Does Municipally Subsidized Housing Improve School Quality? Evidence from New York City

Problem: Policymakers and community development practitioners view increasing subsidized owner-occupied housing as a mechanism to improve urban neighborhoods, but little research studies the impact of such investments on community amenities.

Purpose: We examine the impact of subsidized owner-occupied housing on the quality of local schools and compare them to the impacts of city investments in rental units.

Methods: Using data from the New York City Department of Education (DOE) and the New York City Department of Housing Preservation and Development (HPD), we estimate three main sets of regressions, exploring student characteristics, school resources, and school outcomes.

Results and conclusions: The completion of subsidized owner-occupied housing is associated with a decrease in schools’ percentage of free-lunch eligible students, an increase in schools’ percentage of White students, and, controlling for these compositional changes, an increase in scores on standardized reading and math exams. By contrast, our results suggest that investments in rental housing have little, if any, effect.

Takeaway for practice: Policies promoting the construction of subsidized owner-occupied housing have solidified in local governments around the country. Our research provides reassurance to policymakers and planners who are concerned about the spillover effects of subsidized, citywide investments beyond the households being directly served. It suggests that benefits from investments in owner occupancy may extend beyond the individual level, with an increase in subsidized owner-occupancy bringing about improvements in neighborhood school quality.