It’s all about supply and demand.
Well-supported schools draw families to a district, reducing inventory in that area. Reduced inventory drives the price of homes up, and stabilizes the ‘micro-economy,’ or economy of the area. Conversely, under-supported schools with higher student/teacher ratios and fewer curricular opportunities drive families away from the district, increasing available home inventory, which drives property values down (sometimes significantly) and de-stabilizes the micro-economy.
The best example of this can be found in Grove City, Ohio 2009. My in-laws live in Grove City, so this hit us on a personal level. In a paralyzing turn of events, the Grove City school levy failed, prompting extracurriculars to be abruptly cancelled, class sizes increased, classes cancelled altogether, sports (including football) to be cancelled, and buildings closed. Marching band season was scrapped. Teachers were immediately laid off. Students relying on sports and music scholarships had no venue to perform. Perhaps the most painful outcome, however, was the split schedule forced upon students and families. Some high school students went to school from 7 am to 1 pm, and some went to school from 1 pm to 7.
Families trying to salvage their student’s senior year (and scholarship opportunities) immediately fled to other districts. Seeing the exodus, businesses got nervous and followed suit. Those families and businesses took their money out with them.
The closure of school buildings hurt the Parks and Rec department, as venues for their programs were shuttered.
Surrounding geographic areas sensed the collapse and started actively recruiting people. The Grove City Mayor was forced to address City Council about the poaching, citing a Dispatch ad enticing Grove City residents to move to Pickerington. According to meeting minutes, he said “…You never recover from those residents that move away; the companies that never come; etc. We need to educate the public and ourselves over the implications that another failed Levy would have on the City.”
Indeed, as residents and businesses left Grove City, property values dipped well below values in peer districts. Home sellers took giant losses totaling tens of thousands of dollars.
When levies are up for a vote, it is often argued “I have no plans to move, so I don’t care about property value.” For those homeowners, it is wise to remember that sometimes people sell because they have to, not because they want to. No one plans to get divorced, no one plans to lose their job, and no one plans an abrupt move to take care of a sick, injured, or aging family member. However, those scenarios force people to sell their homes, like it or not.
Keeping property values stable is the best way to insulate homeowners from devastating losses. For this reason and a host of others, please support your local school levy.