and move farther away from their places of work to afford their rent. In fact, while Middle Tennessee continues to boom, recent census data shows that Nashville proper experienced the 12th-largest population decline in the entire country in 2021, and was one of only 12 cities that lost more than 10,000 people, along with Portland, Boston, Chicago, San Francisco, and New York.₆ Many people are starting to blame real estate investment trusts, or REITS, for buying up the housing stock, even in more affordable suburbs.

But few Tennesseans realize that the biggest factor limiting where and how many homes can be built, leading to higher housing costs, is zoning by local governments. 

While some may think zoning is the same thing as city planning, zoning is merely one tool city planners use to regulate density and what can you do on private land; nothing more, nothing less. First implemented in California in the early 20th century, zoning determines whether a property owner can build apartments in one neighborhood or not, the minimum size of a house, how big a lot must be, or whether a property owner can build an in-law suite (also known as an additional dwelling unit, or ADU) in the back yard for an elderly family member. These restrictions arbitrarily limit the supply of housing and artificially increase costs. For example, Nashville only allows apartments on roughly 11 percent of zoned land, dramatically limiting density and options for lower-income residents. 

The Tennessee Zoning Atlas uses standardized methodology created by the National Zoning Atlas to study, analyze, and calculate how local governments in Davidson, Williamson, Maury, Rutherford, Wilson, and Sumner counties treat different types of housing. We chose to first focus on these communities in Middle Tennessee because they are among the fastest-growing counties in the state, let alone the country, all with populations over 100,000. 

The Tennessee Zoning Atlas shows how local government zoning policies make housing unaffordable and worsen Middle Tennessee’s housing shortage, often at the expense of low- and middle-income families. The Tennessee Zoning Atlas highlights the need to reform strict local government zoning regulations with pro-housing reforms that make it easier for property owners and builders to respond to the growing needs of our community. Some key findings include: 

• In Middle Tennessee, most of the land is for non-residential purposes or solely single-family housing as more affordable options like two-family housing (duplexes) are banned on nearly 59 percent of land and 3+ family housing (multi-family) is banned on nearly 94 percent of land. 
• Of the jurisdictions studied, land zoned by Maury County allowed “affordable housing” (at least two-family housing) the most, with nearly 96 percent of land eligible for affordable style housing, with Forest Hills and Sumner County as the lowest, not allowing two-or-more family housing anywhere.
• Other forms of housing that could be options for low-income individuals or families, like ADUs, are often outright banned. Of the cities studied, Mt. Pleasant welcomed ADUs the most, with ADUs allowed on 100 percent of land, and Westmoreland the least, where ADUs are completely prohibited. 
• However, ADUs are often limited to family members and cannot be rented by the public. In fact, while nearly 58 percent of land in Middle Tennessee may allow an ADU, an ADU can only be rented to non-family members in 34 percent of Middle Tennessee.

Societal Costs

These zoning restrictions not only impact individual families looking for affordable places to live but inflict massive costs on society. Studies show how restrictive zoning requirements have forced cities to continue developing further into the countryside—creating longer commutes, increased traffic, lowered productivity, and job relocations not based on opportunities, but on housing costs. One study found that after adjusting for inflation, downstream consequences of zoning have robbed Americans of about $1.6 trillion in estimated wages per year.₇ If only three cities reformed their zoning codes, the average American’s income would rise eight percent—a nice pay raise in a time of high inflation.₈ By reforming these restrictive zoning regulations, we can increase the prosperity of everyday Tennesseans. 

Comparisons of Zoning in Middle Tennessee 

Percentage of Zoned Land That Allows Housing Type by County

In Middle Tennessee’s largest counties, duplexes and multi-family housing is largely prohibited, limiting housing supply and ultimately driving up housing prices. 

Most and Least Welcoming Cities for Affordable Housing

Explore the Atlas

Click here to explore the interactive Tennessee Zoning Atlas Map.

Conclusion

Born in California in the early 20th century, zoning laws are land-use restrictions local governments use to control population density and the ways private property is used. While the idea of protecting neighborhoods may be a worthy goal of zoning advocates today, over time, zoning has led to unintended consequences that have robbed us all of wealth and our property rights. Primarily, arbitrary and burdensome zoning regulations artificially drive up housing costs by restricting the supply of new homes, especially more affordable smaller homes or multi-family development—harming lower- and middle-income families the most. 

With Tennessee, and Middle Tennessee specifically, experiencing large in-migration as people flee high-tax states, zoning exacerbates the problems that have led to record housing cost increases. While there is understandably a concern over affordable housing in Middle Tennessee, the cause of this affordable housing crisis is often misplaced. Only through reforming the arbitrary red tape of zoning codes can we solve this government-created crisis. 

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₁ Jeff Lockridge and Sebastien Reyes, “2020 Migration Trends: U-Haul Ranks 50 States by Migration Growth.” U-Haul. January 4, 2021. https://www.uhaul.com/Articles/About/2020-Migration-Trends-U-Haul-Ranks-50-States-By-Migration-Growth-22746/. 

₂ Jeff Lockridge and Sebastie n Reyes, “U-Haul Growth States of 2022: Texas, Florida Top List Again.” U-Haul. January 3, 2023. https://www.uhaul.com/Articles/About/U-Haul-Growth-States-Of-2022-Texas-Florida-Top-List-Again-28337; Erica Francis, “Stronger, more stable housing market coming to Nashville, experts say.” WKRN.com. September 22, 2021. https://www.wkrn.com/news/stronger-more-stable-housing-market-coming-to-nashville-experts-say. 

₃ Jon Styf, “Report: Nashville and Knoxville housing markets are some of nation’s most overpriced.” The Center Square. June 7, 2022. https://www.thecentersquare.com/tennessee/report-nashville-and-knoxville-housing-markets-are-some-of-the-nations-most-overpriced/article_561c2054-e69e-11ec-a2b9-fff61b79e963.html.  

₄ Byron Carlock, Jr., Brian Ness, Steven Weisenburger, and Andrew Warren. “Emerging Trends in Real Estate 2023.” https://www.pwc.com/us/en/industries/financial-services/asset-wealth-management/real-estate/emerging-trends-in-real-estate.html; “Affordable Housing Task Force Report.” Affordable Housing Task Force Metro Nashville. June 8, 2021. https://www.nashville.gov/sites/default/files/2021-06/Affordable-Housing-Task-Force-Report-2021.pdf. 

₅ Arcella Martin, “Asking rents are on the rise across the greater Nashville area. And so are renewal rates.” The Tennessean. April 13, 2022. https://www.tennessean.com/story/money/2022/04/14/rising-asking-rents-and-renewal-offers-leave-tenants-difficult-spot/9488600002/. 

₆ Ron Shultis, “Fleeing Nashville: Nashville’s Population Exodus.” Beacon Center of Tennessee. May 31, 2022. https://www.beacontn.org/fleeing-nashville-nashvilles-population-exodus/. 

₇ Chang-Tai Hsich and Enrico Moretti, “Housing Constraints and Spatial Misallocations.” American Economic Journal: Macroeconomics 11, no.2. April 2019.

₈ Gilles Duranton and Diego Puga, “Urban Growth and Its Aggregate Implications.” NBER Working Paper Series. December 2019. https://www.nber.org/system/files/working_papers/w26591/w26591.pdf.