The Price for Living in a Good School District? $205,000

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The Brookings Institute recently released a study (pdf) on the cost of housing in good school districts. The study was of particular interest to me because of a case I worked on in law school dealing with the inequality of public school funding. Basically, because schools are funded in large part from real estate taxes, wealthy school districts tend to spend more per student than lower income school districts. We claimed that such disparity was unconstitutional; we lost.

The Brookings Institute study found that “home values are $205,000 higher on average in the neighborhoods of high-scoring versus low-scoring schools. Near high-scoring schools, typical homes have 1.5 additional rooms and the share of housing units that are rented is roughly 30 percentage points lower than in neighborhoods near low-scoring schools.”

Here are some of the additional findings from the study:

  • Nationwide, the average low-income student attends a school that scores at the 42nd percentile on state exams, while the average middle/high-income student attends a school that scores at the 61st percentile on state exams.
  • Northeastern metro areas with relatively high levels of economic segregation exhibit the highest school test-score gaps between low-income students and other students
  • Across the 100 largest metropolitan areas, housing costs an average of 2.4 times as much, or nearly $11,000 more per year, near a high-scoring public school than near a low-scoring public school.
  • Large metro areas with the least restrictive zoning have housing cost gaps that are 40 to 63 percentage points lower than metro areas with the most exclusionary zoning.

The report suggests that low income students attend lower quality schools as compared to middle/high income students. The problem is that the quality of the school is based on standardized test scores. Those scores, however, do not always reflect the quality of the school.

For example, one study found a correlation between income and test results. The higher the family income, the higher the test scores. And other studies show that divorce can have a negative effect on a student’s performance.

If you’d like to check out details about your neighborhood, you can use the Brookings Institute interactive map or search by major metropolitan area.

Published or Updated: April 3, 2014
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. jim says:

    My state seems to rank pretty low in the disparity rankings. I believe its because of how we handle property taxes. In the past few decades we’ve had a few laws passed to limit property taxes. The end result of that is that the schools get a smaller % of their income from the local districts and the majority of the money comes from the state level. Plus the state does some equalization to help out the small districts with limited finances.

  2. Mary says:

    You might consider examining school district audit reports. Some reports will state how much money is spent per pupil in the district.

    You might find that there is sometimes a tremendous amount of money spent per pupil on individual schools with lower test scores. Not all low income students attend low quality schools although certainly some do.

    • Rob Berger says:

      Mary, thanks for the suggestion. That’s an excellent tip!

  3. Denise says:

    Our child attends a charter school. We live in a neighborhood located in an elementary school district that does not score well on state exams nor does its staff have an admirable reputation. All of her preschool friends were headed to kindergarten classes that were in the top-rated public schools, and their parents disclosed to us that they were happy to spend more money on their homes to ensure that their children get a great education. My husband and I did not want to perpetuate the lifestyle of spending (in reality BORROWING) more money for a house so that our child could attend a good public school. In our opinion, it is wrong that anything public should be skewed more favorably for the rich than the poor. If parents want to spend their money directly for education (i.e. a private institute), that is a different story. Our daughter did attend our neighborhood public school during her kindergarten year, and it was indeed as bad as we had heard. She was able to start attending a public charter school the following year. And…we love that school! The families are very involved, the teachers are wonderful, the children are challenged, and the school performs well on its state exams–not quite as well as the schools in the rich neighborhoods (where the percentage of students receiving free/reduced lunch is quite low, around 10%) but much better than the schools that have a similar rate of 40% free/reduced lunches. And this school receives less money per child than any other public school in town.

  4. Mom says:

    We live in a neighborhood located in an elementary school district that does not score well on state exams nor does its staff have an admirable reputation. At the age of 5, all of our daughter’s preschool classmates were headed to kindergarten classes in the town’s top-rated public schools, and their parents disclosed to us that they were spending more money for their homes than they would have liked to ensure that their children lived in a neighborhood where they would be able to get a great education. My husband and I did not want to perpetuate the lifestyle of spending (in reality BORROWING) more money for a house so that our child could attend a good public school. In our opinion, it was wrong that anything public should be skewed more favorably for the rich than the poor. If parents want to spend their money directly for education (i.e. a private institute), that is a different matter.

    We believed that parental involvement was the key to her success and that we could work with the school and teachers to provide her with a good education. So our daughter did attend our neighborhood public school during her kindergarten year, but our hopes were dashed. The teachers were not interested in parental involvement except for volunteering to bring snacks for holiday parties. The communication was horrible. And our daughter was bored. She had been reading since the age of 4 but was forced to spend her time coloring and practicing writing letters or numbers. She was a well-behaved child and the teacher liked her, but she was asking us often if she could return to preschool so that she could learn again. The school administration didn’t seemed to be very concerned with our dilemma either. We realized that we were up against a mighty machine and were in no position to change it.

    My husband and I were torn as to what we should do. I threw in the towel and said we should buy a house in another school district. Who were we to think we could beat the system? But what we could afford in the other school districts were old fixer-uppers that costs 50% more than our current home. And saving for our child’s college (her future education) would be a lot harder. Luckily we were able to find another solution. We signed our daughter up at a public charter school the following year–a school where home residence was not an issue. And…we love that school! The families are very involved, the teachers are wonderful, the children are challenged, and the school performs well on its state exams–not quite as well as the schools in the rich neighborhoods (where the percentage of students receiving free/reduced lunch is quite low, around 10%) but much better than the schools that have a similar rate of 40% free/reduced lunches. And I will also add that this school receives less money per child than any other public school in town.

  5. Mom says:

    Sorry for the repeat. I didn’t think the original post by “Denise” went through, so I tried again with a few additions. Looks like I was wrong and now both are posted.

  6. Francisco says:

    The tuition and financial aid rates vary from states. It’s helpful to compare tuition rates if you consider several sates.

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