Special Briefing by Volcker Alliance and Penn IUR highlights challenges, opportunity that comes with growth

Across the nation, many cities and counties are experiencing a population boom and unprecedented precedented growth not seen in recent history. In the last two decades, for example, Austin, Tx.’s population has more than doubled. Combined, Florida and Texas added 1 million people last year. And Atlanta, Ga.’s metro area is projected to grow by 1.8 million people by 2050.

“This growth presents enormous opportunity, but also challenges,” said William Glasgall, senior director of public finance at the Volcker Alliance, noting the 10 fastest growing counties in 2022 were “all southern and western.” He was co-hosting an online panel discussion with local, county, and regional administrators Thursday alongside Susan Wachter, co-director of the Penn Institute for Urban Research, called “Special Briefing: Managing Growth in America’s Hottest States, Counties & Cities.”

Chief among the challenges highlighted by the panelists is the cost of real estate. 

“At the risk of sounding like a broken record, another significant challenge in our region is housing,” said Anna Roach, chief executive officer and executive director for the Atlanta Regional Commission. “Apartments are booming in places like midtown and along our world famous and world class beltline. Our ex-burbs, suburbs, are booming as well.”

There’s no easy solution to the problem, even though there are a lot of reasons pushing local and county governments to bolster regional housing stock. For one, county governments are primarily funded by property taxes, according Matthew Chase, chief executive officer and executive director for the National Association of Counties. Because of this, “we like new houses,” he continued. “We certainly have the incentive to try and build new units.”

Incentive isn’t the issue—many regions simply can’t keep up with demand. The implications are profound. Lack of affordable housing could slow growth in the long term and prevent communities from economically capitalizing on the influx of residents.

“We built more houses per capita than any city in America and it still wasn’t enough,” said Steve Adler, former mayor of Austin, Tx. Among other problems that stem from a high real estate prices, unaffordable cost of living coincides with homelessness and “leads to gentrification, it leads to displacement.”

As city centers expand, this is forcing lower earning residents including younger workers to move further from their workplaces. Streamlining regional transportation is one way to alleviate this pressure—but that requires a “structural change,” which is complicated by state and local laws, according to Adler. 

“What we know is that you just can’t build roads and build your way out of this challenge, because it induces demand,” he said. In the short term, “it’s going to help with congestion but also induce demand.” In corrolation, property prices “are going to bloom, because now people can get to downtown in 20 minutes.” In a few years, the roads will be full again. Rather than building more infrastructure, addressing affordability begins with smart policy decisions.

“It’s basically a land use question: Changing your code so you can build taller and more densely in places where (constituents) are not used to,” he said.

Investing in public transportation poses another possible solution. In the Dallas County, Tx., County Administrator Darryl Martin said his organization created a bus loop to connect outside neighborhoods with the region’s inland port area, which is currently booming.

“We just can’t build housing fast enough,” Martin said. “We have to be creative to go and find the people and bring them to the jobs, which we’re trying to do.”

Among other challenges that come with growth discussed by panelists, preparing residents for future demographic change is another aspect administrators must prioritize, according to Roach. For example, the Atlanta region’s Asian and Hispanic population is projected to double in the coming decade. If administrators don’t “prepare neighborhoods and populations to absorb that growth and accept (new) people, it won’t be sustainable,” she said. 

The impact of climate change amid population growth was also noted.

“We had record droughts and record floods. We had a city that had many parts with power off for more than a week,” Adler said, highlighting the Austin’s effectiveness thus far in reducing consumption. “As our population goes up, our energy usage is going down, our water use is going down.”

Alex Adams, Idaho’s budget director, described the challenge his state has faced in balancing immediate financial with expected future costs. 

“Certainly, there are a lot of opportunities and challenges as everyone here has noted. We’ve seen revenue booming,” said Adams. Idaho has been simultaneously working to “catch up” on deferred maintenance “and prepare for that future growth.” While difficult to navigate from an administrative perspective, the growth has been beneficial for residents.

A few years ago, the state had a $600 million backlog of deficient bridges. Enabled by a revenue surplus, administrators invested $400 million to bridge maintenance and reduced the backlog by two-thirds in two years. And they’re working to enact more positive change in coming years, and not just in fixing deficient bridges.

Education has been another focus for administrators. Historically, Idaho has ranked among the lowest states for teacher pay. Through a $300 million investment with a heavy emphasis on bolstering pay rates, “We’re going from the bottom 10 in teacher pay to targeting the top 10 in teacher pay,” Adams said.

For more information and to view the Special Briefing webinar, visit the Volcker Alliance’s website.