Column: How the next president could address both housing costs and school funding
Published: 09-13-2024 5:34 PM |
Both Presidential candidates and numerous gubernatorial candidates have made “affordable housing” a hot button issue in 2024. I put “affordable housing” in quotes because the definition of “affordable housing” and who would qualify for it is unclear.
Both parties seek “middle class” voters. According to Investopedia, the median income regardless of household size in 2023 was $65,000 which several web sources indicate would qualify a prospective homebuyer for a mortgage of $175,000.
Finding such a home in our region is virtually impossible. Zillow reports that the average home price in New Hampshire in 2023 was $485,943 and Vermont’s average home price was $402,217. Neither of the “solutions” offered by the presidential candidates are viable. It’s hard to see how the $25,000 grant proposed by the Democrats or the GOP’s solution to deport of millions of immigrants would help more New Hampshire or Vermont families afford a home. Neither candidate can offer an easy national solution to the housing crisis because any solutions will require a coordinated effort by all levels of government.
Having spent decades working and living in economically diverse schools and school districts, I have a proposal for the candidates that might address the most insidious factor affecting housing values: the inequitable funding of public education.
Communities that have good-to-excellent public schools have high-to-astronomical housing costs. Communities with underfunded public schools have lower housing costs. Prospective homeowners with children are willing to pay a premium to attend the best schools possible. This premium drives up the price of housing, which in turn drives up property valuation, which yields higher property tax revenues.
These disparities in valuation underpin the inequitable funding of public schools, an inequity that perpetuates the socio-economic sorting by ZIP code and that exacerbates the NIMBY attitudes that lead affluent communities to resist “affordable housing” through zoning ordinances and strict building codes.
Since property taxes are the primary source of funding for schools — especially in states like New Hampshire that have no broad-based income or sales taxes and limited state funding — it creates a virtuous circle of school funding for affluent communities and a corresponding death spiral for property-poor ones. Because affluent parents can afford to pay more for their houses, it yields a greater tax base for their communities which provides more revenues for their public schools. Those well-resourced schools are then able to attract the best teachers and provide a wide array of offerings for their children.
Unfortunately, communities with homes priced at $175,000 have lower tax bases and, consequently, under-resourced schools.
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An examination of local real estate values illustrates how this plays out. As noted above, the average cost in New Hampshire for the past year was $485,943. Yet Zillow reports that the average home value in Claremont is $255,529 and the average home value in Hanover is $941,427. The disparity in Vermont’s Upper Valley communities isn’t quite as extreme. Vermont’s average home cost is $402,217 yet Zillow’s average home value in Springfield is $240,070 while the average home value in Norwich is $802,611. This means that raising the tax rate on a home in Hanover yields 3.7 times more than the same tax hike on a home in Claremont and 3.3 times more on a Norwich home as compared to a Springfield home.
Given this disparity in tax bases, it is no surprise that Claremont sued the state of New Hampshire to get property tax relief, and no surprise that the courts have ruled that the Legislature should provide more state funding to ensure the equity Claremont is seeking. And given the level of state funding the New Hampshire Legislature would need to raise to remedy this disparity, it’s no surprise that days ago New Hampshire House Speaker Sherman Packard and 30 of his GOP legislative colleagues filed an amicus brief supporting a lawsuit asking the New Hampshire Supreme Court to overrule the Claremont cases of the 1990s, cases that ultimately led to the recent court mandate requiring the state to raise an additional $538 million per year. More than 40 states are facing lawsuits on school funding. (Vermont lawmakers addressed their state’s property tax inequities in 1997, with Act 60, which created a state-wide property tax and a system that allows residents below a certain income level to pay taxes on their primary residence based on what they earn.)
In light of this interplay between school funding, the cost of housing and the long-term impact on opportunity for children, my suggestion to both candidates running for president is to make future federal funding for education contingent on the timely resolution of state lawsuits. This same model of contingent federal funding could be used to address the exclusionary zoning practices and over-regulation that local communities enact to make it fiscally daunting to build housing for average wage earners.
The housing problem, the economic divisiveness and public-school funding are intertwined and require systemic change that will not happen quickly. Converting the death spiral facing under-resourced communities into the virtuous circle in place in affluent communities will require a redistribution of resources and a willingness for affluent communities to accept economic diversity. At the very least a proposal to use the limited federal funds for schools and housing to leverage change might be a way to engage voters in a dialogue on these complicated issues. At the most, it could help politicians solve these issues more rapidly, for the benefit of children who are currently enrolled in under-resourced schools.
Wayne Gersen is a retired public school administrator. He lives in Etna.