Does School Choice Accelerate Gentrification?

Readers asked for a response to this internet discussion on gentrification, here are our thoughts:

I remember a time when “fat” was a nasty word in the food world, and now the avocado, considered a “healthy” fat, is all the rage. Sure, there are “bad fats,” but the nutrition world had to clean up the rhetoric around the word “fat” for a long time.

Gentrification is a similarly stigmatized word with a hazy definition. Using the term “gentrification” is a lot like using the term “fat” - it’s too broad to know if it’s an avocado or french fries. While neighborhood changes can have negative effects, some using the term “gentrification” are actually describing economic development or “healthy” gentrification.

Recently, “gentrification” circulated the education blogosphere connected to school choice. Chalkbeat and the Atlantic published an article with the fear-inducing title, “School Choice May Be Accelerating Gentrification.” And in doing so, they deemed school choice the “trans fat” of neighborhoods. The article, first published at Chalkbeat, cites two different research studies: one study by Francis Pearman and Walker Swain looking at national data and another study by three authors looking at school assignment zones in Charlotte, NC.

Today, I will break down both studies. I’ll include descriptions of their conclusions and share some missing context for each study. Finally, I’ll talk briefly about this controversial term, gentrification. Maybe I’ll even convince you school choice is much closer to being an avocado.

National Study: Concentrated Poverty vs. Economic Growth

When looking at neighborhoods on a national level, Francis Pearman found that, when school choice is available, the proportion of white, college-educated households in high-poverty neighborhoods of color was more likely to increase. Chalkbeat quotes Pearman only briefly, but Pearman states,“There can be a restructuring of urban poverty, to the extent that schools become less connected to the neighborhood.”

There can be… as in there is opportunity for curing concentrated urban poverty as it is now. Though Pearman’s personal views on school choice and neighborhoods are neutral here, the context of his other research alongside this work tells a different story.

In Pearman’s work,"The Effects of Neighborhood Poverty on Math Achievement," he writes about the two trends shaping children's prospects long term in the US: "a growing STEM-based economy and rising income segregation... Exposure to high-poverty neighborhoods exerts a depressive effect on children’s mathematics achievement growth beyond that associated with individual-, family-, and school-level characteristics” (Abstract). Let me defog this statement: living in a bad neighborhood lowers math scores even beyond what we should expect given the bad schools in those neighborhoods.

WOAH. If you discovered devastating outcomes for children in high-poverty neighborhoods, wouldn’t you continue researching ways to change poor neighborhoods and increase financial diversity? Perhaps, you might even study ways to bring economic development and more highly educated people to poor neighborhoods. It seems clear that Dr. Pearman’s desire to fix the blight of concentrated poverty motivated his research, and he found something that was impacting neighborhoods - school choice!

Charlotte, NC study: Higher Property Value vs. Lower Crime Rates

The next study found that when families living in failing school districts were allowed to attend other schools, those neighborhoods became more sought after. The researchers in this study were less neutral, labeling those who moved to school choice areas as “those who exploit” a  policy.

The outcomes that are not mentioned here are the changes in crime that accompanied the neighborhood’s change in popularity. Harvard economist David Deming compared the difference between students involved in Charlotte's school choice plan and those who were not allowed to participate by comparing number of crimes committed and incarceration rates. His findings were striking. Across several different outcome measures, high-risk youth committed about 50% less crime. You read that correctly - 50% less crime! So, yes, housing prices rose, but the condition of the neighborhood changed too. And minority youth, who might have ended up in jail, lived better, crime-free lives.

Moreover, according to the study cited by Chalkbeat (though conveniently left out of the Chalkbeat piece), the authors find that “current residents do not appear to be crowded out of these neighborhoods due to rising home values, [this finding] suggests that the original residents of the neighborhood value the amenity effects of gentrification more than the increase in housing values” (30). Or, in other words, the displacement of poor people was not an outcome of this study.

Here is an irrefutable fact about neighborhoods: Struggling schools and crime lower both home prices and rents. But nobody thinks we should leave poor neighborhoods with bad schools and more crime to keep their rent cheap. It is not logical to oppose a policy that improves crime and education because there might be middle-class people who try to take advantage of it. If a policy can restructure poverty and change lives of those affected by it, it’s worth a few middle-class people benefitting. But that is essentially the most recent argument of the anti-choice crowd: if we want to keep rent low, then we must keep opportunities for safety and quality education out of poor neighborhoods.

Your Neighborhood Matters:

You might have noticed that I’ve left out the word gentrification almost entirely in this discussion. In part, I did so because even the two groups of researchers whose papers I have discussed don’t even agree on a definition. As a business professor, this conversation is solely about job creation and economic development. Yes, I acknowledge that too much success or too much economic growth can have negative effects for the poor. It’s true. With transformational economic growth in a community, negative effects, such as displacement, can happen. Still, I would not advocate keeping school quality low to control housing costs; The Department of Housing and Economic Development (HUD) has more appropriate tools for creating affordable housing.

The bottom line here is there are more households suffering due to the effects of concentrated poverty than there are households being hurt by displacement. Let’s set the record straight. The headlines at Chalkbeat and the Atlantic should read, “School Choice Accelerates Economic Development in Neighborhoods Across America.”

So, you may call it gentrification, but take a minute to consider whether economic growth that benefits the poor isn’t a good thing overall. Then, slice an avocado for your salad tonight, and remember, it’s the good fat.