The Value of New: Elementary School Facility Age and Associated Housing Price
Gibson, Huston, Journal of Housing Research
The purpose of this article is to assess the relationship between elementary school facility age and single-family housing price in the Orlando, Florida metropolitan area. This is a cross-sectional study employing multivariate regression. The model includes facility age as a measure of perceived school quality, along with a series of control variables to assess the relationship between public elementary school facility age and the corresponding housing prices within the associated school attendance zones. This study provides evidence that housing prices are associated with school facility age. The findings show housing prices to be positively correlated with newer and historic school facilities.
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This paper explores the association between public elementary school facility age and housing price. New, historic, and in-between school facility age categories are explored, both in terms of age built/constructed and average facility age, weighted by net square feet to account for additions and remodeling. The perception of the school's descriptive categorical age influences its desirability and thereby the associated selling prices of housing in the school attendance zone. The findings pertain to public elementary schools; however, additional analysis of middle and high schools result in fairly similar findings.
A person's home is one of the single largest financial investments he or she will make for themselves and their family (United States Department of Housing and Urban Development, 1995). Therefore, it is rational to assume that property market value is a subject of reasonable importance. This makes research investigating the influences on housing value a topic of great relevance. One of the influences on housing price is commonly thought to be school quality (Jud and Watts, 1981). The relationship between school quality and housing choice is seemingly bi-directional and multi-dimensional, although the most basic explanation of the relationship is an underlining desire by parents to send their children to ''good'' schools.
Education is an access to opportunity for children (Briggs, 2005). Due to the importance of education, parents will seek out housing in the best school zone they can afford, net of other decision factors (Tiebout, 1956; Fischel, 2000; Briggs, 2005). Essentially, when shopping for housing many consumers will simultaneously shop for schools, deciding whether or not to pay higher home prices to live in better school zones (Tiebout, 1956; Fischel, 2000). In addition, households without children in the K-12 public school system are suspected to also want to capitalize on a perceivably good school zone via the solid resale value (Jud and Watts, 1981; Briggs, 2005). One of the best measures of desirability for any commodity is the price that someone is willing to pay. With respect to housing studies, school quality has been referred to as ''the most important cause of the variation in constant-quality house prices,'' (Haurin and Brasington, 1996, p. 363).
Though the exact root, or even the extent, of this effect is one of debate, school quality is repeatedly professed to influence housing price. The relationship between school quality and housing price is widely discussed in the literature. Several studies in various locations in the United States have relatively similar findings, suggesting a significant and positive relationship between school quality and housing value (Kain and Quigley, 1970; Li and Brown, 1980; Jud and Watts 1981; Diyab, 1984; Haurin and Brasington, 1996; Hayes and Taylor 1996; Bogart and Cromwell, 1997; Bradbury, Case, and Mayer, 1998; Goodman and Thibodeau, 1998; Black, 1999; Clark and Herrin, 2000; Weimer and Wolkoff, 2001; Downes and Zabel, 2002; Figlio and Lucas, 2004; Reback, 2005; Brasington and Haurin, 2006; Harrison, 2006; Seo and Simons, 2009). Yet critically, previous studies addressing school quality on housing prices limit their considerations to mostly test scores (and variations of), with only some limited auxiliary emphasis on ''perceptions,'' socioeconomic characteristics, school finances, and student/teacher ratios. …