BACK IN THE 1950S, IN AN effort to shake off Atlanta's image as a segregationist city, Mayor William Hartsfield proclaimed his home-town was “The City Too Busy to Hate.” By this he meant that the city was too much on the move to have time to stoke racial tensions.

Atlanta has come a long way since then. A tired slogan born of the Jim Crow South has taken on new meaning. Home builders have to love Atlanta—the city is too busy (building homes) to hate.

Get Northern stereotypes out of your head. Atlanta has become an evermore cosmopolitan place. Immigrants now head up about one in 10 of Atlanta's households, up from barely a few percent two decades ago. More than a thousand foreign companies have offices in Atlanta, and more than three dozen foreign countries have consulates there. Although segregation does endure in Atlanta, it is the metro areas in the Northeast and Midwest that lay claim to being the nation's most segregated metros. And segregation in the Atlanta metro area declined during the 1990s.

Unlike many other metropolitan areas in the nation, the growth story in Atlanta is not so much about burgeoning Hispanic and Asian markets. Though growing at a rapid clip, they still each account for only about 4 percent of all households. Blacks, on the other hand, make up 27 percent of all Atlanta metro area households—about double their share of all households nationally—and an even higher 62 percent in the city.

Hit harder than many other metro areas by the 2001 recession, Atlanta has started to bounce back. More importantly, in the years ahead it is poised to return to its position as the metropolitan area with the most building permits issued annually. Granted, it may have to duke it out with Phoenix for the lead position, but no other metropolitan areas appear as serious contenders for the title of home building capital of the U.S. during the next 10 years.

INFRASTRUCTURE INROADS What makes Atlanta so well positioned for growth? For starters, it is blessed with one of the largest airports in the nation and has excellent rail and highway connections. This has made it the undisputed capital of the Southeast. That's a plus because the Southeast and Southwest are the census divisions that are likely to generate the most job growth and attract the most retirees in the nation for the foreseeable future. And local leaders don't intend to lose that advantage—a fifth runway is already under construction at the airport, adding 25 percent to its capacity in a single stroke.

In addition, the Atlanta economy is well diversified. It has a relatively small exposure to manufacturing and a strong presence in almost every other sector but financial services (which has headed elsewhere as a result of consolidation in the banking sector). Among the many other things going for it, Atlanta is the state capital, it has the highest concentration of federal agencies outside of the nation's capital, it has the fourth largest convention center, it serves a state that ranks sixth in the nation for military spending, and it is home to the foreign car companies cleaning the clock of U.S. automakers.

But perhaps most importantly, Atlanta is a low-cost place to do business. Corporate taxes and the cost of living are both relatively low. Thus, it costs less to attract and retain workers. In large measure, the cost of living is so low because it has been relatively easy to develop land and build homes in the region. As a result, housing supply has been able to keep pace with the growth in demand. In addition, ease of entry of smaller builders into the market has kept price competition fierce and prices low. Much of the same holds true in the commercial real estate market with buildings going up even as office vacancies stand near record highs. As a result, corporations have and will continue to flock to Atlanta to set up their headquarters and regional division offices.

LOVIN' ATLANTA Even if you haven't yet figured out how to gain market share or lift margins, you have to learn to love a place like this. Just a small slice of Atlanta is big business. In fact, the fifth largest builder in Atlanta pulled 6,600 permits in 2004—far more than did the fifth largest builder in markets where big builder shares were much higher: Fort Worth, Fort Myers, Detroit, and Raleigh-Durham.

Atlanta is also an excellent proving ground for how to earn strong returns without being able to count on house price appreciation to fatten your corporate coffers. House price appreciation in Atlanta has remained in the low single digits, even as appreciation has soared in the high teens and twenties in many other of the nation's largest metros. The median house price to median income ratio in Atlanta is about 2.5 to 1. That makes Atlanta the 23rd most affordable of the 1,100 largest metros, while pricier Phoenix ranks 63rd.


Learn more about markets featured in this article: Atlanta, GA.