Housing and education policy are frequently treated separately by policy makers, although they are practically enmeshed. Part of the relationship between housing and schools exists de facto, as students will naturally attend schools that are within commuting distance of their homes and research suggests school quality is partly capitalized into home prices.⁹

However, housing’s relationship to schools is also a policy choice: districts have traditionally drawn school boundaries by neighborhood and assigned students to schools by home address, even when other options are more convenient or appealing to families. Meanwhile, residential zoning regulations control the type, size, and amount of homes built in different school zones and segregate cities by income within and across metropolitan areas.¹⁰ Research finds housing characteristics vary systematically across school zones, with larger houses and single family homes more common within high performing school boundaries,¹¹  and larger housing cost gaps exist across high and low quality schools in areas with more restrictive residential zoning.¹²

Education reform efforts have worked to address disparities in opportunity and untether housing from schools in a variety of ways. Charter schools, magnet schools, and districtwide lotteries decouple housing from schools within a specified area. More limited transfer opportunities including attendance waivers are available within districts or between districts in some places.¹³ Educational savings accounts (ESAs) and school vouchers provide private school opportunities outside the traditional public education system.¹⁴ 

Many of these strategies reduce the link between housing and public education on the margin, but the traditional relationship persists: although 9 percent of K-12 students attend a private school, and 20 percent attend a chosen public school, 71 percent of students still attend their assigned public school.¹⁵ Housing still effectively acts as a gateway to educational opportunity for a majority of K-12 students.

Figure 1. Median home value by ZIP code / ZIP code data coverage

Figure 2: School quality varies by home value across U.S. public elementary schools

^{Note: Home values represent the mean ZIP code within a school-quality category. Note that certain districts with open enrollment policies contain non-binding school attendance zones and these relationships are reflected in this figure and throughout the paper, except in Appendix H. School grade assignment by Niche.com is intended to follow a roughly bell-shaped distribution and the number of zip-school observations in each school-grade category varies by quality measure, see Appendix B for details. Median home values are based on 2017 American Community Survey (ACS) estimates.
Data Source: Niche, “K-12 and Place to Live Data.” Licensed exclusively for the Joint Economic Committee. 2019.}

 

Table 1. School quality varies by home value across U.S. public elementary schools

	Overall School Quality	Academic Quality	Teacher Quality	Health & Safety
A+	486,104	508,485	334,626	425,021
A	381,061	345,212	260,447	238,017
A-	255,338	251,297	215,035	307,935
B+	224,884	210,490	204,351	232,762
B	187,133	200,399	201,233	211,539
B-	181,811	186,997	204,857	218,789
C+	182,213	181,974	174,388	272,284
C	184,653	197,664	177,626	183,068
C-	206,431	196,848	168,949	167,989
D+	133,748	132,051
≤D	122,061	106,900

^{Data Source: Niche, “K-12 and Place to Live Data.” Licensed exclusively for the Joint Economic Committee. 2019.}  

The relationship between median home value and academic and teacher quality follows roughly the same pattern. The average ZIP code’s median home value is $106,900 for schools at the lowest academic quality level, and $508,485 for schools at the highest.

Median home value doubles across teacher quality. The average ZIP code associated with C- teacher quality has a median home value of $168,949, while an average ZIP code associated with a school with A+ teacher quality has a median home value of $334,626.²³

Finally, median home value is flatter across health and safety ratings but with more disparity between the tails. The average ZIP code intersecting a school with the lowest health and safety rating has a median home value of $167,989, while an average ZIP code intersecting a school with an A+ health and safety has a median home value of $425,021.

 

City Case Studies

The trend in home values across school quality levels may simply reflect individual choices about where to live, how households value educational amenities, or what type of households’ children excel at school. However, past and present school zoning and comprehensive residential zoning suggests it is unlikely the relationship between homes and schools reflects a natural product of free choice.

To test the idea that public policy affects the relationship between home values and school quality, the following case studies exploit differences between cities that vary substantially across two policy dimensions (Figure 3). Cities vary from restrictively zoned to minimally regulated and from traditional residential assignment to districtwide lottery assignment (Appendices D and E).²⁴

Figure 3. Two dimensions of public school access

 

Portland, Oregon: Residential school assignment with restrictive zoning

Portland, Oregon pairs traditional school assignment policies and limited transfer opportunities with restrictive residential zoning.²⁵ Over three quarters (77 percent) of residential land is zoned for detached single-family homes in Portland and Portland’s urban growth boundary also artificially limits available land.²⁶ Meanwhile, Portland’s population grew almost 12 percent between 2010 and 2018, increasing demand for housing over time.²⁷

Portland should theoretically exhibit greater housing price disparities across low and high quality schools and fare poorly at providing high quality schools at low or affordable prices. In fact, Portland home prices are significantly above national averages at every school quality level (Figure 4), and the average neighborhood median home value associated with an A quality school is $555,096.

Figure 4. Portland home values are high and increase across school quality levels

^{Notes: Averages are for neighborhoods within Portland and ZIP codes nationally. Public elementary schools only.
Data Source: Niche, “K-12 and Place to Live Data.” Licensed exclusively for the Joint Economic Committee. 2019.}  

 

Portland features increasing average home values across increasing school quality levels, with around $285,000 difference between home values associated with its highest and lowest quality schools.  For policymakers that care about access to high-quality education, Portland arguably represents the worst of both worlds: restrictive zoning which segregates housing by income and pushes home prices up at every quality level plus residentially assigned public schools that partition neighborhoods into school zones less-accessible to families at different income levels.

This policy pairing likely drives inter-district segregation as well, as would-be residents are excluded or deterred from moving to Portland based on high home values associated with even Portland’s low quality public schools.²⁸ Portland’s recently slowing population and job growth may marginally ease price pressures in the future but do not constitute a solution to the problem.

 

San Francisco, California: Districtwide lottery with restrictive zoning

San Francisco has a districtwide lottery system that assigns students to schools using an open enrollment application that uses “tiebreakers” to place students at schools when schools are over capacity. It pairs this policy with highly restrictive residential zoning, and strong and growing demand for housing.

Restrictive zoning creates artificial scarcity which creates upward pressure on home prices at every quality level; estimates from past research suggest residential zoning increases the cost of housing by 53 percent in San Francisco.²⁹

San Francisco exhibits a flatter relationship between housing and school quality (Figure 5) and effectively charges one average home price across all quality levels.³⁰ However, the price is so high that public education opportunities are inaccessible to many existing and would-be residents.

Figure 5. San Francisco home values are high and relatively flat across school quality levels

^{Note: In this figure San Francisco’s neighborhood-school relationships are based on the city’s school attendance areas. However, as a consequence of San Francisco’s districtwide lottery, these attendance zones are non-binding and the functional relationship between schools and neighborhoods in San Francisco may be more accurately represented by Appendix H, Figure 1.
Averages are for neighborhoods within San Francisco and ZIP codes nationally. Public elementary schools only.
Data Source: Niche, “K-12 and Place to Live Data.” Licensed exclusively for the Joint Economic Committee. 2019.}
 

San Francisco’s districtwide lottery would likely be more effective at improving access if city residential zoning policies supported housing affordability, but the average neighborhood’s median home value in San Francisco is approximately $1 million at every school quality level. The home-value-to-income ratio is much higher in San Francisco at every school quality level than nationally or within any comparison city (Figure 6), which likely makes living in San Francisco unappealing to families. Prices are so high that research suggests minorities and low-income residents have led out-migration from San Francisco, and families with children have led out-migration from the state generally.³¹

Figure 6. Housing affordability varies by city and school quality

^{Note: Ratios are for neighborhoods within each city and ZIP codes nationally. Ratios are rounded to the nearest whole number.
Data Source: Niche, “K-12 and Place to Live Data.” Licensed exclusively for the Joint Economic Committee. 2019.}

San Francisco is wavering on its commitment to a districtwide lottery, and the district is poised to adopt a new enrollment system likely to include stronger elements of residential assignment in coming years.³² Criticisms of the current districtwide lottery include that the lottery is creating more demographically patterned enrollment due to information and transportation limitations, despite efforts to address these issues by non-profits and through city bus routes.³³

Even in cities with a wide degree of public school choice, students face barriers in exercising it due to practical considerations like commute time, transportation costs, and social challenges associated with attending a school outside of their neighborhood.

Transportation demands unique to public school choice have strained school budgets in some places. For example, in recent years Boston Public Schools spent a substantial portion of the district’s budget on transportation. Costs are high partly because a lottery system necessitates moving children to schools across the city in an inefficient fashion. In Boston, older children receive a public transportation pass, but children up to sixth grade use yellow buses which cost the district up to $10,000 to $20,000 per student per year. 

Moreover, administrators have observed that low-income, late-comer, and immigrant families are less likely than other students to effectively access public school choice options, and are more likely to attend their local neighborhood school irrespective of quality.³⁴ Reforming residential zoning policies could theoretically mitigate some of the challenges associated with open enrollment in San Francisco and Boston by allowing families to not only choose their school, but choose to live closer to their school.

Houston, Texas: Residential school assignment with liberal residential zoning

Texas is a lightly zoned state, ranked 49^th-most-restrictive,³⁵ and Houston is the only major city without a traditional zoning code. Houston is not regulation-free, and does have minimum lot size regulations, front setbacks, street design regulations, and parking requirements.³⁶ Still, zoning was previously estimated to account for 0 percent of the cost of housing in Houston as a result of its lax regulatory environment, and this makes the city unique in this cross-city comparison.³⁷

Like Portland, schools are traditionally assigned in Houston and limited transfer options are available. Houston also has some charter and magnet schools which provide a lesser degree of public school choice not captured in this analysis.

The Houston metro area has seen remarkable in-migration in recent years, adding more people between 2010 and 2018 than all other metro areas in the US except Dallas.³⁸ In spite of increasing demand, the city has successfully kept home prices low both generally and across its highest school quality levels (Figure 7).

Figure 7. Houston home values are similar to national values, despite substantial population growth

^{Note: Averages are for neighborhoods within Houston and ZIP codes nationally. Public elementary schools only. There is only one A+ observation. The combined, weighted average of observations in A and A+ categories is $298,515.
Data Source: Niche, “K-12 and Place to Live Data.” Licensed exclusively for the Joint Economic Committee. 2019.}  

In Houston, the average neighborhood associated with an A quality school has a median home value of $300,359, around $81,000 less than the national average at that school quality level. At every school quality level, Houston has lower home prices than the other major cities in the analysis, except that Chicago’s median home value at the A- level is $8,000 less.

Houston’s success likely hinges on its elastic housing supply which translates to more homes being permitted in the Houston metropolitan area on an annual basis (Figure 8). Economic theory predicts that inelastic supply in the face of growing demand will cause price escalations, and the housing and zoning literature supports this idea.

Figure 8. Houston MSA issues more building permits annually per capita

^{Note: Hurricane Harvey caused catastrophic damage to the Houston MSA in 2017, likely resulting in fewer housing starts in the Houston MSA the same year.
Data Source(s): Building Permits, Annual New Privately Owned Housing Units Authorized in Permit-Issuing Places. 2019. Distributed by Haver Analytics, Inc.
Metropolitan and Micropolitan Statistical Area Totals Dataset: Population and Estimated Components of Change: April 1, 2010 to July 1, 2018. 2019. Distributed by U.S. Census Bureau. https://www2.census.gov/programs-surveys/popest/datasets/2010-2018/metro/totals/cbsa-est2018-alldata.csv} 

Houston also likely benefits from the unusual land use pattern resulting from its lack of traditional Euclidean zoning, which separates development by type or use. Unlike most cities, Houston’s organic land use pattern intersperses multi-family housing throughout school zones in the Houston metro area.³⁹

Despite huge immigration inflows over previous decades, Houston is arguably more inclusive and accessible at most school quality levels than San Francisco, Portland, and even Chicago. Houston provides access to highly rated public schools for a much wider range of economic backgrounds, in spite of its choice-limiting residential assignment policies.

^{Note: Home values represent the mean ZIP code within a school-quality quintile. Note that certain districts with open enrollment policies contain non-binding school attendance areas and these relationships are reflected in this figure and others in the paper. Factors considered in Niche.com school ranking are described in Appendix A. Median home values are based on 2017 American Community Survey (ACS) estimates.}

^{Note: This figure was generated using lowess smoother, a locally weighted regression of median home value on public elementary school rank. Each data point represents a zip-school observation, with Y axis values indicating the median home value for a zip code associated with a school with X axis value rank.} 

Appendix D. Selected Cities’ Measures of Zoning Regulation

^{1 The metropolitan area is Portland-Vancouver, OR-WA, which may bias the measure downward.
2 The zoning tax is the gap between the marginal cost of new construction and the market price of an apartment.
Source(s): Glaeser, Edward L., Gyourko, Joseph and Saks, Raven. "Why is Manhattan so expensive? Regulation and the rise in housing prices." The Journal of Law and Economics 48, no. 2 (2005): 331-369. https://www.nber.org/papers/w10124.pdf Gyourko, Joseph, Albert Saiz, and Anita Summers. “A New Measure of the Local Regulatory Environment for Housing Markets: The Wharton Residential Land Use Regulatory Index,” December 13, 2006. https://doi.org/10.18411/d-2016-154 Brown Calder, Vanessa. "Zoning, Land-Use Planning, and Housing Affordability." Cato Institute Policy Analysis 823 (2017).}