Education, housing, and U.S. economic inequality

State and local property taxes are critical to the funding of U.S. public schools. This means that wealthy areas with high property values can generate ample revenue to fund their local schools, while poorer areas with low property values have difficulty raising sufficient resources to sustain high-quality programs.

Considering that places of residence are the main source of education funding, how can we improve educational opportunities for those students in high-poverty districts? One solution may be to increase affordable housing in affluent communities, providing some low-income families with access to better school districts.

A recent report from the Southern Education Foundation revealed that the number of low-income students in our public schools has increased at an alarming rate and these income disparities are only widening. Just 25 years ago, less than 32 percent of children in public schools came from low-income families. But in 2013, over 50 percent of public school students were from low-income families, making them the new majority.

According to a new analysis by the Urban Institute, low-income students are over six-times more likely to be enrolled at a high-poverty school, where over 75 percent of a student’s peers also come from low-income families. In a stunning contrast, only 6 percent of middle and upper-income students attend high-poverty schools. Those in high-poverty schools are disproportionately people of color, complicating the milieu even further.

Poverty concentration in public schools poses a significant threat to educational quality because high-poverty schools tend to be significantly underfunded and of low quality. According to the U.S. Department of Education, in 2008, more than 40 percent of high-poverty schools received insufficient state and local funding to serve low-income populations, thus lowering per-pupil expenditures on disadvantaged students. Lack of funding at these schools translates to a lack of educational resources such as highly qualified teachers, advanced placement courses, strong science, technology, engineering, and math programs, and extracurricular opportunities, compromising the channels of support that can help improve low-income students’ educational achievements.

So, how could affordable housing policies improve educational outcomes? Because schools and neighborhoods are intimately intertwined, providing equitable and affordable housing opportunities in more affluent areas could raise educational achievement for those low-income students who reside in these homes. Making more affordable dwellings, however, involves a complicated mix of federal subsidies and vouchers, and an array of state policies and local initiatives. Yet some local governments are innovatively integrating housing affordability across neighborhoods and regions. Decades ago, urban planners largely turned to rent control to place limits on how expensive housing could get. Now, they’re turning to a more comprehensive planning approach known as inclusionary zoning—a mandated land-use policy that requires housing developers to set aside a certain share of units for affordable housing. This agreement is usually accompanied by a host of incentives to the developer, among them increased subsidies to offset the profit losses from offering affordable housing. In some cases, inclusionary zoning is set up to be voluntary, so that in exchange for incentives, developers can choose to include affordable housing units in their developments.

Given the enormous shortage in affordable housing, setting up inclusionary zones is only a small step, and must be combined with mixed-use development to ensure different types of community amenities are accessible to all sorts of wage earners. And there needs to be more “upzoning,” another re-zoning technique that increases the density of housing units within a given zone, in theory allowing more affordable housing units to be created in a mandatory inclusionary zone.

Montgomery County, Maryland is just one of many local governments that employs inclusionary zoning, but it was the first to use these innovative zoning practices over 40 years ago. In the 1970s, Montgomery County required developers of housing subdivisions to set aside 12 to 15 percent of units for affordable housing. As a result, a once highly affluent county began to integrate more low-income families, who, in the process, also gained access to a high-quality, low-poverty school system for their children.

In 2010, The Century Foundation released a report that outlined the effects of Montgomery County’s economic integration on academic outcomes. The study found that, by the end of elementary school, the large achievement gap between low-income students and their affluent peers was halved for mathematics and reduced by a third for reading scores.

There’s definitely more to learn about how to best pair affordable housing practices with education policies. But, if implemented properly, access to high-quality education and affordable housing not only can improve educational results and reduce inequitable outcomes for families and their kids. As we are increasingly coming to understand, more equitable educational opportunities can also mean greater and more sustainable economic growth overall.