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Can the success of Penn Alexander be replicated?

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by Ken Steif

In deciding to close 23 Philadelphia schools, the District cited as one of its rationales an unprecedented number of empty seats. In one part of West Philadelphia, however, the opposite is true: Demand for entrance into the Penn Alexander School has exceeded the supply. Penn Alexander has consistently been one of the city's top-performing elementary schools. Attendance was once guaranteed to any student residing in the school's catchment boundary, but Penn Alexander has proven so popular that residing in the catchment zone no longer ensures you a seat in the classroom, just entry into a lottery.  

Founded in 2001 as part of the University of Pennsylvania's West Philadelphia Initiatives program -- an urban revitalization project focusing on public safety, economic development, and partnering in the development of a new neighborhood school -- Penn Alexander is now one of the most coveted elementary schools in the city. In the last decade, as school-minded parents streamed into the neighborhood, housing prices skyrocketed. By many standards, Penn's influence and partnership with the school, which includes a substantial per-pupil contribution, have led to a rejuvenation of the neighborhood – although it came at a cost to many lower-income residents who were subsequently priced out of the area. Given the program's success, what lessons can be learned, and could it be replicated in other neighborhoods? I recently completed some research in which I isolated, using a statistical model, the house price premium of the school from other neighborhood amenities. In 2000, a year before the school opened, there was no significant price difference between houses in the catchment and comparable properties directly adjacent but outside the catchment. By 2011, estimates showed that a home in the area was worth one-third more than a comparable one in the surrounding neighborhood -- a premium totaling $140,000. Roughly, for every $1 Penn invested in the school, the private real estate market reaped $3. Clearly, home-buyers value the university's involvement. But what of the existing homeowners and residents? As the number of shops and restaurants increased and the number of crimes decreased, the demographic character of the neighborhood changed dramatically. Census data show that between 2000 and 2010, while the catchment's population increased by 14 percent, the number of African Americans declined by 43 percent. The White population, it turns out, increased by 48 percent.  Given the need for high-quality schools in the city and the School District's funding shortfalls, would it be possible to replicate the Penn Alexander model in other communities, and do so without a financier as well-endowed as Penn? Could it be done more equitably to limit displacement out of the community?

So-called "Neighborhood Improvement Districts" may provide the basis of a solution. Recently, City Councilman Darrell Clarke proposed creating one in the area around Temple University. By raising taxes on local landlords from 7 percent to 10 percent, the resulting $450,000 in tax revenue would be used to fund improvements like street cleaning and increased public-safety measures. These interventions would increase the demand for the neighborhood, which would in turn raise property values and tax revenues.  I suggest adapting the Improvement District model not to fund special services but to directly benefit neighborhood schools. A "School Improvement District" could funnel the added tax revenue to a neighborhood school to fund building improvements and more student resources, which could lead to a more stable teaching force and other markers of successful schools. Although the extent of the improvements would be bound by the School District’s regulations, $450,000 a year is a significant amount of money -- an amount roughly in line with the funding that Penn provides Penn Alexander every year.  If neighborhood residents are willing to vote for a School Improvement District, there are ways in which the program could be made more inclusive and equitable. For one, a new school catchment could be drawn to straddle both low- and middle-income neighborhoods. The Improvement District's tax increase would be related to home values, so the added tax burden would be distributed more fairly. This would give students from various income levels access to these schools and provide, at least initially, a range of rents and home prices available to households wishing to take advantage of the school improvements.  The School Improvement District could also help affordable-housing developers when they submit applications for state tax credits. The tax-credit application process is competitive in nature; using a School Improvement District as leverage could significantly increase the chance that an affordable-housing proposal would be funded by the state. Because the cost of land assembly and construction are so high, new affordable housing is usually located in neighborhoods with poor access to amenities. Building these units in a School Improvement District could provide low-income households with both high-quality housing and amenities found in more upscale neighborhoods. There is unanimous agreement that better schools should be a top priority. What's missing is a realistic funding mechanism. For governments, School Improvement Districts may provide a cost-neutral solution. When coupled with existing tax-credit programs, it may be possible to increase school quality and revitalize neighborhoods while simultaneously ensuring that the educational benefits are accessible to all Philadelphians.

Ken Steif is a doctoral fellow in the city planning department at the University of Pennsylvania.

The opinions expressed are solely those of the author.

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