Crozet Housing Prices and School Quality

Crozet has traditionally been regarded as having high-quality public schools; as such we benefit from the market created by our schools.

Do better schools increase house prices? From my perspective as a Realtor in the Crozet area, the answer is yes. I have never had buyers tell me that they wanted to live in a bad school district; but virtually every single one – whether they have kids or not – wants to be in a good school district. Frankly, I don’t need metrics or analysis or data to support my conclusion; I know that people buying homes in Charlottesville and Albemarle want good schools.

All the data in the world isn’t going to change my opinion, either as a Realtor or as a parent, that good, quality schools matter – to our kids and to our housing values.

From The Impact of School Characteristics on House Prices: Chicago 1987-1991

For many people, an important consideration when buying a house is the quality of the local public schools. There is a general perception that, all else equal, houses in better school districts will cost more.

Our results indicate that individuals pay attention to both per-pupil expenditures and test scores when deciding where to locate. However, when purchasing a home, individuals do appear to consider the current test performance of students in the local school rather than the extent to which a community’s schools contribute to a cohort’s test performance.

So what? What happens to Albemarle County home values if:

1 – Albemarle County schools cannot trim the fat sufficiently and
2 – They have to make so many dramatic cuts?

This is an email sent by the Albemarle County Parents’ Council with five attachments that will help you get acclimated … before the public hearing tonight at 6:30.

And now the meat of the post – if I’m a homeowner in Albemarle County, what are you talking about? How much more would I pay in taxes?

Brian Wheeler has presented a post with hard numbers – numbers that put into context what an increase in property taxes would mean for you – something that has been mostly lacking from most discussions I have read.

The Albemarle County Public Schools budget is now facing catastrophic cuts if we do not find new sources of revenue. This is the result of the national economy, declining sales taxes, declining property values, a proposal to lower taxes collected in Albemarle, and significant state funding cuts for education.

… In an effort to get my head around the numbers, I have prepared the attached spreadsheet which evaluates (to the best of my ability with the data available), the impact of the different budget scenarios and what different property tax rate increases necessary to close the funding gap. (Acrobat PDF); or (Excel spreadsheet)

If you download the Excel spreadsheet, you can even plug in your own home assessments from 2009 and 2010 to measure the personal impact of adjusting the tax rate. At this point in the process, I don’t like trying to address a budget challenge by manipulating the tax rate, but I think the public deserves some factual information about the different scenarios and how that might impact their personal pocketbooks. At this point, the burden has been put on local government and it has few revenue tools at its disposal. We all need to understand the cost-benefit of the status quo, the current tax rate, which in reality is a tax reduction.

In the analysis I have provided, here is the bottom line for the median household (2009 sales price) in Albemarle.

• With the worst case state funding scenario (new reductions of $9 million), a property tax rate of 86.5 cents would fund Dr. Moran’s budget with only Tier 1 cuts implemented. That rate would increase ANNUAL tax payments by $272.08 for the median priced home when compared to 2009.

• In the best case state funding scenario, a property tax rate of 81.9 cents would balance the budget and increase ANNUAL tax payments by $146.19 for the median priced home when compared to 2009.

This discussion at the Daily Progress was pretty informative.

* Thank you to Deedstreet for pointing me to the below-referenced study.

The quality of local public schools is widely believed to be a key determinant of housing prices.1 However, the strength of the consensus is puzzling, given the formidable empirical challenges facing any homeowner or empirical researcher seeking to answer the question carefully.2 First, good schools usually come bundled with other neighborhood qualities– such as proximity to employment, shopping and recreational conveniences and neighborhood peers. Because the homebuyers who enjoy (and can afford) such amenities tend to congregate together, it is difficult to isolate the effect of schools from the effect of these other traits that accompany good schools. Second, it is difficult to disentangle the valuation of the schools themselves (school facilities, curriculum, teachers and principals) from the valuation of the quality of peers available at the school. Common measures of school quality (such as test scores) typically reflect both the quality of the education being offered and the characteristics of the incoming students.3 It is unclear whether homebuyers are paying for quality schools or quality classmates
for their children.

Google Rocks.

Personally, I’d feel a lot better about all of this if I trusted the government. (I’m surprised you made it to the bottom of the post)

Originally posted at the Charlottesville real estate blog, RealCentralVA.

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12 Replies to “Crozet Housing Prices and School Quality”

  1. Thanks for putting all of this together Jim. Everyone should read the whole thing. All of this is hitting the community very quickly and at a time when we are all dealing with the additional challenges that the weather has created. We have the opportunity to let our opinions be heard but we need all of the information to form educated opinions. Brian Wheeler has put some good info out there. Thanks again for doing some of the hunting and gathering for us.

    1. You’re quite welcome, Ginger. I hope more people take the time to get educated, involved and informed; It’s the only way to exert influence over the decisions being made, and we all benefit from good schools.

  2. Thank you Jim. The best way everyone can trust the decisions of the loval government is to become involved. You’ve provided a great source of information.

  3. Jim,
    I don’t understand why you added your personal statement at the end. The fact is we ARE the government (by the people for the people remember?), and stating it as such implies the government is some sort of alien uncontrollable creature.

    This false analogy is always espoused by many, and used as an argument to cut and cut and cut taxes, and “starve the beast”. However it is this “beast” that we have to rely on, and provide the needed services for our society to function and prosper, whether you like it or not.

    By stating your “distrust”, you just set yourself up for the worst case scenario coming true, i.e., deprivation of schools of their necessary funding to provide decent education and loss of a couple libraries along the way. (Well, these are bad and untrustworthy anyway right? therefore deprivation is the proper thing to do…)

    Be careful what you say, and be aware you keep reinforcing these bad sentiments (you know conditioning is a real phenomenon: people start believing nonsense when they hear it often enough).

    Yours truly

    1. This is my email response to Ron_Crozet:

      Frankly, I don’t feel that we are the government anymore. The government takes our money, convinces many that they are giving us a “refund” when in fact they have taken our money when they should not.

      I am a huge advocate of the Fair Tax, and believe that is the most representative form of taxation, but every elected leader to whom I have emailed or spoken sees it, essentially, as a means by which to effect their own power and leverage rather than the peoples’.

      Government relies on peoples’ ignorance, myopia and complacency.

      I see the Albemarle and City’s ability to spend the windfalls that they received over the past few years via property taxes as bordering on criminal, and definitely irresponsible.

      I believe that government is run by self-interested, power-hungry people whose primary concerns are their own.

      I would gladly pay an additional 10 cents per $100 of assessed value if I truly believed that government would use it wisely and value it as much as I value every dollar I earn. But I don’t think they do.

      But, you are absolutely right that I should have left that sentiment/statement out of my post, the goal of which was to educate, inform and call people to action.

      Thank you sincerely for reading and for calling me out.

    2. And the last thing I’ll say on the greater political mistrust and dysfunction actually comes from Peter Fenn, via Politico regarding Evan Bayh:

      If what Evan is saying about the political environment in Washington is truly the reason for his departure, and I believe it is, that should mean something to people on both sides of the aisle. This is not the same Senate that his father served in for 18 years, this is not the same public service career that Evan signed up for at age 30. Partisan gridlock, vitriol dripping from nearly every press release, 60 votes accepted to rename a post office in the U.S. Senate, serious problems swept under the rug because Congress can not function — this is not a blip, this is a sad commentary on our politics. When will the current crop of elected representatives realize that the public is truly fed up with their inability to solve the health care crisis, attack the deficit, create an economic climate that creates good paying jobs, improve out education system, the list goes on and on.

      Of course these aren’t easy, of course they will take time and real effort, of course they will be hotly debated and discussed. But, after all, why did these folks run for office in the first place? Hopefully, not simply to get reelected again and again, with little to show for the personal sacrifice and tough campaigns.

  4. Besides, the information you share with us is really great. Personally, I would not mind chipping in a higher tax rate to offset the budget shortfall, and neither should anyone with children in the schools (and those who use the libraries). Those should be the majority of households anyway, or am I wrong?

    Otherwise it starts to look like what the DP published: Albemarle Co is a great place to retire, but ONLY for the retirees. It sucks for young families who have to rely on the schools and public libraries to ensure a good eduction for their offspring. I am sure for most, private schools are far too costly (at least far more costly than an increase to an 86 c tax rate for instance- still well below the city of Charlottesville rate that on top that receives 18 million from the revenue sharing agreement from the county).

    1. Your comment raised an interesting thought – what if we could raise the tax rate by 10 cents or some other rate, and specifically exclude that from the revenue sharing agreement?

      Why are property taxes the primary means by which schools are funded?

  5. There is nothing wrong with an opinion being included in any article written here. Since you seem to be willing to pay a higher local tax rate
    would you be willing to respect other opinions and spend the money on other things? Wasting money on Streetscapes does not seem important now. The size of our local govt. has grown out of control. We need to get
    rid of all the consulting fees for a start. Every year the crying is on for more money for schools. No matter what. I think that the current trend
    is for an inclusive County budget, not just schools. The last elections showed that. The County should take a hard look at the schools and try
    to determine what is really needed. They should also do the same to all
    the other critical functions that they support. The current model that we
    are living under was built on the false hope of real estate values that could not be maintained, of quality job loses that could not be replaced, of personal income forever lost. We cannot afford this model any more.
    Hopefully the BOS will do what is needed…

  6. Jim, thinking of what is best for ALL of Albemarle County and using your blog as the basis, I think it best to improve the crappiest of ACPS’s first.

    Putting a couple of million dollars into Brownsville for instance, would help keep Crozet area home prices stable or increase a little bit, but the tax base for the County is not effected greatly one way or the other.

    Now if we were to put that same two or three million dollars into a school like Yancey what would that do for the tax base? Comparing Brownsville to Yancey is like comparing a Fighter Jet with a caveman throwing a rock. By investing into Yancey to make it just EQUAL to Brownsville the County would see a huge return on it’s investment. Home prices in the Yancey district would go up exponentially, some could increase as much as 20% or more. Builders would build new homes because of the investment in Yancey and those homes would be more affordable than those in Crozet.

    Yes, I agree good schools help keep real estate prices up but taking crappy school buildings and making them into exceptional school buildings give greater value to the community as a whole. But when some schools are Country Clubs and others are dilapidated shacks the whole community suffers and should be ashamed. We cannot continue to neglect our County’s poor and not treat ALL children of Albemarle EQUALLY.

    Have you noticed our President’s skin? Maybe it’s time the Crozet/Ivy fat cats take a field trip to Esmont or Keene to visit those on whose backs they are walking.

    Mary Mary

  7. Mary Mary –

    Thank you for your comment. I was with you until you mentioned our President’s skin; I’m not sure how that is even remotely relevant or who the “fat cats” are.

  8. Hmm… I think that you are getting close to finding out what people really think. Crozet is not entitled to any more County funds than any other area. Opening your eyes will show you the poverty that exists. I think
    that even Charlottesville has close to a 25% poverty rate. People moving in to Crozet seem to arrive with a fantasy. Can’t walk without sidewalks,
    can’t hike without nature trails, love the place but want it redesigned to
    suit. Can’t live without multiple coffee shops? Travel the County, you
    won’t be in Pleasantville any more…

Something to say?