Municipal Land Use and the Financial Viability of Schools
Local schools are primarily funded through local property tax revenues, which are tied to property values and the distribution of value ranges within a community. Values, in turn, depend on the mix of lot sizes and building attributes (improvement characteristics), which are affected by zoning. Since lot size restrictions limit the size characteristics of homes (bedrooms, garages, building square footage, etc), it should constrain the number of school age kids emanating from a given homestead and that a school district services. Each home, depending on lot size, should exhibit differential impacts on school district revenues. Similarly, if lot size and the magnitude of other housing characteristics impact on the number of kids emanating from a home, then each home would generate differential costs on the school district. This paper argues that the number of school age kids from a given home is endogenous to lot size. It therefore posits that an optimal lot size exists within a community that would maximize school district revenues, minimize school district costs or optimize the combination of both. A theoretical framework is developed to guide the specification of net revenue functions for school districts. By applying data from a school district in Michigan, net revenue functions are estimated as functions of lot size and other exogenous factors. The result suggests that net revenue is only feasibly optimal at lot sizes below approximately 0.18 acres. One implication is that school districts, which typically do not engage themselves in the process of local land use decision making, might consider the promotion of density and compact development as being in their best interest.
|Date of creation:||2008|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mingche M. Li & H. James Brown, 1980. "Micro-Neighborhood Externalities and Hedonic Housing Prices," Land Economics, University of Wisconsin Press, vol. 56(2), pages 125-141.
- David E. Mills, 1989. "Is Zoning a Negative-Sum Game?," Land Economics, University of Wisconsin Press, vol. 65(1), pages 1-12.
- Fischel, William A, 1992. "Property Taxation and the Tiebout Model: Evidence for the Benefit View from Zoning and Voting," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 171-177, March.
- Takatoshi Tabuchi, 1996. "Quantity Premia in Real Property Markets," Land Economics, University of Wisconsin Press, vol. 72(2), pages 206-217.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea08:6412. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.