January 9, 2020
Activities: Administration, Education, Housing / Shelter
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Is there a relationship between school performance and property values?
It is largely accepted that school systems tend to be major drivers where many families decide to live. Now while it isn’t always easy to judge how “good” a particular school district performs, it’s much easier to use per-pupil spending as a proxy.
According to a report by the National Bureau of Economic Research, there may be a real connection between school spend and property values. This can be a valuable tool for municipalities looking to weigh budget decisions against the potential impact of growing or shrinking the property tax base.
According to the National Bureau of Economic Research, there is a definite correlation between school expenditures and home values in any given neighborhood. A report titled, “Using Market Valuation to Assess Public School Spending,” found that for every dollar spent on public schools in a community, home values increased $20. These findings indicate that additional school expenditures may benefit everyone in the community, whether or not those residents actually have children in the local public school system.
While the findings of this national study are compelling, they do not paint a full picture of the link between school spending and home values. According to the website, some school districts may operate more efficiently, so while expenditures are lower, the quality of education is still high. In addition, the size of the district or proximity of schools from neighboring districts could impact the perception of a specific school’s value, beyond the simple expenditure formula.
Researchers that published the report also found that wealthy school districts, where home values may tend to be higher, spend their funding more efficiently. The greatest spending was seen in school districts filled with low-income families, large districts and districts containing fewer homes – areas where home values may be lower overall. The results indicate that while home buyers may associate school quality with spending to some degree, this factor will not be the most significant one in influencing home values. Still, the trend has been noted on a national level, which offers some credibility to the association between the two.
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