Chattanooga is no boom town, according to recent data, and maintaining average growth isn’t the goal of those leading the area’s economic development efforts.
“Here is the risk,” Charles Wood, interim head of the Chattanooga Area Chamber of Commerce, said in an interview Wednesday. “If we go into a downturn, we are that much more likely to feel it. Growing at a faster pace, we can take that impact.”
Gassing growth will require the city and county to continue competing for companies with tax incentives, but improving the local workforce and building housing are also essential ingredients, according to Wood.
Existing employers continue to say that they cannot find enough workers, and many potential employers considering a move to the area cite concerns with public schools and limited talent, which the chamber is working to address in several ways:
– Public schools: Despite being relatively silent about public school needs for much of its modern history, the chamber’s leaders will continue to remain deeply engaged in the trajectory of local public schools. After the watershed 2015 Chattanooga 2.0 report revealed few locals were qualified to take existing jobs, the chamber backed a failed effort to increase property taxes for schools and began recruiting businesses to sponsor training programs at local schools called future-ready institutes. Such work-based learning should expand, said Wood, who expects the chamber to back school leaders’ strategic plan.
– Attracting workers: “We also need people from outside the market,” Wood said. If Chattanooga can lure a cluster of talented software engineers, for example, that talent pool can be used to attract companies. “That could look like building out marketing programs for the Georgia Techs of the world. It can also be marketing campaigns around remote workers,” he said.
– Research hub: Several of the peer cities beating Chattanooga in population and employment growth, such as Knoxville, have sizable universities and research centers, and so growing the enrollment and prominence of the University of Tennessee at Chattanooga is an important factor in the area’s overall development. In 2021 university research and development spending in Knoxville amounted to $316.3 million, while Chattanooga lags behind all its chamber-identified peers with $12.1 million in research and development spending.
– Education boost: Wood said the chamber will also be looking to leverage economic development deals to benefit public schools, an approach strongly advocated in recent months by Hamilton County Mayor Weston Wamp.
HOUSING COMPONENT
The housing deficit is another factor governing growth and a problem the chamber plans to address more aggressively.
– Housing supply: While the lack of affordable housing has been widely discussed, the limited supply of even market-rate housing is as big an issue. “You will see the chamber in an encouraging and championing role for residential development,” Wood said. This could mean advocating for zoning changes or a policy shift in the permitting process.
– McDonald Farm: One opportunity could come through McDonald Farm, a recent $16 million purchase by the county in Sale Creek. “If sewer is going to be extended, could it extend even further? That opens up a part of the county that hasn’t seen residential growth and can act as a release valve for what is happening in Collegedale and Ooltewah. You have folks in those communities saying we are growing too fast, and in some places, we might be,” Wood said.
– Rental regulations: Another way to make more single-family homes available for current and future residents is by better regulating the growing presence of short-term vacation rentals, Chattanooga Mayor Tim Kelly said in an interview about the area’s middling growth. “Property values went way up, over population growth,” he said. “That is why we want short-term vacation rental regulations. We had a huge number of people buying up property speculatively … Chattanooga looked cheap relative to Atlanta and Nashville.”
Though the “bigger is better” mentality pervades among chamber officials and elected leaders, there are also those who argue lukewarm growth is far healthier for communities in the long run.
One leading academic contrarian, Rutgers University economist Paul Gottlieb, has long argued metro areas with slow or stable growth have greater economic prosperity. Wealth builders, according to his research, are places with below-average increases in population and above-average increases in per capita income. On the other hand, Gottlieb found population magnets performed below average at increasing per capita income.
With that in mind, the fact that Chattanooga’s population grew 16.6% between 2000 and 2020, below its peer group median of 23.2%, looks less concerning when considering the additional fact that Chattanooga’s median family income in the same time period increased by 2%, while most peers identified through an ongoing study with the Federal Reserve Bank of Chicago saw their median family income fall.
Contact Joan McClane at jmcclane@timesfreepress.com or 423-757-6601.