Toward School Improvement Districts- School Quality & the Equitab

University of Pennsylvania ScholarlyCommons Publicly Accessible Penn Dissertations 2015 Toward School Improvement Districts: School Quality & the Equitable Revitalization of Neighborhoods Kenneth Steif University of Pennsylvania, ksteif@upenn.edu Follow this and additional works at: https://repository.upenn.edu/edissertations Part of the Economics Commons, Education Policy Commons, and the Urban Studies and Planning Commons Recommended Citation Steif, Kenneth, "Toward School Improvement Districts: School Quality & the Equitable Revitalization of Neighborhoods" (2015) Publicly Accessible Penn Dissertations 2038 https://repository.upenn.edu/edissertations/2038 This paper is posted at ScholarlyCommons https://repository.upenn.edu/edissertations/2038 For more information, please contact repository@pobox.upenn.edu Toward School Improvement Districts: School Quality & the Equitable Revitalization of Neighborhoods Abstract 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 Degree Type Dissertation Degree Name Doctor of Philosophy (PhD) Graduate Group City & Regional Planning First Advisor Eugenie Birch Keywords City Planning, Gentrification, Housing, Neighborhoods, Regression Discontinuity, Schools Subject Categories Economics | Education Policy | Urban Studies and Planning This dissertation is available at ScholarlyCommons: https://repository.upenn.edu/edissertations/2038 TOWARD SCHOOL IMPROVEMENT DISTRICTS: SCHOOL QUALITY & THE EQUITABLE REVITALIZATION OF NEIGHBORHOODS Kenneth Steif A DISSERTATION in City & Regional Planning Presented to the Faculties of the University of Pennsylvania in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy 2015 Supervisor of Dissertation _ Eugenie Birch Chair, Graduate Group in City and Regional Planning Graduate Group Chairperson _ Eugenie Birch Chair, Graduate Group in City and Regional Planning Dissertation Committee Eugenie Birch Chair, Graduate Group in City and Regional Planning Tony E Smith Professor of Systems Engineering and Regional Science Susan M Wachter Albert Sussman Professor of Real Estate TOWARD SCHOOL IMPROVEMENT DISTRICTS: SCHOOL QUALITY & THE EQUITABLE REVITALIZATION OF NEIGHBORHOODS COPYRIGHT 2015 Kenneth Steif This work is licensed under the Creative Commons AttributionNonCommercial-ShareAlike 3.0 License To view a copy of this license, visit http://creativecommons.org/licenses/by-ny-sa/2.0/ ACKNOWLEDGEMENT This work reflects 32 years of thought provocation and inspiration from countless individuals including family, friends, teachers, peers and scholars - both past and present I am forever indebted to these individuals Thank you iii ABSTRACT TOWARD SCHOOL IMPROVEMENT DISTRICTS: SCHOOL QUALITY & THE EQUITABLE REVITALIZATION OF NEIGHBORHOODS Kenneth Steif Eugenie Birch 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 iv TABLE OF CONTENTS Abstract iv List of Tables vi List of Illustrations vii Chapter 1: Introduction Chapter 2: Literature Review 11 Chapter 3: The University of Pennsylvania & the Penn Alexander School 47 Chapter 4: Research Design 54 Chapter 5: Estimating the willingness to pay for good schools 80 Chapter 6: Planning School Improvement Districts 100 Chapter 7: Conclusion 119 Appendix 1: School outcomes and racial diversity 128 Appendix 2: School Improvement District policy brief 144 Appendix 3: Interview questions 149 Bibliography 152 Index 171 v LIST OF TABLES Table 4.1: Decision Factors Table 5.1: Summary statistics Table 5.2: Results estimated from the model in Equation 4.2 Table 5.3: Findings from other papers using similar research designs Table 5.4: Home prices as a function of distance to the Penn Alexander catchment by year Table 5.5: Results of the regression described in Equation 4.3 Table 6.1: Estimated new tax revenues/burdens generated from most suitable school catchments (5th Quintile) Table T.1.1: Summary statistics for school year 2011-2012 Table T.1.2: Regression summary for reading scores Table T.1.3: Regression summary for math scores Table T.1.4: Regression summary for reading scores using percent white as coefficient of interest Table T.1.5: Regression summary for math scores using percent white as coefficient of interest vi LIST OF ILLUSTRATIONS Figure 3.1: The Penn Alexander School catchment Figure 4.1: Elementary school catchment areas Figure 4.2: Distances from catchment boundaries Figure 4.3: Mean test scores by school catchment: ‘No Data’ refers to nontraditional public school catchments including neighborhood charters Figure 4.4: The weighted overlay technique Figure 5.1: Home price differences for observations on either the high or low test score side of a catchment boundary Figure 5.2: Home price differences for observations on either the high or low test score side of a catchment boundary broken out by test score quartiles Figure 5.3: Statistically significant boundary fixed effects overlaid on mean test scores Figure 5.4: Pairwise test score/home price regressions, 2008-2012 Figure 5.5: Mean price per square foot of home inside and outside the Penn Alexander catchment Error bars represents the standard error around the mean price per square foot Figure 5.6: Inflation adjusted home prices as a function of distance to the Penn Alexander catchment by year Figure 5.7: Non-transformed annual price premium estimations and their 95% confidence intervals Figure 6.1: Site suitability decision factors in vector GIS form Figure 6.2: Site suitability decision factors in raster GIS form Figure 6.3: Final site suitability index and mean index by school catchment Figure 6.4: Most suitable school catchments (5th Quintile) Figure T.1.1: Histogram of school diversity for school year 2011-2012 Figure T.1.2: Histogram of percent white for school year 2011-2012 Figure T.1.3: Spatial distribution of Diversity (D) statistic for elementary schools in Philadelphia Figure T.1.4: Distribution of percent scoring proficient or advanced on PSSA math tests, 2011-2012 Figure T.1.5: Distribution of percent scoring proficient or advanced on PSSA reading tests, 2011-2012 Figure T.1.6: Residual vs predicted plot for Reading Score regression (with zip code fixed effects) Figure T.1.7: Residual vs predicted plot for Math Score regression (with zip code fixed effects) vii CHAPTER 1: INTRODUCTION With enough investigation, it becomes clear that education is among the few policy mechanisms that can solve the city’s most chronic dilemma intergenerational poverty The dearth of educational opportunities in cities has reached cancerous proportions, perpetuating segregation and stifling upward mobility1 This research investigates how school quality affects the economic vitality of urban neighborhoods and the people who reside there Failed schools are often exemplified in cities, working in combination with other symptoms of poverty to paint a vivid portrait of urban decline Although education is a national agenda topic, failed schools, lackluster academic outcomes and new avenues for reform have generated fierce debate over the future urban education in cities like Philadelphia, Chicago and New Orleans What dynamics are to blame and what if anything can planning to remedy the situation? 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Choice Neighborhoods, 38, 133, 147 clustered standard errors, 84, 88, 98 Culhane, Dennis, 78, 112, 113, 133, 169 displacement, iv, 31, 32, 33, 34, 40, 46, 112, 113, 114, 125, 128, 168, 169 economic development, iv, 3, 4, 8, 9, 10, 11, 19, 21, 39, 44, 48, 49, 52, 99, 100, 113, 124, 165, 166, 168 education, 1, 2, 3, 4, 6, 7, 8, 12, 13, 15, 16, 18, 20, 21, 22, 25, 31, 34, 37, 39, 40, 43, 72, 73, 97, 118, 119, 121, 123, 124, 132, 133, 138, 139, 147, 149, 155, 157, 165, 168, 171 equity, iv, 7, 11, 29, 31, 32, 34, 41, 44, 47, 53, 70, 72, 73, 78, 79, 112, 113, 124, 125, 128, 164, 167, 171, 172 exclusionary, 26, 28, 29 Friends of groups, 29, 30, 78, 79, 116, 117, 118, 124, 134, 142, 170, 171 gentrification, 9, 11, 32, 33, 46, 79, 124, 128 Geographic Information Systems, 56 Harlem Children’s Zone, 39, 40, 133 home prices, iv, viii, 21, 22, 29, 30, 32, 46, 55, 56, 58, 61, 64, 67, 81, 85, 91, 95, 110, 118, 125, 166, 167 housing, iv, 11, 21, 23, 24, 28, 29, 32, 33, 34, 35, 36, 37, 38, 40, 45, 46, 58, 68, 74, 75, 78, 79, 85, 86, 91, 92, 93, 97, 99, 109, 110, 111, 112, 114, 119, 125, 128, 146, 147, 167, 169, 171 Improvement District, iv, 9, 11, 34, 42, 43, 44, 45, 55, 56, 69, 70, 72, 73, 76, 77, 107, 109, 110, 111, 112, 113, 114, 115, 116, 118, 119, 126, 127, 138, 142, 159, 166, 167, 169, 170 intervention, iv, 8, 9, 11, 31, 32, 34, 39, 52, 53, 61, 93, 99, 114, 169 Levy, Paul, 77, 78, 115, 116, 140, 143, 169 LIHTC, 36, 45, 102 Low-Income Housing Tax Credit See LIHTC Gleason, Mark, 121 mixed-income neighborhood, 9, 37, 45, 72, 167 Moving to Opportunity, 37, 135, 139, 140 neighborhood choice, 8, 11, 23, 31, 40, 41, 45, 46, 125 'Neighborhood Improvement Districts, 43, 167 neighborhoods, iv, 1, 5, 8, 11, 15, 21, 22, 23, 26, 27, 29, 30, 32, 33, 34, 35, 36, 38, 40, 41, 43, 46, 48, 53, 58, 59, 72, 74, 75, 85, 88, 91, 109, 123, 124, 125, 126, 128, 164, 165, 167, 168, 169 New Orleans, 1, 19, 137, 139, 144, 145 170 New York See New York City New York City, 4, 18, 39, 128, 134 Oates, Wallace, 110, 134, 142 Olesh, Ivy, 78, 79, 116, 117, 118, 142, 170 peer effects, 3, 13, 14, 17, 18, 21, 27, 121, 159 Penn Alexander School, viii, 34, 49, 51, 52, 67, 78, 92, 106, 109, 113, 123, 133, 166 Philadelphia, iv, viii, 1, 4, 5, 6, 7, 8, 9, 11, 14, 15, 16, 18, 19, 20, 22, 27, 28, 29, 30, 41, 46, 48, 49, 50, 51, 52, 55, 56, 57, 58, 64, 67, 70, 75, 77, 78, 79, 80, 81, 84, 90, 99, 106, 108, 109, 113, 115, 117, 118, 119, 121, 122, 123, 127, 135, 136, 137, 138, 139, 141, 142, 143, 144, 146, 147, 149, 152, 153, 158, 164, 165, 166, 169 Philadelphia School District, 5, 8, 20, 30, 90, 99, 122, 158 placed-based, 9, 13, 34, 38, 39, 40, 41, 78, 111, 114, 117, 126, 127, 164 poverty, 1, 4, 7, 8, 27, 31, 35, 37, 40, 75, 121, 125, 168 property tax, 7, 24, 55, 72, 77, 108, 119, 124, 125 public good, 7, 25, 31, 43, 123 public housing, 35 public services, 24, 28, 34, 36, 41, 42, 45, 46, 72, 125, 126, 167 Qualified Census Tracts, 36, 75, 101 raster GIS, viii, 71, 101, 102, 104 research questions, school choice, 8, 11, 14, 19, 21, 22, 23 School Improvement District, 9, 45, 46, 55, 69, 70, 71, 76, 107, 114 school quality See education school-aged children, 25, 44, 76, 118 site suitability, viii, 70, 71, 72, 101, 102, 105, 106 Special Service Districts, 41 suburban, 4, 6, 25, 28, 29, 30, 31, 38, 40, 128 Tax-increment financing, 126 Tiebout, 24, 134, 136, 142, 146 University of Pennsylvania, i, 48, 78, 99, 108, 109, 111, 138, 145, 147 Urban Renewal, 48 value-added, 13, 14, 15, 18, 21, 22, 117, 121 vouchers, 13, 36 weighted overlay, viii, 71, 101 willingness to pay, iv, 9, 21, 45, 55, 56, 57, 69, 80, 81, 90, 91, 92, 124, 165 171 .. .Toward School Improvement Districts: School Quality & the Equitable Revitalization of Neighborhoods Abstract High housing costs and variation in the willingness to pay for school quality. .. relevant to the School Improvement District framework Chapter presents the results of the school quality econometric study Chapter simulates the School Improvement District planning process and then... TOWARD SCHOOL IMPROVEMENT DISTRICTS: SCHOOL QUALITY & THE EQUITABLE REVITALIZATION OF NEIGHBORHOODS Kenneth Steif A DISSERTATION in City & Regional Planning Presented to the Faculties of the University