Edgewood and the Potential for Prosperity

Describing a poor San Antonio neighborhood known as Edgewood, The Wall Street Journal wrote: “Wedged between a freeway and an Air Force base, Edgewood is a neighborhood of tiny houses, rattly cars, derelict lots and gritty businesses like God Bless Dan's Car Wash… By many measures, the Edgewood schools are as woeful as the neighborhood.”

Not only was Edgewood a sad neighborhood, but it was also a place where bad schools drove middle-class families away from the community, only worsening the cycle of poverty there. This was Edgewood’s story until a 10-year experiment resulted in a successful model for increased economic development in neighborhoods like Edgewood.

In 1998, private sponsors announced they would give $52.4 million to provide scholarships to the Edgewood neighborhood. Each scholarship was worth up to $4,700 per year with the hope that children from this low-income area could avoid, or leave, their assigned school for the public or private school of their choice. Families could supplement the scholarship with their own funds to attend schools with tuition levels above the scholarship amount.

Although the area’s poverty limited some users’ ability to supplement the scholarship, many still did put their own funds towards tuition. For example, many scholarship users enrolled in the district’s only major private high school, which charged tuition that was $1,600 above the scholarship amount.

Unlike many other school choice programs introduced in the US, the Edgewood scholarship program had unique criteria. In contrast to other programs in existence, it allowed this family co-payment. Also, the program was initially opened to all residents living in the targeted school district. The scholarship was ‘‘universal option-demand,” meaning families had to request a scholarship that could then be used at any school.

Unfortunately, the Edgewood experiment had a strict budget and a ten-year limit. So, as the program grew in popularity, the sponsors had to tighten eligibility. The program was closed to new students after the sixth year. However, in those first six years when scholarships were universal, housing prices in the community jumped by 9.87% compared to nearby neighborhoods that did not offer the scholarships. Economists consider increases in local housing values an indicator of increased economic activity. Moreover, increased housing values also increase subsequent economic activity as families’ wealth increases.

Here is an interesting side note to the Edgewood experiment. Edgewood’s public school enrollments actually increased when the scholarship program was in place. Reading and math scores went up in the public schools. Families were not deterred by the neighborhood demographics, but were interested and willing to join this economically-depressed neighborhood when their children could attend a school of their own choosing.

In the end, 100% of the families reported that the scholarships had a positive impact on their children’s development. But even more impressive was the impact those 10 years had on the Edgewood community. Property values within the boundaries of the Edgewood school district rose 86.4% over the ten years of the program, and the increase in property values netted Edgewood millions of dollars in additional property tax revenue.

So, considering the success of this privately sponsored model, why would policymakers not consider the impact education has on economic development in our communities? Targeting blighted, low-income neighborhoods like Edgewood with universal choice creates more equal economic conditions across district lines and creates neighborhood diversity that helps our communities thrive and grow. Children growing up in concentrated poverty experience life-long ill effects, but we have an answer for it. Let’s do something about it.