School Finance Referenda and Housing Values

January 1, 2007

Funding: National Center for Real Estate Research

Summary: Housing values are influenced by a variety of factors. There is substantial and well-established literature that suggests that housing and property values are a function of the physical characteristics of the house and the land on which it sits, proximity to amenities and disamenities, the level and quality of local government services provided, and the level of property taxes collected to pay for these services. Within the context of government service provision and financing, local school quality and cost play a particularly important role in affecting house prices.

A critical component to educational finance in the United States is the requirement that school-related financial arrangements must receive direct voter approval in most school districts. The referendum requirement applies most commonly to the sale of bonds for capital improvements, but extends well beyond bond issues. The results of school referenda have major consequences for housing values in school districts, since both taxes and school quality are substantially capitalized into property values. Yet, we know little about the outcomes and outcome trends of school finance referenda and we have little systematic evidence about the relationship between these referenda outcomes and housing values. The purpose of this project is to gather data on school finance referenda across the states going back to 1995 and then study the relationship between referenda outcomes and housing values.



Garry Young - Director