Memphis Suburb Is Fastest-Growing City in U.S.

Since 1990, the population of Olive Branch, Miss., has grown 838 percent, to more than 33,000—but even there, oversupply and foreclosures remain an issue

By Venessa Wong

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Janice Turner has seen Olive Branch flourish over the last two decades. A small town became Mississippi's ninth-largest city as thousands of people relocated across the state line from Memphis.

The 51-year-old paralegal has spent her life in Olive Branch, 20 miles south of Memphis. Back in 1960 the population added up to only 642, according to the U.S. Census Bureau. Turner remembers when visitors to the public library needed merely to drop a slip in a wooden box to borrow books; the expanded 19,000-sq.-ft. library is now Mississippi's second-busiest. Traffic is heavier all over town. It used to take five minutes to drive from one end to the other and can now take 30 minutes during peak hours, she says.

Over the last two decades the population of Olive Branch has exploded by 838 percent. In 1990 residents numbered 3,567. A decade later they totalled 21,054. By 2010, there were 33,484, according to data from the Decennial Census. Meanwhile, Memphis was losing residents: Since 2000, its population dropped 0.5 percent, to 646,889.

In a ranking completed by location analysis company Gadberry Group for Businessweek.com, the Olive Branch area is not only the fastest-growing town in Mississippi, but the fastest growing city in the U.S. The ranking is based on such factors as growth in the number of households within city limits and surrounding areas over the decade and from 2009 to 2010, plus average length of residency and average household income.

Keys: Income and Length of Residence

In addition to household growth, says Gadberry Group principal Larry Martin, "income is one of the primary demographics that define an area's attractiveness. Length of residence is important as a corroborating variable for growth. If an area is truly growing, then the average length of residence should be shorter than an area with flat growth."

From 2000 to 2010, the U.S. population grew by 9.7 percent, according to results from the latest census, but places such as Olive Branch grew at a considerably quicker pace. Other high-growth areas include Keller, Tex., Ellicott City, Md., and South Jordan, Utah, according to Gadberry Group.

"I believe that jobs, affordable housing, a sense of security, and a sense of community are primary drivers," says Martin. "When all of these conditions exist, the odds of growth are high. When none exist, the odds of decline are high."

Not surprisingly, the unemployment rate in these fast-growing cities is lower than the average for their states. Olive Branch's jobless rate in March was 7.5 percent, compared with Mississippi's average 10.2 percent. In Texas, Keller's 6.3 percent rate contrasts with a statewide average of 8.1 percent. The same relative advantage benefits Howard County, Md., home to Ellicott City, and Salt Lake County, Utah, home to South Jordan.

Olive Branch's population began exploding in the 1990s. As Memphis expanded eastward, more residents moved to Olive Branch, which boasted a low crime rate, affordably priced homes, a small-town atmosphere, and a highly ranked school system, says Pam Simpson, associate broker at Bob Leigh & Associates Realtors.

Job Growth, Surfeit of Housing

Fresh employment opportunities also came with the growth of Metro Industrial Park and other area facilities, including Olive Branch Industrial Park and some distribution centers, according to B.J. Page, Olive Branch's planning director. Nearby casinos in Tunica County, Miss., also spread jobs and tax payments to DeSoto County.

Fast-growing cities and states are vulnerable to the perils of overbuilding. The effects of the housing bubble are most evident today in Nevada—America's fastest-growing state from 2000 to 2010—which now suffers from the country's highest foreclosure rate.