Closing, relocating schools could affect property values

With some public schools in the county set to consolidate or close after changes approved this month, many in the public are wondering about the impacts.

But the changes, such as shifting popular and high-performing academic programs from one neighborhood to another, could affect more than parents and students.

Experts say the major changes set for Charlotte-Mecklenburg Schools could affect estate values, too.

“There’s a strong connection between property values and schools,” said Carol Lloyd, executive editor with GreatSchools, a San Francisco-based nonprofit that rates and reviews more than 200,000 public and private schools in the country.

“If a one-time star school starts losing ground, then those families that put education first, many of which are middle class and highly educated themselves, will move elsewhere,” she said. “Property values in those areas drop, and the communities and towns where those people move, which likely have strong schools, will see their properties values go up.”

MORE COVERAGE: Neighborhoods brace for loss of libraries, schools, rec centers

It’s a scenario that could play out in Charlotte as changes within CMS take effect in the 2011-12 school year.

This month, the Charlotte-Mecklenburg Board of Education OK’d changes to more than 60 of the district’s 178 schools. According to CMS, the changes include closing 11 school buildings, consolidating students and programs at five schools, relocating two programs, expanding eight schools to prekindergarten through eighth grade and one to kindergarten through 12th, expanding one school to grades sixth through 12th, adjusting boundaries for 13 schools, providing targeted assistance to nearly 30 schools and creating two home schools and two magnet programs.

It’s widely accepted that homes near good schools sell for a premium, but it’s less clear whether top-notch schools boost housing values or rising home values boost school performance. It’s possible both are simply a reflection of the types of people moving into an area, said Lloyd, who also wrote a real estate column for the San Francisco Chronicle from 2000 until this year.

Property values and schools

While property values are linked to schools, home prices typically drop far faster than they increase. Even if a school system introduces a magnet program to improve academic achievement at a troubled school, people’s perception of that school, and any fluctuation in home prices, can be slow to come.

“You have to have the pioneering families who are willing to move there during the first few years,” Lloyd said. “It takes a while for the average family to say, ‘Well, I know the school used to have a bad reputation, but let’s give it a try.”

Conversely, if a school closes or loses its magnet program, it can have an “instantaneous negative effect” on property values, she said.

In a survey released Nov. 5 by the Chicago-based National Association of Realtors, 48 percent of respondents with children said the quality of schools was the most important factor when selecting a neighborhood to move to, said Walter Molony, senior public affairs specialist for NAR. When selecting somewhere to move, 43 percent ranked convenience to schools as their top priority. The survey polled nearly 9,000 people across the U.S.

Unpopular changes

Among unpopular CMS changes slated for next year, Davidson IB Middle School in Davidson will close — it’s uncertain what will become of the dilapidated building — and students will be sent to Alexander Middle School in Huntersville.

Davidson Mayor John Woods said he doesn’t expect moving the International Baccalaureate program from Davidson will have a measurable effect on property values.

“Although it’s highly unlikely, I suppose a long-vacant building might have some negative effect on neighboring properties, but we certainly can’t imagine that site becoming neglected and an eyesore,” he said.

Huntersville Mayor Jill Swain said students from much of north Mecklenburg County are in the Davidson IB program.

“People make the effort to get their children to the program, not the building,” she said.

Moving the program at Alexander will add to Huntersville’s quality of life, she said.

‘Lack of stability’

Saundra Martin, a real estate instructor at Central Piedmont Community College, does not anticipate changes in property values as a result of CMS’ closures and consolidations.

“At this time, school assignment is a very small part of an overarching problem: the economy,” she said. “However, the uncertainty of the direction of Charlotte-Mecklenburg Schools may negatively affect the growth of the entire county. This is the kind of uncertainty, viewed as lack of stability, that could possibly dissuade business and industry from selecting Charlotte as a place to do business.”

Compared with Mecklenburg County, smaller counties are more likely to see a spike or drop in property values because of school changes, Martin said.

Dustin Read, associate director of the Center for Real Estate at the University of North Carolina at Charlotte, said there’s definitely a connection between property values and proximity to schools. But there’s not much research about how a school’s academic programs impact property values,” he said.

“Generally, studies focus on proximity, and you get diverse findings,” he said. “Often there’s a positive proximity effect associated with elementary schools and a neutral or negative property effect of high schools. A lot of that has to do with traffic congestion and noise associated with high schools that you don’t find with elementary.”

Read said research that looks at the connection between schools and property values is often problematic because it’s difficult to disentangle what impacts schools are having versus other infrastructure.

“You’re going to see higher property taxes in Davidson than you see in Huntersville,” he said. “Maybe there’s better schools in Davidson, but there might also be better roads, parks and other public infrastructure, so it’s difficult to make a distinction. That’s typically why you don’t see these well laid-out studies that look at school issues.”

Sam Boykin can be reached at [email protected].