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Living near good schools will cost an extra $200K

April 19, 2012: 9:15 AM ET
Home values are $205,000 higher, on average, in neighborhoods with high-scoring public schools.

Good schools don't come cheap.

Want to live in a good school district? It'll cost you an extra $200k.

Home values are $205,000 higher, on average, in neighborhoods with high-scoring public schools versus schools with low scores, according to a new report issued by the Brookings Institution.

Homes in high-scoring neighborhoods typically have 1.5 additional rooms, and 30% fewer are rented, the study found. Housing costs average $11,000 more per year in areas with better schools.

Some of the areas with largest differences in housing costs also have the widest gaps in school test scores. The Bridgeport-Stamford-Norwalk metro area in Connecticut, for instance, has both the widest gap in test scores between higher-income and lower-income neighborhood schools and the largest difference in housing costs, at $25,000.

Not surprisingly, income has an impact on test scores. The average low-income student attends a school that scores at the 42nd percentile on state exams, while the average middle/high-income student goes to schools that score at the 61st percentile.

Poor students have become more concentrated in schools with other poor students since 1998, Brookings found. The average low-income student attends a school where 64% of fellow students are low-income, though they represent only 48% of all U.S. public school students. The percentage of economically integrated schools is less than 7%.

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About This Author
Tami Luhby
Tami Luhby
Senior writer, CNNMoney

Tami Luhby is a senior writer at CNNMoney and covers income inequality, state fiscal problems, unemployment, housing policy and other economic issues. Luhby previously covered personal finance for Newsday and banking for Crain's New York Business.

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