How Housing Policies Serve as Education Policies

Jake Fender

Tran Le

How Housing Policies Serve as Education Policies

I. Executive Summary

This policy memo describes the historical and contemporary mechanisms by which government and individual action maintain both housing segregation and school segregation, as the two forms are inextricably linked. We first explicate how government action, private actions based explicitly on race, government inaction, and private, neutral choices with racial impacts all normalized racism that led to housing segregation. We then examine how school funding and school quality is affected by the wealth inequality resulting from housing segregation. Lastly, we investigate the exclusionary zoning laws that perpetuate housing inequality, and suggest interventions that may alleviate the current dependency of school quality on housing.

II. Introduction

Schools are at the heart of the democratic ideals so loved by the United States of America. Scholars from a variety of time periods have emphasized how education can foster critical thinking and dialogue, and give citizens the tools they need to live flourishing lives in a well-functioning democracy (Gutmann). However, an education system can only be considered a boon to democracy if it, in the spirit of the democratic tradition, is provided to each and every citizen regardless of their background. This is not the case in the United States today: a history of racialized housing segregation combined with varied funding formulae and exclusionary zoning laws have contributed to a vastly unequal educational landscape, resulting in differing degrees of economic success for children from different backgrounds that have potentially exacerbated existing economic inequalities of minority racial and ethnic groups in the United States. Our policy memo aims to explore what has caused this problem and to identify its constituent parts so that we can devise a solution in the pursuit of a truly equal education for every child.


III. Historical Background of Housing Segregation

Housing segregation in the United States has a disturbing history of continued oppression of minority groups, specifically African Americans, by maintaining racialized patterns of housing throughout the nation. Spatial inequality, or segregation by race, is one of the most defining features of American history. The history and current situation of spatial isolation have been crafted, in historical order, by government action, private actions based explicitly on race, government inaction, and private choices based on non-racial factors that nonetheless have a racialized impact. It is important to note that these are often happening simultaneously, and they are only grouped in this historical faction because they have been the dominant force driving racial segregation at the time listed relative to the other events (i.e. government action is listed first, not because it is over but because it was the most significant force shaping early housing segregation).

Government Action
The United States federal government played a crucial role in the formation and solidification of racial segregation. In the same sense that the growing wealth inequality has been a stretching away of the upper crust and not simply a widening of the income distribution, the federal government exacerbated existing wealth inequalities by giving certain families (white families) a significant boost in the form of loans for suburban housing. Federal government action, the prototype of which is the lending practices of the Home Owners’ Loan Corporation, consistently invested in white homeowners, and therefore promoted white flight and invested in the formation of white communities, at the expense of their black counterparts (Massey, p. 51). This public endeavor was the beginning of a long history of racial housing segregation which persists to this day.

Private Action with Racialized Intent
Another way in which racial segregation has been cemented in the American housing landscape is through private preferences based explicitly on race. These insidious, racist perceptions range from intimidation and harassment of blacks moving into white neighborhoods in the 1950s to the usage of racial covenants to ensure that neighborhoods would remain white, to the common practice of “white flight” in which white residents will flee from a neighborhood they fear is “becoming black” (Massey, p. 38). Modern-day sensibilities allow us to see this type of behavior in the past and condemn it, but the truly insidious nature of this aspect of the issue is its deceptive nature: because of the social desirability effect – essentially, a reporting bias in which people do not disclose truly racist motivations because we collectively repudiate racism as a concept, at least in name – people today would most likely not admit to moving out of a neighborhood due to an increase in its black population even if that were the reason. This should not blind us to the fact that it could very well still be a motivating factor in affluent whites’ decisions to move, and continues to shape the housing and educational landscape to this day.

Government Inaction
Jacob Hacker and Paul Pierson theorize about “policy drift,” which is “the politically driven failure of public policies to adapt to the shifting realities of a dynamic economy and society” (p. 170). Although they use the idea to discuss issues related to economic inequality, the concept can also be applied to housing inequality. By allowing segregation to persist and not taking an active role in addressing the underlying causes of spatial inequality (an intense history of racial isolation and disinvestment in communities of color), the federal government has a role in sustaining the current regime of segregation.

Private Action with “Neutral” Intent
The fourth area impacting residential segregation, and the one proving hardest to combat, is the exacerbation of spatial inequality by the choices of private citizens that are not motivated by race, but by other factors that are often correlated with race; these factors have racialized consequences when acted upon. In “Shopping for Schools: How Public Education and Private Housing Shaped Suburban Connecticut,” Jack Dougherty demonstrates how “the connection between private housing and public schools has helped increase the region’s racial and economic stratification,” (p. 219).  
In this example, white citizens based their decision about where to live on the school districts that served the area, using test scores to select school districts in which they wanted their children, and therefore which neighborhoods to which they wanted to move. A combination of two factors – 1) that black students, on average, perform at a lower level than their white peers on standardized tests (Jencks and Phillips), and 2) that school funding is often based on local property taxes – meant that these decisions by white parents, though based on something as facially neutral as a school’s average test scores, actually ended up increasing racial stratification in the area.

What does this mean for education?

In the sections below, we will explore how varying funding formulae and tax bases (based on a history of housing segregation and concentrated poverty) have provided an unequal financial footing for schools, but first, it bears mentioning how low-income status and mobility affects the individual student, independently of their schools’ funding sources. In the United States, residential mobility, or the frequency of changes in residence, is higher for both racial minorities and for low income families (Ihrke and Faber). This, combined with the fact that there is a directly negative relationship between residential mobility and student academic performance, particularly for students in low-income or single-parent families (Scanlon and Devine), shows how mobility patterns based on a long history of housing segregation can have direct impacts on individual students before they even affect institutional matters like funding.


IV. Disparities in School Funding

The Dougherty article, discussed above, is a prime example of how housing markets and schools interact, but even moreso, how the funding formulae for schools can disproportionately favor students from higher property-value areas as opposed to their counterparts in schools located in areas where property is worth less.

We have included a chart below, detailing interstate differences in per-pupil spending during 2014. We obtained the data from a publication titled “Governing”; the original data source is the U.S. Census Bureau Annual Survey of School Systems (“Education Spending”). The reality of the situation, however, is that spending differences are not just dollar amounts – spending $100 on a child in rural Alabama will probably go a lot further than $100 in Manhattan because purchasing power changes depending on where you’re at in the United States. To account for this, we used a metric to convert the 2014 per pupil spending amounts to amounts adjusted for how far money goes, varying on a state by state basis. We were able to do this by using a figure called the liveable wage – a product of a 2007 project by Dr. Amy Glasmeier at the Massachusetts Institute of Technology, called the Living Wage Calculator (Glasmeier). The living wage for a state is the lowest per hour wage a worker would have to earn (assuming a forty-hour work week) in order to make ends meet. It is useful for measuring purchasing power variance between states because as the amount of purchasing power changes by state, so will the minimum living wage – if the cost of living is higher, then people will need higher wages.

Of course, interstate variance isn’t the only inequity in school funding. The chart below displays, district by district, how funding per pupil differed from the national average in 2016.

Challenging the Existing Funding Framework for Disadvantaged Students

Title I of the Elementary and Secondary Education Act (ESEA) is a program designed to funnel money into schools serving significant proportions of students in poverty (“Improving Basic Programs”). This federal program was designed as a way to ensure that students in poverty had access to resources to help them meet state standards, and progress at a similar rate to their non-poverty classmates. Unfortunately, however, Title I falls short: a report from the Brookings Institution highlights the problems with the funding formulae: money is indeed going to high-poverty schools, but not necessarily to students living in poverty; once a school receives a funding designation, that money can be used across the board for any student, and the allocation is often based on performance. Thus, if a student in poverty is performing well, they may never see the effects of funds intended to combat their poverty. (Dynarski and Kainz).

In order to combat economic and, in turn, school inequality, the federal government could mandate that school funding be linked to individual children rather than schools, such that a child could apply to multiple public schools in his or her area (Whitehurst). Because of the circumstances we have described already, the ability for families to leave school districts with which they are dissatisfied is largely constrained for low-income populations that are, ironically and unfortunately, most likely served by low-performing schools. Our current system leaves the poor and immobile to inferior schools and gives school choice to those who benefit most from the status quo. If school funding followed students instead, then local property taxes would not dictate the number of resources and quality of a school, and this new competitive nature would compel schools to be more productive in order to retain students, and thus, funding (Fordham Institute).

However, we must acknowledge that a few steps must be taken before this possible solution would even be able to occur, and that even if per-pupil funding were to occur, it would not guarantee all students an equal quality education, due to the many factors that constitute school quality. The federal or state governments would have to first level the current playing field to compensate for historical under-investments in some schools compared to others. Policymakers would also have to incentivize high-quality teachers to work in high-poverty schools; maybe this could be accomplished by higher salaries or improved working conditions (Clotfelter, Charles, Ladd, Vigdor, and Wheeler). The transition to a new education finance system would be difficult in practice of course, but in the long term, a more equitable approach to how schools receive funding may bring about a more equitable education system as a whole (Baker, Bruce, and Green).


V. School Test-Score Gaps, Housing-Cost Gaps, and Restrictive Zoning

Knowing what we do about the historical background of housing segregation along with the impact of funding on school quality, it is clear that, across income and racial or ethnic groups, the access to high-scoring schools is severely unequal. While parents of disadvantaged students do attempt to enroll their children in higher-scoring schools (when knowledgeable about the data) (Hastings, Justine, and Weinstein), middle and upper-class parents are often more successful because they are not confined by local governmental laws that block low-income students and their families from living near or attending these schools.

In 2012, the Brookings Institution did a study using data from the 100 largest metropolitan areas in the U.S., and found that housing costs an average of 2.4 times as much, or nearly $11,000 more per year, near a high-scoring public school (based on state test scores) than near a low-scoring public school (pg. 14). The “housing cost gap” refers to the difference in median housing costs (rental or mortgage payments) between neighborhoods with the highest-scoring and lowest-scoring elementary schools.


Additionally, because wealthy residents of major metropolitan areas typically live in municipal jurisdictions or zoning districts (homogeneously zoned areas within a jurisdiction) that discourage or even overtly block the construction of less expensive housing units (Fischel), low-income residents who wish to send their children to better schools in those areas are unable to do so. We can see how pervasive zoning restrictions are in the U.S. by how, for example, 84% of jurisdictions impose minimum lot size requirements to some degree (the average jurisdiction with zoning power has a minimum lot size of .4 acres), and 22% of jurisdictions have laws that forbid housing units on lots smaller than 1 acre (Gyourko, Joseph, Saiz, and Summers).

Zoning regimes are a crucial factor in the cost gap within large metro areas between housing in neighborhoods with high-scoring and low-scoring schools: the Brookings Institution found that areas with the least restrictive zoning have housing cost gaps that are 40 to 63 percentage points lower than areas with the most exclusionary zoning (pg. 16).

Thus, school test-score gaps, housing-cost gaps, and levels of restrictive zoning are all interrelated. Similar to how explicitly race-based policies (such as covenants) and discriminatory lending and real estate practices we previously discussed kept blacks out of white neighborhoods, restrictive zoning in the present day keeps low-income families out of wealthy neighborhoods, which contributes greatly to the school test-score gap between low-income children and their peers. So long as test scores are used as an indicator of school quality, parents will choose schools with better test scores – and of course, since middle to upper-class parents are more able to have their children attend their desired schools, and zoning laws better enable housing segregation by class, then school segregation is a function of housing segregation.

Challenging the Existing Zoning Policies

At the national scale, the most radical reform to combat housing segregation on a policy level would be to abolish exclusionary zoning. The justification for zoning is superficially in terms of controlling externalities, but zoning is frequently put in place due to other motivations – the two main ones being a) fiscal zoning, which is intended to improve a local jurisdiction’s tax base by attracting occupants whose tax contributions surpass their use of public services, and b) exclusionary zoning, which is meant to exclude or restrict a member of a racial, ethnic, or social class from occupying a jurisdiction (Pogodzinski, pg. 145). While exclusionary zoning is commonly regarded as illegitimate and fiscal zoning sometimes considered benign, fiscal zoning can still operate in an exclusionary fashion. Typically, the class that is excluded consists of the poor, whose use of public services is expected to exceed their tax payments, and because a disproportionate number of minority households are poor, fiscal zoning serves as an exclusionary filter. If the federal government were able to prohibit local governments from discriminating on the superficial basis of housing type (i.e. single-family attached or multi-family) or size (i.e. lot, floor, or frontage size) that underlyingly denies admittance to the poor, then low-income and minority children and their families would benefit educationally and economically from better schools and neighborhoods.

On a state level, housing and land use legislation could be enacted to generally increase economic integration, and more particularly ensure low and moderate income housing in the suburbs. In New Jersey, Massachusetts, and New Hampshire, enforceable “rights” to develop affordable housing in towns that are not providing their fair share were created for developers to challenge denials in court in an expedited manner (Von Hoffman). It is also possible to mandate that new construction include a certain portion of affordable units; in California, municipalities are required to include planning for affordable housing in their zoning laws. However, if states do not wish to force affordable units to that extent, they can incentivize it rat: in New York, developers are rewarded with a “density bonus” if they include more affordable housing (Center for Housing Policy).

On a regional level, improved zoning coordination could promote a higher density of people where the space is already available. Portland, Oregon, has enacted such a regional planning method by limiting the number of developments in outer suburban areas, resulting in a decrease in segregation, which may have also contributed to Portland’s low test score gap (Nelson, Arthur, Sanchez, and Dawkins). In this way, zoning laws can be written with the intention of inclining people to move to currently low-dense, but convenient areas that are located near job centers or have public transportation routes. Alternatively, but in a similar manner, zoning laws can prevent people from constructing further developments in the suburbs, as this would exacerbate segregation since only people who can afford to move to new, and presumably more expensive, homes will do so. As long as homeowners in affluent suburbs are allowed to benefit from the high density of cities (where they tend to work or find business and social networks) without accounting for the higher costs of public services to support it, they will continue to be barriers to inexpensive housing in their jurisdictions.


VI. Conclusion

The relationship between housing and traditional public schooling has long been evident: the neighborhood a student lives in will determine the school he or she will attend, and to the extent that school quality varies by location either due to differing tax bases or other location-specific variables, the neighborhood one lives in will determine the quality of education one receives. As long as American citizens value neighborhood schools, discussions of school desegregation policies must be rooted in data about residential segregation. A long history of housing segregation and concentrated poverty has also affected school financing, with certain schools benefiting more from local taxes than others affected by lower property values. Consequently, housing policies are de facto education policies, and vice versa.  

Because of the many factors involved in the intersection of housing and schooling, it is a tremendous challenge to extensively improve the quality of education available to low-income children. However, there is promise in reforms to funding, housing, and land use policies that may be implemented at all levels of government in order to make educational opportunity more equal. Inclusionary zoning and other laws in favor of affordable housing must be enacted in conjunction with more sweeping laws that inhibit affordable housing, or even prospective inexpensive housing, where it is most needed. Overall, while other research regarding housing and school segregation focuses on their effects – specifically, detrimental ones on children’s social and academic development (Jencks) – our policy memo rather examines how housing policies in particular can tackle housing and school segregation, and thus, act as education policies.

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