School desegregation orders reduced the value of urban houses relative to houses in neighboring suburbs by almost 6 percent.
In School Desegregation and Urban Change: Evidence from City Boundaries (NBER Working Paper No. 16434), Leah Platt Boustan analyzes changes in housing prices in neighborhoods on either side of the borders of city school districts that were subject to court-ordered school desegregation in the 1970s. She finds that school desegregation orders reduced the value of urban houses relative to houses in neighboring suburbs by almost 6 percent. She also finds that hostility to school desegregation reflected both an aversion to busing and concerns about classroom quality.
At the beginning of the 1970s, around 12 percent of the students at the average white child’s school in city districts were black, regardless of subsequent desegregation history. At the end of the decade, the share of black students at the average white student's school had increased by 20 points in cities that were under court-ordered desegregation and by 5.5 points in cities that were not under court order.
On average, the neighborhoods studied were 5.5 percent black with owner-occupied housing that had an average value of slightly more than $100,000 in 2000 dollars. In cities subject to court-ordered desegregation, the value of owner-occupied housing declined by 6.5 percent between 1970 and 1980 relative to values in suburban neighborhoods. In cities not under court order, it declined by only 0.7 percent. The imposition of a desegregation order did not affect either the racial composition or the age distribution of the neighborhoods studied. That finding is consistent with previous work showing that urban residents were more likely to respond to mandated school desegregation by shifting to private schools than by leaving a central city.
The data for this study come from Census blocks on either side of 81 city-suburban school district boundaries in northern and western metropolitan areas in 1970 and 1980. In forty of those cases, neither side of the city-suburban boundary was required to desegregate. In 29 cases, the boundaries divide an urban school district placed under a 1970s desegregation order from a suburban district that was not desegregated. In seven cases, both sides of the borders fell under court order to desegregate during the 1970s. In five cases, both sides of the boundaries had been subject to court-ordered desegregation in the 1960s.
-- Linda Gorman