Special Briefing: America's Hottest States & Cities: Managing Growth

Explosive Growth Brings New Challenges for States, Cities, Counties

• Officials grapple with housing affordability, transportation needs
• "Culture wars" between cities and legislatures heat up over control of revenues
• Dallas County sues Texas over mental health services for growing jails
• Atlanta faces population influx the size of metropolitan Nashville
• Idaho's growth increases need for "farsighted financial stewardship"

The fastest growing US cities, counties, and states are benefiting and facing challenges from rapidly expanding populations, according to panelists at a Special Briefing hosted by the Volcker Alliance and Penn Institute for Urban Research.

Population growth, much of it in southern and western states, is jacking up demand and raising investment needs for everything from affordable housing and infrastructure improvements to schools, jails, and mental health services, panelists said. “Explosive growth is expensive,” Matthew D. Chase, chief executive officer and executive director, National Association of Counties, said during the April 27 program on managing growth in America’s hottest states, counties, and cities. “There’s often more revenue,” he said, but “we’re having more and more resident demand and expectations for public services.”

Moderated by William Glasgall, Volcker Alliance senior director, public finance, and Penn IUR fellow, and Susan Wachter, co-director of Penn IUR, the briefing was the forty-first in a series of sixty-minute online conversations featuring experts from the national research networks of the Volcker Alliance and Penn IUR, along with other leading academics, economists, and federal, state, and local leaders.

In addition to Chase, panelists included Steve Adler, former mayor, Austin, Texas; Alex Adams, budget director, Idaho; Darryl Martin, county administrator, Dallas County, Texas; and Anna Roach, chief executive officer and executive director, Atlanta Regional Commission.

Austin, where the population has grown 22 percent since 2020, to 964,000, is an example of municipalities straining to meet some of the demands of growth, Adler said.

“Cities are both benefiting from that population increase and being challenged by it,” said Adler, a Democrat who finished his second mayoral term this year. “Austin is one of the extreme examples of that.”

Chief among the challenges Austin has faced, he said, are rising housing prices and associated challenges of gentrification, displacement, and homelessness. “We built more houses per capita last year than any other city in the country and it still wasn’t enough,” he said.

Adler said Austin in 2016 sold $720 million in transportation infrastructure bonds, and later approved an almost 20 percent increase in property taxes to help pay for $25 billion of transportation projects. The city is working on climate change initiatives and infrastructure, he said but is getting pushback from lawmakers in the Republican-dominated state legislature, who he said are putting limitations on the revenue that cities, many, such as Austin, run by Democratic mayors, can raise. “We’re in the middle of the culture wars,” he said.

In Dallas County, the city’s population has slipped recently even as suburban areas have grown. Yet the nation’s ninth-biggest city is still the hub of great entertainment, large employers, and cultural activity, Martin said. This places “real increased strain and burdens on our infrastructure and services.”

While Dallas County has made progress in reducing crime and homelessness, it still faces a housing affordability crisis, he said, as the median home price has doubled in the last decade and rents soared by about 30 percent in the last two years. The county devoted American Rescue Plan Act funds to the development of 2,000 affordable housing units, he said. “It’s not nearly enough but it’s what we could afford to do.”

The county also faces a rising need for mental health services, exacerbated by COVID-19, and recently sued the state to provide such care to county jail inmates, Martin said.

Almost 800 miles to the east of Dallas, the Atlanta Regional Commission projects an increase of 1.8 million in population by 2050, the equivalent of the entire Nashville metropolitan area migrating to Georgia’s capital region, Roach said. The commission is focusing on access to infrastructure, equity for growing minority communities, and how emerging technology such as artificial intelligence will affect development, she said.

Idaho, the fastest growing state since 2010, has enjoyed revenue growth of about 5.7 percent a year over the past decade, paced by revenue increases of 24 percent in 2021 and 2022 as federal pandemic aid flooded the nation. Said Adams: “The challenge that comes with that is trying to have farsighted financial stewardship and look down the road and structure a budget that will balance over time. What our approach has been is to assume that a lot of it is onetime in nature.”

Adams said Idaho forecasts about $5.5 billion of ongoing annual revenue and has planned for ongoing expenses of about $5.1 billion. “We’ve kept an operating gap as a cushion for uncertainty if things continue to slow down.”