Could DC’s Education Reform Redraw the Real Estate Lines, Too?

When you think of DC Real Estate Moguls, the first people that come to mind are investors. The Infamous Donald (Trump), for instance, just broke ground on the old Post Office, promising to turn it into one of America’s finest hotels. However, according to some pundits in 2010, Michelle Rhee, then DC’s Chancellor for Public Schools, was the District’s biggest real estate influencer. In that same deference to education’s impact on real estate, the same might be said about Mayor Vincent Gray today.

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After getting knocked aside by Councilwoman Muriel Bowser in the April Democratic primaries, Gray has made no qualms about going out with guns-a-blazing. He’s willing to take on some issues which are unpalatable to politicians looking towards their next campaign.

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Earlier this month, Gray accepted the June recommendations by DC officials to maintain the public school boundary system. The Washington Post quotes him saying that “the ball got punted down the field repeatedly. No more punting.” Such a polemic issue would usually be a non-starter for politicians seeking re-election. But Gray claims that he’s handling it so that the next administration doesn’t have to face the wrath of the public.

In doing so, Gray may be redrawing more than the school boundaries—but the real estate borders, as well. From the myriad policy options, the officials proposed (and Gray accepted) a proposal that aims to strengthen community involvement in local schools. The goal is to more predictably define each school’s border within which it can pull students. Though there are all sorts of caveats designed to keep both individual students and whole families wherever they currently are, new families are more likely to be subject to their local school. Many also worry that it draws the boundaries more clearly along racial and socioeconomic lines—a longstanding issue of contention.

I’m no policy wonk—so I’m not even going to pretend to dissect its merits or flaws myself. But it seems like there could be some changes in town. Interpret them as you will.

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The above photo leads to an interactive map from the Washington Post shows exactly what areas of the city are facing shifting schools and school boundaries. Perhaps the most polemic—some would argue exacerbated by affluence—is the case of the Crestwood Neighborhood. On the map, you can clearly make out that red bulge West of 16th Street and Columbia Heights, gently nestled into Rock Creek Park. According to some residents, the area has had access to schools in the other historically affluent schools in Northwest DC, on the other side of the park, since 1968. But the reforms would place most students into a new middle school and Petworth’s Roosevelt High School.

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Roosevelt is in the middle of a $127 million facelift. Major renovation is a common theme in DC schools, and may generally help plug the constant drain of professional families—for better or for worse. Crestwood gets a consolation renovated school in exchange for losing access to Wilson High School in Tenleytown. Notoriously the city’s best public high school, Wilson is overcrowded. Roosevelt, on the other hand, is designed for 1,079 students, though the student body totaled only 473 last year. Fewer families in the neighborhood means getting no where near capacity. In fact, the official line is that the redrawn boundaries are designed to accommodate for over-crowding and under-utilization—among the changes that gentrification has brought to the District.

As you know, for decades, most affluent families around DC either (a) never lived in DC or (b) only lived in the district until they had kids—at which point they made the familiar trek to suburbia. However, more and more of these families are sticking around DC—in neighborhoods other than Georgetown. This has led to sky-rocketing property values, turbulence within the school district and a host of other changes. As the “safe neighborhoods” encroach deeper into previously untenable areas, so do suburbia-type families invest in the neighborhoods—for better or for worse.

To be clear, there is significant evidence—though more tempered than once assumed—that school quality impacts home prices. A study from the University of Connecticut last year says that an increase in state-mandated 8th grade test scores by one standard distribution correlated with a $16,650 increase in housing prices for a quarter-million dollar home. (I won’t even attempt to tackle the merits of state testing…) However, that’s holding constant all other variables—such as neighborhood safety, amenities, etc. In addition, there’s evidence that increased school spending boosts housing prices by a factor of 20. That may even put a finger on the scale for DC experiencing a housing bubble—but we’ll leave that for another discussion.

So, you’ll have to do some digging to find out how the school district reform is going to affect your neighborhood—or perhaps you already know. Especially if you’re looking at buying now, take a look at these maps and see where you fit in. Whether you plan on having kids or not (or educating them, or not—none of my business), most people value property with schools in mind. So study the maps and do your research on what the transition will do to your target neighborhood’s school quality. You may find that Mr. Gray is, in fact, the world’s most unexpected Real Estate Mogul.

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