House prices rise in school zoning areas, Christchurch study finds

Four Christchurch school zones measured in a recent study show 'substantial' house price premiums, highlighting why school zoning favours the wealthy and is detrimental for education, the Education Forum argues.

Researchers Scott McClay (Deloitte Touche Tohmatsu financial analyst) and Robin Harrison (Department of Economics, University of Canterbury senior lecturer) say in their report that the "magnitude of the zoning premium is remarkable but should not be surprising".

"As economists would expect, the zoning, which is a rationing system aimed at excess demand, encourages a variety of consumer responses some of which are apparent in the market place for 'zoned' houses."

Education Forum policy advisor Norman LaRocque said the study’s findings supported overwhelming evidence that zoning shut many of the most effective schools to the students who needed them most.

"Unless you can afford to buy a house in a ‘popular’ school’s zone, the chances of attending that school are slim - and certainly slimmer than under the more flexible system that existed in the 1990s. Children of low-income families are excluded from attending such schools because they cannot afford to live near them."

Mr LaRocque said zoning supporters often argued that school zoning, by requiring that schools enrol all children from a local community, got rid of biased student selection, thus leading to a student body that reflected the socioeconomic, ethnic and political mix of the wider community. But it was likely to achieve the opposite.

"Contrary to what zoning proponents appear to believe, more rigid school zoning laws do not remove 'selection' from the school system; they simply change the mechanism used to do it. Instead of students being selected by schools, they are selected by whether or not they can afford to buy a house near the school of their choice - 'selection by mortgage'."

The report, 'The Impact of School Zoning on Residential House Prices in Christchurch', says that the allure of guaranteed acceptance of their children at a preferred school is believed to have altered the housing decisions of many parents, with real estate agents reporting an increase in the number of buyers specifically seeking properties within the desired school zone. Advertising of a school zone location is now a common practice among real estate agents.

Using house price data from Quotable New Zealand, the study looked at zones around Riccarton High School, Christchurch Girls' High School, Christchurch Boys' High School and Burnside High School.

The table below from the study shows the extent of out-of-zone enrolments to the four schools.

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'The Impact of School Zoning on Residential House Prices in Christchurch' is online as a PDF document.