March 25, 2014 9:00AM # Cutting the Tie Between Education and Housing By [Jason Bedrick](https://www.cato.org/people/jason-bedrick) --- SHARE We already have a market in education: the real estate market. Controlling for other factors, houses in districts with higher-performing government schools are [more expensive](http://www.dartmouth.edu/~dstaiger/Papers/KaneRieggStaiger%20NBERwp11347.pdf) than those in areas with lower-performing schools. In 2012, the Brookings Institution issued a [report](http://www.brookings.edu/research/papers/2012/04/19-school-inequality-rothwell) finding that in “the 100 largest metropolitan areas, housing costs an average of 2.4 times as much, or nearly $11,000 more per year, near a high-scoring public school than near a low-scoring public school.” The report also found that “the average low-income student attends a school that scores at the 42nd percentile on state exams, while the average middle/high-income student attends a school that scores at the 61st percentile on state exams.” Essentially, access to a quality education depends on one’s parents’ ability to purchase a relatively more expensive house in an area with a good school. That this is a horribly unjust policy for low-income children is obvious and oft-discussed, but what’s often overlooked is that the negative consequences also extend to middle-income families. With quality education tied to housing, middle-income parents who desire the best for their children must seek out housing in areas with better government schools or scrape together money for private school tuition. Unfortunately, as a new Brookings [report](http://www.brookings.edu/~/media/projects/bpea/spring%202014/2014a_kaplan.pdf) reveals, this too-often means purchasing a home that is just barely within a family’s financial means, creating a situation where millions of middle-income families live “hand-to-mouth” with very low levels of liquid savings though they have considerable non-liquid assets. *The Atlantic*’s Matthew O’Brien explains: > This shouldn’t be too much of a mystery. Imagine a couple that’s getting ready to have kids, and wants to buy a house near good schools. Well, that’s expensive. As Elizabeth Warren and Amelia Tyagi pointed out in [*The Two Income Trap*](http://www.amazon.com/The-Two-Income-Trap-Middle-Class-Parents/dp/0465090907), buying a house in a school district you [can’t really afford](http://www.motherjones.com/politics/2004/11/two-income-trap) is one of the biggest causes of bankruptcies. Couples can only afford the mortgage with both their salaries, so they’ll get in trouble if either of them loses their job. > > > But even if everything goes right, they’ll still be cash-poor for a long time. They’ll probably have to use most of their savings on the down payment, and use a big part of their income on the mortgage payments. In other words, the wealthy hand-to-mouth are parents overextending themselves to get their kids into the best schools possible in our de facto private system. As O’Brien notes, a system of school choice would sever the ties between housing and education, which is a policy that could keep “many people from becoming cash-poor and wealthy—a precarious thing—in the first place.” School choice also provides a [passport out of poverty](http://www.nationalreview.com/articles/339457/school-choice-pays-literally-patrick-wolf) for those students whose parents could not afford an expensive house at all. ##### Related Tags [Education](https://www.cato.org/education), [Center for Educational Freedom](https://www.cato.org/center-educational-freedom) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).