On Oct. 1, the Athens-Clarke County Mayor and Commission approved a nonbinding memorandum of understanding (MOU) for affordable housing, giving a foundation for talks between the ACC government and the Athens Housing Authority. Under the MOU, $39 million in funding will go toward developing Bethel Midtown Village Property as part of the North Athens Downtown Development project if voters approve the Special Purpose Local Option Sales Tax 2020 referendum on Nov. 5.
If the referendum passes, the funding from SPLOST 2020 will play an important role in reducing income inequality and poverty in Athens.
Income inequality and affordable housing are serious problems in Athens. According to The Red & Black, the Athens poverty rate is 28.4% after excluding students. The median income of Athens residents is $58,000, less than half the median income of UGA families, and 49.6% of Athens residents pay over 30% of their gross income on rent, placing a financial burden on many families. As the Brookings Institute explains, high levels of inequality can have a raft of negative effects, including fewer mixed-income schools that have better outcomes for lower-income students, a smaller tax base and higher prices of goods for low-income households.
If the SPLOST 2020 referendum passes, however, the county could make progress in solving these issues. Former ACC Housing and Community Development Director Deborah Lonon said the county is targeting a monthly rent of approximately $800 per month in a January presentation on the SPLOST proposal. This rent would be about 16.6% of the gross median income in the county, which would reduce a burden on Athens residents who pay a higher share of their gross income on housing. This would provide residents with more money to buy other essential goods or to save.
Further, studies have shown that affordable housing can increase equality in communities. For example, an Urban Institute analysis of 2013 Current Population Survey data adjusted by the Transfer Income Model found housing subsidies reduced income inequality. After adding housing subsidies to income, the Gini coefficient — a common measure of inequality — fell from 0.424 to 0.418 in the U.S. In addition, before adding in housing subsidies and the mortgage interest and real estate tax deductions, a household in the 90th percentile earned 9.4 times as much as a household in the 10th percentile. After adding those in, this ratio decreases to 8.6.
Though only one step, approving the SPLOST 2020 referendum could serve an important part in making the county a more equitable place to live. Indeed, greater access to affordable housing could offer Athens residents struggling from economic hardship a chance to find more stability and fairness in their community.
Clarification: A previous version of this article said that the ratio of incomes between the 90th percentile and 10th percentile of earners fell from 9.4:1 to 8.6:1 after adding in housing subsidies, but this occurs after adding in housing subsidies and the mortgage interest and real estate tax deductions. The Red & Black regrets these errors.