School quality is the most important cause of the variation in constant-quality house prices (Haurin & Brasington 1996), and research shows parents seek out housing in the best school zone they can afford (Briggs 2005; Fischel 2000; Tiebout 1956). These factors, coupled with Rye’s top ranked school district, creates strong demand for family-size homes and residential expansion. The balance of Rye housing stock is changing to meet this demand (emphasis on RCSD heavy-user family-purposed homes). However this change in housing stock is also driving up assessments which is likely increasing turnover and out-migration of RCSD non-users leading to the spiral illustrated below.
While it’s true there are economic benefits to residential expansion, there is also a cost to RCSD. In fact, each square foot of new residential expansion may be costing the RCSD $300 or more.
The flyers below (click to enlarge) were circulated in direct mail and print campaigns in 2011.
Important economic incentives and disincentives for residential expansion are as follows:
- construction/development returns: $102/square foot
- net present value of recurring sales commissions: $113/square foot*
- net present value of recurring property tax revenue: $32/square foot**
- cost to RCSD: -$313/square foot***
(source: Zillow.com; The National Association of Home Builders)
* $510/s.f. sale price; $30.60/s.f. NPV of three sales fifteen years apart; 6% commission; 2% inflation
** $1.84/s.f. NPV over thirty years; 2% inflation
*** 672 s.f. per expansion; 0.75 students per expansion; $22k per student annually; $6.31 school taxes per s.f.; NPV over thirty years; 2% inflation
**** ~79 residential expansions per year, average 0.75 RCSD child per expansion.