I recently read an interesting statistic that astounded me—the economic output of just six southern states surpassed that of the entire Northeast. Initially, I thought this was a very recent phenomenon, but it occurred for the first time in 2021, and the gap has expanded. In 2022, these six states - Florida, Georgia, North Carolina, South Carolina, Tennessee, and Texas - contributed 23.8% of the national Gross Domestic Product (GDP), and the 11 states from Maryland to Maine, along with Washington, D.C. contributed 22.4%.
While it’s no coincidence that the passing of the economic baton occurred after the onset of the COVID-19 pandemic, the results are not surprising when looking at decades of population shifts. In 1950, the northeast states (and DC) mentioned above comprised 28% of the U.S. population, while the six southern states had 16%. However, by 1996, the aggregate population of the six southern states exceeded that of the northeast states. In 2022, the southern states had 26% of the population, and the northeast states had 19% - an almost complete reversal from 1950.
Data from the Census Bureau compiled by the National Association of Realtors (NAR) backs up the long-term population shift with recent state-to-state migration patterns. Six southern states are included out of the top 10 states with positive net migration in 2022. The only northeast state in the top 10 was Connecticut.
Out of the top 10 states with negative net migration, five are in the Northeast: New York, New Jersey, Maryland, Massachusetts, and Pennsylvania. Of note, New York is second only to California in net migration, with 244,000 more people leaving than arriving, which could explain why migration to Connecticut is fairly strong.
Hot Cities
The warmer weather undoubtedly plays a role in why people move to the South from the Northeast, as does the quality of life. While state tax and regulatory policies help contribute to growth, certain cities have that “it factor” when it comes to attracting new residents.
The largest southern cities in the six powerhouse states are in descending order: Houston, San Antonio, Dallas, Austin, Jacksonville, Fort Worth, and Charlotte. According to the Census, these cities are all currently on the list of 2022 top 15 most populous U.S. cities. The following smaller southern cities are also growing rapidly: Georgetown, Kyle, Leander, Little Elm, Conroe, and New Braunfels, TX; and North Port, Cape Coral, and Port St. Lucie, FL, all making the top 15 fastest-growing cities with at least 50,000 residents. Most of the TX cities are near Austin, which is a testament to the attractiveness of the overall Austin metro area.
Although they aren’t at the top of the total population or fastest-growing lists, the following southern cities have been highly rated for their vibrancy and quality of life: Asheville, Charleston, Nashville, Savannah, and Tampa. Their defining characteristics range from coastal charm and live music meccas to mountain vistas and burgeoning art scenes. These cities are more likely to attract smaller numbers of residents but higher-income and more entrepreneurial-minded ones who can work anywhere.
Implications
While these shifts are fascinating from an economic perspective and a great lesson in the changing nature of demographics, what impact does it have on new courthouse construction?
Strong population and economic growth are good problems to have. But whether or not a new courthouse will be needed in fast-growing cities and counties ultimately comes down to four factors:
- Is there increased demand for legal services? Population-driven economic growth increases legal activity, mostly on the civil side. Transactions in the related industries of finance, insurance, real estate, and construction may need to be recorded with the county and/or local court, which are often located in the same building. At the extreme, more contractual disputes may go to trial if they can’t be settled. Economic activity begets legal activity.
- How much has the tax base expanded? More people equates to more taxpayers. When a city has a high perceived quality of life, word spreads, and more people flock there. Some move for better job prospects, and some move because they can live anywhere but choose to live there. These latter people tend to be higher-income remote workers and entrepreneurs. Over time, the growing and stable tax base affords more ambitious municipal, county, and state construction projects.
- Is there a broader redevelopment effort? Courthouses are almost always located prominently in the city or town of the county seat, which tends to be one of the larger cities in the county historically. A new courthouse or municipal building fits well into the long-term city plan. It can be a civic anchor in redeveloping a main street or downtown.
- What is the current facility's age/usefulness? Even if the first three factors are lacking, if the current courthouse was undersized and functionally inadequate even before the population began to grow rapidly, chances are it’s in even worse shape now. Counterintuitively, population-driven economic growth may make it harder to improve court operations in the short term via space improvements. Still, it provides a stronger impetus once the community agrees that replacement or expansion must occur.
Final Thoughts
As mentioned previously, the population growth in the South (and the associated slowing in the Northeast) has been occurring for decades. The largest cities in the six powerhouse states and their associated counties have been expanding for some time now--their court systems and courthouses have been gradually accommodating population growth for decades. The areas most at risk for growth impacting their court facilities are in the surrounding counties to large growing population centers, and the up-and-coming cities and towns near places like Asheville and Austin. These places may have put their long-term capital plans on hold due to the pandemic. Ironically, the pandemic may have supercharged migration to these places from more densely populated areas, including the Northeast.
The rise of remote work, warmer weather, and high quality of life are all factors pulling residents southward, which is not recent. Fifty years ago, it was inconceivable that San Antonio could approach Philadelphia in population or that Austin would crack the list of the top 10 most populous cities. It will be interesting to see which southern cities will move up the ranks in U.S. population next.
Anecdotally, since 2020, our company has competed on 55 courthouse projects. We work nationwide and compete on court projects from Florida to Alaska and everywhere in between. Between 2020 and 2024, we competed on 14 courthouse projects in the Northeast (where our offices are located), 31 in the South, and 10 in the Midwest and western states. This is certainly not a statistical sample, but it does support the notion that we are finding more proposal requests in the South than in other parts of the country. This trend will likely increase based on southern migration and population growth in the coming years.
