Analyzing Wealth Disparities and Housing Insecurity in Athens

The wealth disparity within college towns is nothing new. Although in Athens, the problem persists alarmingly, despite county efforts. Athens has the eighth-highest income inequality in the country. This situation contributes to a typical pattern in college towns, given that with a growing student population comes a growing demand for housing. According to the Gini index, 35 of 50 sampled college towns exhibit greater income inequality than the national benchmark. Thus, addressing this issue requires a closer look at the sharp wealth gap between surrounding counties and Athens-Clarke County.

ACC has long been known as a cultural and economic hub, fueled by a world-class university and a growing job market, yet Athens is one of the poorest counties in Georgia. Surrounded by the wealthiest counties in Georgia–Oconee, Barrow, Jackson, Madison, and Oglethorpe–these areas have experienced rapid growth and rising incomes. However, most have chosen to limit the development of affordable housing. This can be attributed to strict zoning rules, large-lot requirements, and heavy restrictions on multifamily buildings, which effectively lock out working families. As these counties grow wealthier and more exclusive, families looking for reasonably priced homes are pushed towards the county that has consistently offered a wider range of housing options: Athens. 

As the University of Georgia (UGA) continues to accept a record number of students each year, the housing market is becoming increasingly strained. To put into perspective, 31% of the population of Athens is made up of students, and only 35% of UGA students live on campus. Each year, 26,000 students are looking for off-campus housing each year with an average rent of $1,600. Nationally, affordable rent can be categorized as 30% of your gross monthly income. Within Athens, the average median income is $50,447, which translates to roughly $1265 available monthly for rent. 

With an average pre-leasing rate of 91% for the upcoming academic year, property managers are leveraging targeted marketing, competitive pricing, and attractive lease terms. This process makes it easier for students to secure housing, rather than local residents. Further, the increase in student admissions is driving up prices and demand for housing options within ACC, leaving local residents with fewer affordable housing options. 

With ACC rent being more expensive than 81% of Georgia, 26.9% of people in Athens are living below the Federal Poverty Rate. Currently, the Mayor and Commission are considering a policy called “inclusionary zoning,” which would encourage developers to build more affordable housing in Athens. This policy, if passed, would change Athens’ zoning code to incentivize developers to include some affordable units in new apartment complexes. Though in Athens, as more affordable housing is built, the problem of differentiating local and student housing persists. 

Thus, incentivized municipal tax abatements for student housing are needed. A tax abatement is a financial incentive offered by a government entity, typically local, to temporarily reduce or eliminate taxes on a property. Abatements are typically used to stimulate economic development, revitalizing distressed areas, or promoting certain types of builds. In Athens, a tax abatement would promote affordable housing construction through reduced taxes on property builds. Within the state, a tax abatement solution has been used within the midtown Atlanta area, hosting the Georgia Institute of Technology. The Development Authority of Fulton County board voted 5-2 to approve a $2.9 million property tax abatement. Board members found that the student housing project represented an opportunity to alleviate housing shortages, provide affordable options for students, and enhance infrastructure along a key corridor near in-city colleges.

Similarly, the ACC 2022 inclusionary zoning policy–though voluntary–requires developers to allocate affordable units to those under 80% of the area’s median income. Therefore, it is imperative that ACC enacts tax abatements for developers who build true student-targeted housing (near campus, furnished, by-the-bed leases). This decreases competition between students and low-income families for the same rental stock, which helps relieve the housing and wealth disparity of Athens. 

Luiza Douglas is a fourth-year at the University of Georgia studying finance and MIS. She is a member of our housing group.