Newly Arrived Californians Getting Blamed For Worsening This Sunbelt City's Homeless Crisis

Many Sunbelt cities have been experiencing an influx of new residents from California and Nashville, Tennessee is one of them. One of the effects of Nashville's newfound popularity is a surge in property values, but they're going up so quickly that the city's homeless population has exploded. Some longtime Nashville residents think the new arrivals from California are primarily to blame.

It's worth noting that Nashville is hardly the only city in the country dealing with an uptick in homelessness and a housing affordability problem. Nashville's homeless population is estimated to be 1,525, nearly double last year's tally of 863. Nashville's population is roughly 700,000, and its metropolitan area includes another 600,000 people.

One thousand five hundred twenty-five homeless people are a minuscule number by comparison, but the city's estimated rate of "chronic homelessness" has increased by 78%. That means a majority of the city's homeless are likely to remain homeless. It's a concern, and that's why many Nashville residents are sounding the alarm. They would rather not wait for the problem to reach the levels seen in Los Angeles or New York.

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But are the new arrivals from California really to blame? There is no doubt that large numbers of California residents moving into an area often result in an uptick in property values. The simple reason is that when Californians move, they typically choose places with lower home values and living costs. Many have cashed out on expensive homes, giving them tremendous buying power.

Even the ones who weren't homeowners were used to paying California's notoriously high rents. Now, remote work allows them to earn California wages and live in a comparatively less expensive city like Nashville. The inevitable result of that is a surge in real estate values. However, a closer look at Nashville reveals some interesting trends.

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A recent real estate data firm Zumper study shows Nashville's average apartment vacancy rate is 10.8%, a 20-year high. Although the survey indicated rents are down by 4% compared to last year, the decrease follows a 20.8% increase in 2022 and a 14.6% increase in 2023. That's a net increase of nearly 30%, which would certainly account for many longtime Nashville residents’ sticker shock.

That's a big win for Nashville landlords and property owners. Still, it's also a gut punch for Nashville residents whose incomes haven't risen quickly or who don't have the luxury of earning California wages via remote work. However, it's also fair to note that the influx of residents to Nashville isn't just coming from California. Nashville's affordable property and moderate weather are draws for many people.

New Yorkers, Chicagoans, Bostonians, and people from as far away as Seattle are all looking for a place to live a good life and maximize the value of their hard-earned money. Nashville ticks off many of those boxes, and in that sense, it has become a victim of its success. People are moving there in large numbers because it's a nice place to live.

That's the same thing that drew people to California for several decades. What Nashville is experiencing is a normal part of the real estate cycle. Nashville’s challenge is managing that success without leaving citizens behind. It's doubtful Nashville would be better off if it were someplace nobody wanted to move to. Blaming Californians for the downside of success seems a bit unfair.

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