By Kelcey Caulder
Gentrification, the process of renovating and reviving deteriorated urban neighborhoods through the influx of affluent residents, has always been a hot-button topic in Athens, particularly in terms of urban planning. While it has its benefits — including rising property values, increased wealth and increased economic activity — gentrification in Athens is more commonly known for contributing to the city’s massive income inequality and the displacement of low-income residents from homes and businesses.
Commissioner Melissa Link says that this is common in college towns and that the Athens Clarke-County government is constantly trying to uncover new ways of combating these problems.
“This is very typical of college communities. It happens everywhere, especially in Georgia, because students have the HOPE scholarship that allows them to keep extra income,” Link said. “They use that to pay for sky-rise housing complexes, so, because there is a market, people build them. What people don’t know is how gentrification affects businesses here in Athens.”
According to Rob Trevena, the Director of Housing and Community Development in Athens, the influx of higher-income residents to a particular area often lead to changes in culture and demand that lead to the closure of previously existing businesses within the community.
Trevena, along with Link, believes that Athens has found a way to discourage this from happening and even bring prosperity to communities already affected by gentrification — state-mandated opportunity zones.
Because of these opportunity zones, new businesses developing in Athens will find more tax benefits when opening in low-income and historic areas than downtown. Outlined in the Athens-Clarke County Urban Redevelopment Plan (URP), these zones are meant to encourage development and revitalization in “areas that are historically underserved and low-income with little business and that have often been gentrified” through the use of job tax credits.
“Here at the Housing and Community Development Department we assist neighborhoods that are quickly gentrifying because of the rapid development of student housing in the community,” said Trevena.
“When you have this vibrant downtown and an average citizen age of 25, you have a very young community. That becomes a great opportunity to make money. There’s a lovely pool of educated people here that will work for minimum wage which makes it easier to hire. Now, that has a downside if you were born and raised here and managed to just barely make it out of high school. That’s what we are dealing with. So, we developed a small business program that provides tax incentives for businesses locating in certain areas within the community.”
These areas are Baxter Street, Chase Street/Newton Bridge Road, Hawthorne Avenue, Lexington Road, North Avenue, Oak Street and West Broad Street, locations that were selected as opportunity zones because of their high poverty and crime rates, as well as their levels of visible blight.
When business owners build in these locations and create two or more jobs, they are given a special job tax credit of $3,500 per job created. The new jobs must be full-time, permanent positions and must pay at minimum $22,620 per year. The credits can be claimed for up to five years, as long as the jobs are maintained.
“For example, on Hawthorne Avenue, you could create two jobs at a gas station and be eligible for those job tax credits, but in other areas, you may have to create ten new jobs, and they’d have to be manufacturing jobs,” said Amy Lopp, the Business Development Specialist for the Athens-Clarke County Economic Development Department.
Though these incentives sound beneficial for business owners developing in Athens, it can be difficult to see how these tax credits will extend that benefit to other members of the community outside of simply increasing shopping options and occupying vacant buildings. For Trevena, it is all about creating a better local economy and safer neighborhoods in which everyone will be happier to live.
“Generally, what we’ve seen is when a business relocates into one of these zones, they redevelop the building itself, so they remove the blight from that individual tax parcel. Whether we’re talking about single family houses or businesses, when one is beginning to be repaired, renovated or rehabbed, it typically generates neighbors to do something similar. We’ve seen that in our low to moderate income neighborhoods where, with some government assistance, people nearby begin to clean up. It’s kind of a synergistic approach that helps everyone,” Trevena said.
“In Athens, we have this endless supply of freshman, sophomores, juniors, seniors, Master’s level students, who will come in and work for nothing,” he continued. “That’s really hard on the families that were born and raised here and now have to compete with them. Having more businesses and more jobs helps with that too.”
According to the URP, opportunity zones seek to “support the growth that protects community resources and sustains the high quality of life we want in Athens-Clarke County” and that “encourages high paying business and industry that employ and train a skilled labor force.” In other words, improvements will include reduced crime, better services, more jobs and a more diverse array of businesses.
Businesses already existing in other Athens areas are eligible for other tax credits such as investment credits, and the local government offers business owners who do not wish to open within opportunity zones other means of assistance.
“I would say that, more than anything, we provide services to help. We either partner them with someone who could help them or bridge the gap between them and the university. We might help them with regulatory issues. We connect with them and keep them here,” said Amy Lopp. “We help those businesses find space and do target outreach to entrepreneurs, particularly those in life sciences. They need to know about real estate and incentives, particularly if they only have one or two employees.”