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Concentrated Housing Wealth and Schools

February 27, 2014

The Washington Post reported on a recent study conducted by Demand Institute, a nonprofit group run by the Conference Board and Nielsen, which analyzed prices of owner-occupied homes in 2,200 of the largest cities and towns. The study found that 10 percent of communities held 52 percent of total housing wealth — about $4.4 trillion and the bottom 40 percent held 8 percent of the wealth, or $700 billion. The Post went on to note that:

The disparity has remained constant for years, with little movement in and out of the top and bottom rungs, the report says. Also, although home values rose across the board from 2000 to 2012, the gains totaled nearly $2 trillion for the top 10 percent but $260 billion for the bottom 40 percent.

The authors concluded that the national recovery in home values since then “masks wide local discrepancies, with some markets soaring ahead of others,” a theme that’s been sounded more than once this week with the release of various home value measures that also show wide variations among localities.

Given that schools are funded with property tax, and given that standardized test scores correlate highly with income, is it any surprise that test “value measures” show wide and persistent disparities?

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