Public Comment

Commentary: Measure A Will Impact Property Values

By Margot Pepper
Tuesday October 10, 2006

If Berkeley’s Measure A, the parcel tax, goes down, it is likely that so will property values. “It’s clear that if school quality is reduced, housing values decrease. It’s a direct correlation. One of the reasons the city of Berkeley has such high values relative to Oakland is because of the perceived quality and reputation of the schools,” observes Teresa Clarke, senior project manager for Affordable Housing Associates. “It’s very interesting to note that in the late ’70s, before any of the parcel tax measures were passed, Berkeley schools had a terrible reputation.” 

For the last two decades Berkeley homeowners have chosen to pay a couple hundred bucks or so more in taxes each year in exchange for better schools. What they may have overlooked is that the small fee of maintaining top-notch schools is also a big factor in keeping their communities safer and their property values among the highest in the nation. For home owners, the return on their investment is astonishingly high since school quality is one of the strongest influences in persuading new home buyers to purchase, driving up market prices. 

A public opinion poll conducted by the California Public Education Partnership in 2000 indicates that residents rank improvements in public education higher than environmental quality and crime reduction. 

Citing the study in Growth and Change, Economist Dr. David E. Clark and William E. Herrin assert that “After controlling for a wide range of housing characteristics and neighborhood features, the findings of the study indicated that the school district does significantly influence the real sale price” of real estate—with average class size by far the strongest influence. “There is some evidence to suggest that the benefits of additional teachers likely outweigh the costs.” Berkeley citizens couldn’t agree more. In response to the shortages caused by Proposition 13, beginning in 1986 voters repeatedly approved what have become two primary sources of funding to the Berkeley Unified School District (BUSD), both of which will sunset at the end of the 2006-2007 school year. Measure A on the November ballot renews the sources. Together, the $19 million a year parcel taxes have maintained Berkeley’s reputation for small class sizes under the state average; teacher training; parent outreach; special services like speech, group therapy, counseling, and a myriad of enrichment programs echoing those in private schools. Such programs include computer labs, science, poetry, drama, pottery and other art classes, writing support, capoeira, P.E., sports classes and after-school tutoring. The two previous measures combined have been providing more funds to the Berkeley school district than does the federal government. BUSD Superintendent Michele Lawrence notes, “If Measure A doesn’t pass, it will lead to Berkeley schools’ swift demise and bankruptcy. More than a third of our teachers will be laid off. The schools will lose their music and fine arts programs and the libraries will close. The district won’t help but resemble neighboring bankrupt districts like Richmond and Oakland. The state underfunds public education. Fortunately, Berkeley citizens have been giving public education a strong voice through their support with local taxes.” And, according to real estate figures, the investment of Berkeley homeowners is paying off. “In general, the perceived quality of the local schools definitely affects prop values,” says Broker Betsy Thagard with Green Planet properties. Thagard points out that because Oakland has neighborhood schools, homes corresponding to Crocker Highland elementary school are more valuable than other Oakland houses due to the school’s reputation. 

Property values for similar houses just blocks from one another, separated only by the Oakland-Berkeley border, demonstrate this phenomenon quite vividly. A random comparison of a dozen comparable houses along the Berkeley border with Rockridge in Oakland sold over the last two years found that on average for that period, Berkeley homes sold for $77,000 more than Oakland homes. A more reliable measure is dollars per square foot. Looking at this measure, a two-bedroom Berkeley house next to an Oakland home is worth $86 more per square foot. This means that an average two-bedroom, 1,300-square-foot home in Berkeley is worth $112,375 more than its Oakland neighbor, even when all other variables remain constant. If one averages in all the homes that were larger than two-bedrooms and one bath sold since 2005 in that area, the difference in dollars per square foot of Berkeley homes nearly doubles to $161 a square foot more than Oakland homes. 

That’s quite a generous return for a tax which will cost only about 23 cents per square foot for private properties. Measure A would also levy a tax on commercial properties at 34 cents per square foot, together yielding a total of $19.5 million. 

Of the houses surveyed, most were just blocks within each other on the same street such as Colby or Hillegass. Some were actually on the same block. All homes had the same general accessibility to the same BART station, Rockridge shops, restaurants and groceries. The appearance, landscaping and ethnic makeup of their blocks were also very similar. The principal variable in the comparison was the school district. The houses in the survey were sold or compiled by Red Oak Realty, Coldwell Banker and Herman Sun and Marvin Gardens Real Estate. This year, 6015 Colby St., a five-bedroom Craftsman built in 1911 in Oakland, was offered at $749,000. A less desirable house with one less bedroom at 5829 Colby St. was offered at $1,020,000—over a quarter of a million dollars more. Again, the most outstanding distinguishing characteristic: Berkeley public schools. 

There is concern among Berkeley school parents and teachers that homes in Berkeley are so costly now, new residents might be too wealthy to care about the cost of maintaining public schools and too self-interested to approve a parcel tax. The 10-year measure needs a two-thirds majority vote to pass. 

But 23 cents a square foot is a modest premium to insure the health of Berkeley schools and of the community, preserving the very assets that make a Berkeley home so prized. Judging by the figures, it’s in the financial self-interest of all homeowners, parents or not, to support a school parcel tax. And, perhaps more importantly, less fortunate students, whose parents can’t afford homes, also come out winners. 


Margot Pepper is a journalist and author whose work has been published internationally by the Utne Reader, the San Francisco Bay Guardian, City Lights, Hampton Brown and others. Her memoir, Through the Wall, was a top nomination for the 2006 American Book Award.