Writer: Eleana Teran
Regional Review is a year-end series from caa that looks at key developments in a focused industry throughout the year and sets the stage for what’s to come in the near term.
December 2025 — Nashville infrastructure entered a defining year as major projects moved forward and transit planning gained speed. Rising costs and continued population growth intensified pressure across the region, pushing agencies to keep mobility aligned with Middle Tennessee’s expansion.
Join us at caa’s upcoming leadership summits! These premier events bring together hundreds of public and private sector leaders to discuss the challenges and opportunities for businesses and investors. Find the next summit in a city near you!
“We want to ensure every community has the infrastructure, sites, and quality-of-life assets to attract and retain companies,” said Lyndi Berrones, assistant commissioner for strategic initiatives at the Tennessee Department of Economic & Community Development, to Invest:.
Greater Nashville continues to grow faster than the nation. Between 2020 and 2024, the region added more than 136,000 residents, a 6.4% increase that pushed the metro past 2 million people. That pace outstripped the country’s overall 2.6% growth over the same period.
That growth is already straining the region’s transportation network. Recent reports show the metro added more than 30,000 residents in a single year, driving congestion higher and stretching daily commutes beyond typical travel times. In some cases, routine trips have expanded dramatically; the 80-mile drive between Clarksville and Murfreesboro can take up to three hours due to traffic delays.
These pressures point toward a key milestone achieved in November 2024, when Nashville voters approved the Choose How You Move referendum, establishing a dedicated half-cent sales tax for transit investments.
“The half-cent sales tax will fund improved service delivery, extended hours, more frequent service, additional routes, and new transit centers,” Tom Turner, president and CEO of Nashville Downtown Partnership, told Invest:. “There’s funding for sidewalks, safer walking conditions, and multimodal lanes to support biking and other forms of movement. So we’ll gradually see more pedestrians, more bicycles, and more buses. What many people are eager to see is the modernization of our traffic signal network. Upgrading that technology will have a major impact.”
One year later, city officials have begun channeling that revenue into planning and early design work for expanded bus service, improved sidewalks, and upgraded signals along property corridors. The initiative marks Nashville’s first sustainable funding mechanism for public transit and a turning point in how the region approaches growth management.
Tracking progress and challenges
Since its approval, the plan’s implementation has advanced through incremental but visible steps. Collections for the program began in February 2025, and by July the surcharge had already generated about $68 million, exceeding the administration’s early estimate. An October 2025 announcement from the mayor’s office confirmed more than $100 million committed to capital projects, including signal upgrades and sidewalk installations on high-traffic corridors.
A follow-up release marking the program’s first anniversary outlined roughly $163 million in projects in active or completed work, such as the new queue-jump lane for buses on Murfreesboro Pike and a free-fare pilot for eligible residents.
While implementation is underway, the region remains under significant cost pressure that continues to complicate budgets and timelines.
During the first half of the year, construction firms across Nashville reported rising costs tied to imported steel, aluminum, lumber and fasteners. One contractor estimated certain materials had increased between 30% to 50%.
The ripple effects extend well beyond raw materials. RLB Construction’s 1Q25 report, found the national average cost of construction rose 4.35% year-over-year, down from 5.86% the year prior. By the third quarter, the firm’s updated analysis suggested that although materials and labor remained key headwinds, cost escalation had begun to moderate across most U.S. markets.
Similarly, Cushman & Wakefield’s September 2025 review estimated that tariff-driven inputs could add about 9% to materials costs and 4.6% to total project expenses. With the Choose How You Move revenue still in early development and high-demand corridors competing for resources, Metro officials are expected to adopt phasing strategies and more granular procurement controls rather than assuming uniform delivery across all zones at once.
Private innovation meets public need
Alongside public investments, private-sector innovations are shaping how Nashville addresses mobility and congestion. Earlier this year, the State of Tennessee and The Boring Company unveiled plans for the Music City Loop, a privately funded, zero-emissions underground transit system that will connect downtown Nashville and the Convention Center to Nashville International Airport (BNA). The 10-mile system will be built under state-owned roadways, currently under design stage and expected to open at the beginning of 2027.
The partnership represents a landmark step for the state, positioning Nashville as the first city outside of Nevada to move forward with an operational Loop system. The state emphasized that the project will be entirely privately funded, requiring no taxpayer dollars, and will comply with NFPA-130 fire and life-safety standards. Gov. Bill Lee described the collaboration as an example of responsible innovation that advances mobility and economic growth without relying on public funds.
Connecting growth and competitiveness
Transportation investment continues to shape Tennessee’s economic outlook, influencing how the state competes for business and talent. Improved mobility and airport access are reinforcing the region’s appeal to global investors, while new infrastructure strengthens its logistical and workforce advantages.
Berrones explained to Invest:, Nashville’s growing connectivity is expanding its global reach. Over the past year, new direct flights from Nashville to Iceland and Dublin have positioned the city as a more accessible gateway for transatlantic business. The state is now focused on a direct route to Asia, a priority driven by its growing network of Japanese and Korean companies.
Those relationships are part of a much larger pattern. Since Gov. Lee took office in 2019, roughly 40% of all capital investment in the state has come from foreign-based companies. Tennessee is home to more than 1,000 international firms representing $49 billion in capital and employing over 160,000 workers statewide. The state has representatives in Germany, Japan, Korea, Italy, and the U.K., which play a central role in attracting new projects and supporting expansions.
That outreach has paid off in transformative ways. In Clarksville, global manufacturers such as Hankook Tire, LG Electronics, Shinhung Global, Dongwha Electrolyte and LG Chem have transformed the region into a hub for advanced industry.
“Growth starts with a business-friendly state. Tennessee benefits from a strategic confluence of interstates, and our housing remains affordable compared to the rest of the country,” said Buck Dellinger, president and CEO of the Clarksville-Montgomery County Economic Development Council.
France’s Orano, which is developing a multi-billion-dollar nuclear facility in Oak Ridge, and companies like Kewpie from Japan and Craig Manufacturing from Canada expanding in the region, are examples of how international firms are not just investing in Tennessee but making it home.
As those projects accelerate, the state is also addressing foundational infrastructure gaps that determine where and how companies invest. “Power, water, and sewer are also critical. Companies won’t invest in a site, much less a community, if it can’t meet their future needs. That’s why we invest through CDBG and site development grants to help communities build out their infrastructure for sustainable growth,” said Berrones. “Transportation is another key factor. Beyond roads and highways, we’re focused on global connectivity.”
Want more? Read the Invest: Nashville report.
Subscribe to Our Newsletters
"*" indicates required fields
