Toward School Improvement Districts: School Quality & the Equitable Revitalization of Neighborhoods

High housing costs and variation in the willingness to pay for school quality helps foster regional income inequality across space and the relegation of low-income families to neighborhoods with low quality schools. This dynamic in part, explains why Philadelphia’s public school system has failed; why its children are under-educated and why despite renewed demand for housing in certain neighborhoods, the City still struggles economically. Nevertheless, this research demonstrates econometrically that Philadelphia households are willing to pay a significant price premium to live in neighborhoods with high quality public schools. This fact is used to motivate a new intervention that leverages the housing investment of the middle-class to realign the supply of and demand for public goods like neighborhood schools. The proposed program repurposes the Improvement District framework to fund new local school quality. The equity component of the plan, it is argued, can potentially break the spatial pattern of income segregation by fostering mixed-income neighborhoods and diminish the threat of displacement which will likely occur as new school quality is capitalized in to local home prices. It is concluded that schools are more than drivers of human capital development, they are also engines of neighborhood economic development as well