School Quality and Housing Costs

Thursday’s post “What would an extra $50k a year mean for Jay and Wally’s childhoods?” sparked a terrific discussion in the comments section.  Readers wrote about the choices and tradeoffs their families are considering around where to live, how much money they feel they need to make, and what kinds of childhoods they want for their kids.  For me, receiving so many substantive replies was equivalent to the magic moment in that viral video Caine’s arcade, where the little boy comes back from lunch to find people lined up to play his homemade games.  So thank you Carter, Oonagh, Jill, Jessica, Marc, Amanda, Heather, Sarah, and Karen!

Several commenters made the point that I was undervaluing the degree to which the price of a house is a function of the quality of the school district where it’s located.  Or, as one friend with young kids who recently paid a premium to gain access to a strong public school put it, “People who live in wealthy suburbs with great public schools are essentially paying for private-school tuition.  It just comes bundled with granite countertops and walk-in closets.”

I agree that the cost of housing can’t be written off entirely as a “material” acquisition on par with the type of car you drive and the quality of the pans you cook with.  Which left me curious to find out just how much of the price of a house is determined by the quality of the public schools that serve it.

It turns out to be a hard question to answer.  I read two studies, one based on the real estate market in metro St. Louis and the other based on home prices in Mecklenburg County, North Carolina.  Both papers point out that effects of school quality are hard to disentangle from the effects of neighborhood quality: Houses served by good public schools tend to be located in more upscale neighborhoods, making it hard to differentiate the premium you’re paying just for the schools and the premium you’re paying for the right to live within walking distance of a chai latte.

In order to tease these two effects apart, the researchers compare houses of similar quality located just across a school zoning line from each other- the thinking being that the two houses share the same neighborhood at the same time that they’re zoned for different public schools.  They find that housing prices increase 10-15 percent for every standard deviation difference in the quality of the public schools to which those houses are zoned.  The authors of the paper on metro St. Louis further argue that housing prices increase exponentially with the quality of the schools, so that people are paying the greatest premiums, percentage wise, in towns at the top end of the school quality spectrum like Newton, MA (a town which a couple commenters are considering moving into).  The authors wrote,  “As school quality increases, competition from other buyers creates an increasingly tight housing market, because the housing supply in these areas is often very inelastic, as most metropolitan areas have a fixed housing stock in the short run.”

Writing now in more personal terms, I think that where to live when kids hit school-age is one of the hardest and most interesting decisions in the life of a family.  It’s hard because most of us won’t get everything we want- we’ll either stretch our housing budgets, or incur longer than desirable commutes, or trade down in school quality.  And I think it’s a uniquely interesting decision because it forces parents to think about what they value in ways that few other decisions do.  Really everything’s on the table: education, money, daily lifestyle, long term aspirations, the value of diversity.

Caroline and I talk about these issues a lot and we haven’t come to any firm conclusions.  Partly that’s because we’re at the mercy of the academic job market and don’t know which part of the country we’re going to end up settling down in.  I do know that part of me is relieved that Caroline’s career compelled us out of Philadelphia, because I loved the city and would have wanted to stay there, but I have no idea how we would have navigated the schools issue had we still been there when Jay was ready for kindergarten.

The other issue raised in the comments that I wanted to respond to is the question of how important it is for a kid to have the same type of “stuff” that his peers do.  As Jessica wrote, “According to my husband’s philosophy, at least, the $100 backpack is much more important if all of your friends also have the $100 backpack, than if they have the $40 or even the $20 version, and buying that $100 backpack is a small price to pay for a child’s (mental) health and safety.”

No easy answers here, either.  Caroline and I talked about this issue on the drive home this afternoon from Grosse Pointe, where we’d gone for pancakes and a driving tour of the auto industry mansions.  Caroline, who always has a a moderate and level-headed take on these things, thought that it wasn’t a bad thing for a kid to be a little out of step with his peers- so that maybe he gets the backpack but doesn’t get the shoes.  She also said that if you were to give a kid a choice between going to an average high school where he’d been on even footing economically with his peers, and going to a good high school where he’d be economically disadvantaged compared to his peers, most kids would probably choose the better high school even if it meant that as a result they’d feel a little self-conscious about money.  (Caroline added that a kids’ real response to this question would likely be: “Mom and Dad, work harder so I can go to the good school and have the right gear.”)

Finally, I’d just say thank you again to the commenters for propelling this discussion forward.  I find these to be an endlessly interesting and important set of issues.  I will certainly write a lot more about them in the future, and I hope many of you will continue to join me in the process.

Related posts from Growing Sideways

What would an extra $50k a year mean for Jay and Wally’s childhoods?

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4 thoughts on “School Quality and Housing Costs

  1. My best friend once told me that when her family moved to Maine, they had considered moving to Brunswick but had chosen Freeport instead because our school system has a much better reputation. I realized that the fact that I laughed and understood her parents’ reasoning meant that those reputations emerge at the level of the students, but in different ways. People have disdain for Brunswick High School because its student body has a reputation for being “sketchy” and rough. However, from my visit to take the ACT and from what I’ve heard from people I know who go there, it’s not such a black and white issue. They have a much greater variety of classes available, including more AP classes (which I would have appreciated at FHS) and resources from Bowdoin. So I’ve found myself wondering about that trade-off: is it worth it to go to a school with a rowdier population in exchange for more academic options? And what is there to win or lose in teacher quality? Differences between school districts can be a very specific matter, I think.

    • That’s a great point, Anya, and very well put. I asked Caroline the other day about research on the relationship between public school quality and student life outcomes, once you control for factors like parents’ education and income. She said it’s hard research to do because most data is available only at the school level: it will give you a picture of the “average” Brunswick HS student but won’t let you track sub-populations of students. This is significant precisely because of the point you made- there are lots of specific paths through the same high school. In fact, Caroline’s high school is a good example of this. It is a big high school on the outskirts of Washington DC with a diverse student population. By average scores her high school might not have looked phenomenal, but her specific experience was great- she had plenty of access to AP and IB classes and she had a large peer group of similarly talented, motivated students.

  2. When it comes to stuff and kids, be glad you have boys. Girls are more conscious of “stuff” and it starts earlier…it defines their social role and position much more than for boys.

  3. I understand the importance of choosing a school in the sense that it will play a role in the child’s college decissions, the lifelong friends made, and what opportunities are at the child’s disposal (after school tutoring, sports, drama, music, art, etc.). Having worked in both the public and private school settings in Philadelphia what I have learned most is that it is the role the parent(s) play in their child’s education that is most important. You can send your kid to the top preperatory school yet not be available to guide them and they will struggle more that the kid who is sitting in a half condemed public school with parents at home willing to sit down and parent. I think that what I have learned most is that while in high school I took for granted the great community that surrounded the school- from a principal who knew your name to parents who would always offer you a ride home when you were in need. I guess that is a long winded version of I hope to someday find a little falcon nest for my little ones.

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