Commentary: School Choice Even Improves the Value of Your Home (February, 2015)

By Rob RoperRob Roper

There are plenty of reasons for parents and kids to love school choice in the 90 plus Vermont towns that already have it, and there are plenty of solid educational and social arguments for expanding the program to all Vermont towns. But why should folks without kids care? Property values.

A recent study by Susanne E. Cannon (DePaul University), Bartley R. Danielsen
(North Carolina State University) and David M. Harrison (Texas Tech University), School Vouchers and Home Prices, shows that living in one of Vermont’s tuitioning towns substantially increases the value of your home. Given that a house is the largest investment most people will make in their lifetimes and the fact that in 2014 Vermont was the only state in the union to see home values decline (http://vtdigger.org/2014/08/31/states-housing-market-lags/), expanding school choice is an attractive policy.

The logic is intuitive. Many people choose where to live based on the educational opportunity their zip code offers. Towns with a good school attract more demand, which increases prices. Therefore, it makes sense that towns with access to more good schools – in fact, pretty much any good school along with the ability pick the one that’s right for you – is considerably more valuable.

How much more valuable? As much as $24,181 (or a 16.1% increase) more valuable for an 2000 square foot home with three bedrooms and two baths. As the authors break down their findings:

… the presence of school choice alternatives within a 20 minute commute increases property values by approximately $10,879 (or 6.9%), while the more restrictive presence of higher achieving schools within this same drive time catchment area is associated with a substantively higher $24,181 (16.1%) increase in housing prices. Similar results are found with respect to our 30 minute commuting distances…. Alternative schooling options within 30 minutes enhance property values by $7,618 (or 6.3%), while the presence of higher achieving schools within this same region increase values by $12,805 (or 8.5%).

Another way of looking at that is to say that when we assign students to poorly performing schools with no way to escape, we are effectively depressing real estate values in those school districts on average by more than $24,000.

One other valuable piece of information the study documents is the availability of choices. An argument critics of school choice in rural Vermont use is that there are too few schools to make choice meaningful. You may have “choice” but your still stuck with one school within driving distance. This is overwhelmingly not the case.

The typical Vermont residence which turned over during our sample period was also located within a 20 minute (one-way) commute of two to three schools, and a 30 minute (one-way) commute of over five schools. 

To put this in more concrete terms, the head of an independent school in southern Vermont where tuitioning is wide-spread, recently testified before the House Education Committee. She described how parents in southern Vermont can choose between the Mountain School at Winhall, the Long Trail School, Maple Street School, Manchester Elementary & Middle School and Dorset Middle School.

Having so many choices empowers parents and kids. Students with choice tend to be more invested in their education because they have made an active choice about where they want to be. Parents also play a more active role in their child’s education. As an example, this headmaster testified that at her school the percentage of parents who participate in teacher conferences is 100%. Choice increases the value of their education.

It also increases the value of their houses. The authors of the study note, “with each additional viable school choice/voucher alternative increasing property values by nearly $4,380 (or slightly over 3.0%).” This argues for a policy not of consolidating schools and making them more similar (the current goals being pursued by Montpelier), but rather expanding opportunities and making them more diverse.

We all want Vermont’s education policies and the opportunities we offer students and families to be unique and positive enough to attract and keep families here. This is especially important for a system that has lost over 20,000 students since the passage of Act 60 in 1997. School choice has proven its value in very real terms. It’s time we shared this value with all Vermonters.

- Rob Roper is president of the Ethan Allen Institute.

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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
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