How School Districts, Funding Policy, and Housing Affordability Add Up to Inequitable Systems

What sits at the intersection of school district boundaries, school funding policy, and housing affordability?

Inequity for students and families. 

Lack of affordable rental housing effectively prices low-income families out of many school districts. This situation might be fine if all school districts were created equal, but they aren’t. Some districts and schools do a far better job educating students than others. Bellwether Education Partners’ recent report, Priced Out of Public Schools, compares rental affordability and per-pupil funding in districts in the top 200 U.S. metropolitan areas by population. We found that, on average, the gap in funding between the least affordable and the most affordable school districts is nearly $6,500 per student. That means that in a country that celebrates equal opportunity, in practice many low-income families are barred from accessing the most richly resourced schools based on whether they can afford to live on one side of a school district boundary or not. 

And these boundaries are no accident. They’re the result of policies enacted in communities across the country in housing, zoning, infrastructure, and education that separate lower-income families from their more affluent counterparts.

How can we tackle this seemingly arbitrary yet deliberately divisive system?

In theory, policymakers could allow students to enroll in any public K-12 school in any district. Expanding choice options would enable at least some students to opt into schools unconstrained by district boundaries. (Some places do this, but with minimal effect.) But while a legitimate part of a solution, expanding open enrollment and school choice options is at best a partial fix. For one, practical barriers like transportation and the capacity of high-demand schools to serve all the students who want to go to them are problematic, even where state and local policies already permit students to attend public schools of their choosing. 

Plus, [pullquote]changing enrollment patterns and offering more choices to families fails to address the root cause of funding inequities between districts, which stems from the role of local property taxes in school funding.[/pullquote] Overall, public schools get about 90% of their funding from a mix of state funding and revenue raised locally within districts, primarily through property taxes. The median district gets 43% of its funding from local taxes, primarily property taxes. In many cases, districts that are willing or able to raise more tax revenue locally are simply able to provide more resources for local schools. 

This becomes a challenge when there are big differences in the value of taxable property district to district. Inequity emerges based on two primary factors: (1) district boundaries that sequester more expensive homes, businesses, and other taxable property in some districts unevenly, and (2) state funding policies that don’t go far enough to make up the difference between districts’ ability to raise revenue for schools by taxing those properties.

Across the metropolitan areas we examined, we found almost 500 instances of “barrier borders,” or districts located adjacent to one another with dramatically different levels of affordable rental housing for low-income families. In these communities, families could literally be barred from better-resourced schools located in the next neighborhood. The barrier border effect is significantly less prevalent in states where school district boundaries encompass larger areas, like whole counties, as is common in the southeast.

We see the impact of these factors most egregiously in places where school district boundaries are small, gerrymandered puzzle pieces that capture or exclude individual neighborhoods. For example, in northern New Jersey, 500,000 students across five counties attend school in 144 school districts. Compare this to the entire state of North Carolina, which serves three times that number of students in just 114 school districts statewide.  

Fundamentally, [pullquote]families should be able to access excellent public schools that meet their needs regardless of where they live.[/pullquote] That’s a complicated issue that goes beyond dollars and cents and includes questions of school quality, the availability of programs and supports for a range of student interests and needs, and family preferences for their children. But to address the foundational issue of inequities created by district boundaries, housing affordability, and funding structures, several things need to shift:

• Reduce or eliminate reliance on local property taxes to fund schools. Funding schools at the state level or leveraging state funds to make up for disparities in local funding can level the financial playing field district to district.
  
• Redraw school district boundaries to eliminate small, gerrymandered, and exclusionary districts. Larger districts can decrease the variability in the mix of property captured within boundaries, evening out the value of the tax base among districts.
  
• Expand open enrollment or other choice-based programs. This option decouples residential addresses from school assignments across district lines, improving access to preferred schools.
  
• Increase the supply of affordable housing. State and local governments can increase availability of affordable housing options across communities, rather than concentrating them exclusively in certain neighborhoods.
  
• Improve the distribution of federally subsidized housing options. The federal government could exert more influence over the location of housing units it subsidizes to distribute options more broadly, opening more communities to families with diverse economic resources.

[pullquote]School choice must be part of the solution, but it is not a sufficient solution.[/pullquote] All students, including those who prefer to attend schools close to home, should have access to educational opportunities — with fair and equitable resources available to fund their success. Inequity created by a blend of housing, district boundary, and funding policy challenges must be solved with solutions that address each part. Only then can we build stronger education systems on a foundation of equity.