Perspective: Can improvement districts help save Chicago schools?

Struggling public schools in some Chicago neighborhoods only provide further incentive for middle-class families to choose suburban enclaves. But the story of urban planning that began with Daniel Burnham's 1909 Plan of Chicago is a tale of experimentation — each chapter a portrayal of how a certain intervention might improve the vitality of neighborhoods and downtowns. More than a century later comes the promise of a new kind of intervention.

I recently completed research in Philadelphia quantifying the real estate effects of a university-funded, public school improvement program. The results were staggering. On average, buyers were willing to spend an additional $140,000 to buy a home inside a school improvement zone, with the benefits as measured in housing values outweighing the costs of school improvements by a factor of 3 to 1. The Philadelphia experience did, though, lead to the displacement of some residents.

Could Chicago replicate this program without the help of a major institution and without residential displacement? The answer might lie with Chicago's more than 40 special service areas (what other cities call business improvement districts). Many Chicagoans have never heard of these so-called SSAs, small creations of City Hall that allow a designated district's businesses and residents to raise their own taxes and put the incremental increase toward improved public safety, business retention and beautification services.

Although safety and streetscaping are important determinants of real estate demand, they pale in comparison to high-quality neighborhood public schools.

Alongside an alderman, residents could form a special service area or a "school improvement district" managed by a sponsor agency — typically a neighborhood chamber of commerce or development council. With City Council approval, this entity essentially would collect and expend new property tax revenues for neighborhood school improvement, using the funds to lure higher quality teachers, increase program resources or otherwise raise the quality of public schools within the district.

Chicago has a long history of gentrifying disadvantaged neighborhoods and displacing the existing population. For this sort of modern-day revitalization program to be politically feasible, the tide must lift all boats. School improvement district boundaries should straddle high- and low-valued neighborhoods. This would ensure that affordable housing isn't lost as the ensuing school improvement is gradually capitalized into each district's real estate values. Furthermore, drawing boundaries that encompass a variety of incomes assures that the tax increase will be progressive (the tax is a function of property value) and that a diverse group of students attend each school.

Locating a school improvement district would require a rigorous planning study using quantitative education, real estate and affordable housing-related metrics to rank existing school attendance boundaries by their relative feasibility. Ideally, the boundaries for the special service area would conform to an existing school attendance boundary.

Renters are generally hit the hardest by gentrification. To counteract these effects, the school districts should be located in areas served by community nonprofits with records of competing successfully for affordable rental housing tax credits. That, too, would protect demographic and economic diversity as property values rise.

There's a clear connection between good schools and demand for housing, but it goes both ways. Chicago, like Philly and other cities around the country, has been forced to close schools and lay off teachers. If middle-class parents cannot educate their children in urban public schools, they will leave and with them will go all the positive momentum that the cities have gained in the last two decades.

Human capital is the single most important ingredient for creating strong cities. School improvement districts may be a new model for growing Chicago's human capital while simultaneously improving its neighborhoods.

Ken Steif is a doctoral candidate in the Department of City and Regional Planning at the University of Pennsylvania.