Study: homeowners lose when overrides fail

Thanks to Kim Becker for pointing me to an editorial from yesterday’s Boston Globe that puts some numbers around the perennial debate about whether homeowners benefit from passing override that fund schools through increased home values. According to a study of 176 Bay State communities by Barry Bluestone, dean of the School of Public Policy and Urban Affairs at Northeastern University and Ph.D student Anna Gartsman, the answer is decidedly “yes.”

Northeastern: failed overrides hurt home values

Writing in the Globe, Bluestone and Gartsman talk about a simulation they ran on the impact on home values of a change in school spending due to a Prop. 2½ override. That’s a difficult data point to isolate. What the two researchers did was to look at data on housing values in 2005, then look at the change in housing values between 2005 and 2010, as compared to two measures of perceived school quality: school-wide SAT scores and per pupil expenditures.

What the researchers found was that municipalities with SAT scores and per pupil spending levels 20 percent higher than average experienced a 24 percent increase in nominal home value between 2005 and 2010. In contrast, those with SAT scores and per pupil spending 20 percent below average experienced a loss in home value of 11 percent.

Taking the town of Hull as an example, Bluestone noted that the town (like Belmont) recently rejected a small Prop 2 1/2 override ($1.9m) directed towards restoring AP classes at the high school and extracurricular activities. (There’s a warning here for Belmont about how far south things really can go, if you’re inclined to reason to yourself “oh, they’d never cut that!”) Hull, with average SAT scores below the average of communities they studied (961 compared with an average of 1047) and per pupil costs above the average ($11,491, some $1,500 higher than average), saw an increase in home values of 3.85 percent. The override, if passed in 2005, would have cost the average Hull tax payer  $2,530 over five years. Based on their analysis, however, the extra per pupil spending that a successful override would have generated would have correlated to an increase in home values of 6.5% – which translates into $9,970 in added value for the average Hull homeowner. In short: homeowners – even those without kids in the school – lost out on approximately $7,400 in added value on their home by voting down the override instead of passing it. Oops!!

There are issues here,clearly. Each town is different and there’s no guarantee that increasing school funding and programs will translate to increased property values. There are larger forces at play that might affect a local real estate market (the loss of a large employer, for example).

Also, the connection between per pupil spending and SAT scores is tenuous at best. School systems with much higher per pupil costs than Belmont (like Boston or Watertown) don’t come near towns like Belmont in average SAT scores, so its possible to get high performance without high per pupil expenditures. Belmont , most educators agree, exemplifies this.

However, if you believe that young families looking at comparable homes – one in a town that offers AP classes and sports, and one in a town that doesn’t won’t choose the former, you’re dreaming. And, if you believe (as I do) that, in the long term, starving your schools of resources to buy books, cutting class offerings and other support services (psychological, guidance, curriculum support), ceasing to offer accelerated instruction to advanced students and remedial instruction to struggling students will eventually bring down academic performance (which it will), then you should worry about the long term trends for the BPS and for Belmont home owners (like me!)

There’s a belief by many in town that Belmont doesn’t have to observe the laws of gravity -that we can short change our school system and still achieve stellar results.

In past years, that’s seemed to be the case and the exemplary performance of this year’s seniors has cemented that belief in the minds of many. But the effects of cuts are trailing and I predict that  we’ll soon start to see them in decreasing scores and standing for Belmont in the Bay State rankings, as well as the national rankings that Belmont has recently topped. If the study out of Northeastern is to be believed, homeowners who lament the needs of “freeloaders” (aka young families with school age children) and our professional educators may eventually realize that the price of being “right” is higher than they think.