Southern states spurn home builders after pandemic boom

In Gallatin, Tennessee, house prices have jumped by two-thirds since the pandemic, and one local commissioner incensed at nearby homebuilding said she “lives in hell.” So many Californians have moved to the booming state that locals fear their lefty politics migrated with them, and lawn signs target the “greedy developers” they say are swallowing up farmland. 

Tennessee and several of its neighbors in the South are facing an anti-growth backlash, after turbocharged migration helped boost the region’s population by 2.7 million people — the size of Chicago. As traffic snarls in once-sleepy downtowns, apartment complexes replace meadows and municipal water systems strain under new demand, passions are running high in a way that goes beyond regular nimbyism.

In Sumner County, where the Cumberland River snakes through the verdant hills northeast of Nashville, the economy grew by 8.5% a year from 2020 to 2022, putting it in the top 7% of all U.S. counties for growth. The number of apartments in the county seat of Gallatin almost doubled in the four years through 2022, according to property marketplace RentCafe.  

The boom — driven by transplants from blue states like New York and California — has spurred a right-wing group that marries conservative religious beliefs with restrictive policies on growth into control of the local legislative body. At a planning board meeting in May, the pressing agenda item was whether to boost minimum lot sizes in rural areas to at least 2.3 acres; big enough to ward off housing developers who need more density. 

“If you don’t, you’re going to be one big fat Nashville,” Mary Genung, a Sumner County commissioner backed by the group — the Sumner County Constitutional Republicans — told the planning board. Genung and her neighbors have for two years battled a project by homebuilding giant DR Horton Inc., which plans 675 homes on vacant land in Gallatin, population 50,000. 

“Where I live, I live in hell,” Genung said. The planning board supported the lot-size measure, bumping it up to the County Commission for a vote. DR Horton didn’t respond to a request for comment.

While not-in-my-backyard activists have long fought new developments, local officials and business groups across the South say they’ve seen a heightened level of anger since the pandemic-era growth. Arcane rules that govern issues like zoning exceptions, city annexation and impact fees, which apply levies to new construction projects intended to cover any extra infrastructure costs, are pitting cities against counties and counties against states. 

In some cases, the backlash stems from people mourning the loss of a small-town way of life. In others, public infrastructure simply can’t keep up. In Texas, city water and wastewater systems are over-stressed, while farm bureaus in Tennessee and South Carolina warn their agricultural land is being plowed over for subdivisions. 

Sumner County lost 16,000 acres of farmland from 2011 to 2022, according to the University of Tennessee Institute of Agriculture, about triple the loss of the county average in Tennessee.  

“We had a big migration of people from the Midwest and Northeast to the South, and home prices skyrocketed,” said Lesley Deutch, managing principal at real estate consultancy John Burns Research & Consulting. “Now you’re getting pushback from the people that have lived on an acre lot.”

From early 2020 to mid-2023, the Southeast, including Texas, accounted for more than two-thirds of all U.S. job growth; almost double its pre-pandemic share. Tennessee’s economy was the second-fastest growing in the U.S. from 2020 to 2023, according to the latest figures from the Bureau of Economic Analysis; it tied with Nevada and trailed only Florida. 

So many Californians alone relocated to Tennessee — more than 22,000 in 2022, by one count, lured by lower property prices and a lack of income tax — that locals say they see T-shirts and bumper stickers around town reading, “Don’t California My Tennessee.” It’s a dig at Californians’ “lefty politics,” said Jimmy Kisner, whose family has operated a hardware store in Gallatin for 47 years. “Don’t mess up what we’ve got, and don’t make our taxes go up.”

Tennessee is comfortably Republican despite the migration, with the GOP in the governor’s mansion, two U.S. Senate seats and eight of nine House seats.

Building Spree

Once the home of Johnny Cash and June Carter Cash — and, for a spell in high school, Taylor Swift — Sumner County had already been filling up fast in the decade through 2020, adding about 35,000 people, or around 18% of its 200,000-strong population. Then, a huge run-up in single-family home prices during the pandemic priced many of the county’s workers out of the market. 

The median price of a single-family home in Gallatin is now $472,000, data from Redfin Corp. show, and employers haven’t been able to pay enough to lure workers from Nashville, said Kathleen Hawkins, head of the Hendersonville Chamber of Commerce. With companies desperate for a local workforce, developers built more than 1,300 apartment units, primarily in Gallatin, from 2020 to 2022 alone, RentCafe data show.

Angry at what they saw as over-the-top development — plus a couple recent tax increases — the Sumner County Constitutional Republicans recruited and backed a slate of 14 candidates for the 24-member County Commission. They won in 2022, in an August election where just 15% of voters turned out.

Since then, along with pushing for larger lot sizes, the group has railed against city council members in Gallatin, faulting them for allowing high-density housing developments on county land. It tried unsuccessfully this year to get state legislators to support a bill barring the city from annexing land without the county’s permission.

David Klein, a prominent member of the group known for his distinctive, handlebar mustache, said he’s not anti-growth, he just wants development to pay for itself. 

“In Gallatin, they are annexing like there’s no tomorrow,” Klein said, during a spin through town in his navy blue Ford F-150. “Lots and lots of apartments, and we have to fund the schools.” 

Some business leaders in neighboring cities and communities are spooked.

“I’m slightly concerned about that group,” Gallatin’s city planner, Brian Rose, said. Gallatin needs to keep growing to attract industry, boost the tax base and pay for things like parks, Rose said. 

Randall Carter, Tennessee regional president at First National Bank, does business with many farmers in the Gallatin area and showed up at the planning commission meeting in May to oppose the bigger lot sizes. He finds it ironic that a group of staunch conservatives, who traditionally eschew regulation, are creating rules on what people can do with their land.

“You can go so far to the right that you wind up being on the left,” Carter said.

Georgia, North Carolina

More than 250 miles away in Forsyth County, Georgia, a flourishing commuter area to Atlanta’s north, a recent post on the Nextdoor social-media site showed a campaign flyer attacking the approval of 2,600 apartments. The thread drew more than 300 comments.

“Apartments are the big issue, politically,” said Cindy Jones Mills, a Forsyth County commissioner not running for reelection. Her colleague, Laura Semanson, calls herself “big corporate developers’ worst nightmare,” on her campaign website, while commissioner Alfred John boasts that there have been “zero apartments approved” in his district on his watch.

Forsyth County’s sewage-treatment capacity has struggled for years to keep up with all the people moving in, said Patrick Foster, director of watchdog group Smart Growth Forsyth County, and developers haven’t always been held accountable. 

In coastal Brunswick County, North Carolina, where the population has grown by 20,000 in just four years, county commissioners pitched a succession of requirements all at once. One required a traffic study of new projects that could delay developments by up to nine months. 

The Wilmington Chamber of Commerce and the builder-backed Business Alliance for a Sound Economy sent Brunswick County leaders a letter, warning them that they risk boosting housing prices further and scaring off employers. But it’s needed because most of Brunswick’s roads are two lanes and at or near capacity, said Jim Bradshaw, a former economic development leader in Brunswick County who’s now pushing to slow down the growth of housing development.

In the fast-growing suburbs of Texas’s major cities, some communities are putting a halt on new construction because of water constraints. Magnolia, a town of about 5,000 people northwest of Houston, put a moratorium on new residential and commercial development in late 2022. The city has extended the policy because there aren’t enough wells to keep up with development. 

“We were building too many houses too fast,” said Don Doering, city administrator for Magnolia. Doering said the city is planning to build two wells a year for the foreseeable future, at a cost of $3 million each.

About an hour south of Sumner County, in the booming Nashville suburb of Murfreesboro, Rutherford County Mayor Joe Carr is battling with the Tennessee General Assembly to levy impact fees — which can run to thousands of dollars — on new developments. The local school system is struggling to keep up with the 1,200 new students moving in every year, and traffic is so bad that locals have learned not to turn left, Carr said, only half joking.

For now, bills in the General Assembly to let Rutherford County levy the fees have stalled. Carr chalks it up to the influence of real estate developers.

“I’m not looking for a fight, but I won’t shy away from one either,” Carr said.