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Boom and Bust

Leapfrogging suburbs make life difficult for public schools

February 22, 2004 | By Mac McClelland
and Keith Schneider
Great Lakes Bulletin News Service

MLUI/Pat Owen
  When housing costs and taxes soar, businesses and young couples with children simply move on to new subdivisions being built at the next Interstate exit.

If there is a modern school building that reflects the aspirations of its community, it is Okemos High School. Constructed in 1994 on farmland near Interstate 96 in Meridian Township, the brick and masonry building houses competitive sports teams who play on first-rate athletic fields, well-equipped labs, a top-flight band and orchestra, and well-prepared students. When it opened, the school was a symbol of excellence; families with children and sufficient means flocked to it.

A decade later, Okemos High still attracts attention. The development of this excellent school helped spur an energetic debate in Meridian Township about how to contain the myriad costs of sprawl. Home prices are driving young families with children to other townships where housing is less expensive. So now the high school faces a new problem.

Last June, 401 seniors graduated from Okemos. But behind the satisfied smiles of parents, teachers, and administrators lurked an urgent question: How long can the large and lavish school continue to operate? When the Class of 2003 returns to its alma mater for its 15-year reunion, the building could well be half-empty; only 224 kindergartners enrolled in the district last fall.

Trouble in Paradise
Even as new schools are built in fast-growing suburbs at extraordinary cost, older schools that could be renovated for far less money are closing in cities and first-ring suburbs.

The problem is that development trends in Michigan’s suburbs, intensified by families seeking brand new schools, produce a boom-and-bust cycle in school enrollments. The cycle makes planning for future enrollment difficult for school boards and investing in new buildings very risky. Unlike past eras, when steadier school enrollments guaranteed that school buildings were longstanding centers of community life, school enrollments in Okemos and other Michigan communities crest and then decline in less than a generation.
Okemos built its new high school because Meridian Township’s population grew 24 percent in just 10 years, to nearly 36,000 residents in 1990. Many new residents were married couples with small children. But growth stalled; by 2010, the township will have about 41,000 residents, just 4 percent more than its 2000 population, according to census figures. Indeed, the student population of Okemos’ school district is already shrinking.

“We had to go through a gut-wrenching experience closing an elementary school this year and our projections indicate that we may not have enough students for the five elementaries we have left,” explained Deb Baughman, president of the Okemos school board.

Tough Choices Everywhere
Michigan and its quickly suburbanizing communities are either not recognizing or are deliberately ignoring the costs of this boom-and-bust cycle. For example, Northville, 75 miles southeast of Okemos and an outer suburb of Detroit, has grown more than 50 percent since 1980 — changing from a quiet, rural area to a spread-out, new suburb that attracted young families. The area’s school-age population grew by 40 percent in a decade, according to the Southeast Michigan Council of Governments.
But projections indicate that the feverish pace will soon slow to just 10 percent per decade. The demographics are already shifting: In 1990, 32 percent of households in Northville Township had school age children. In 2000, 29 percent did.
Because Northville school officials expect the torrent of new students to slow to a trickle, they will face an excruciating decision. The district completed a $42.4 million, 362,000-square-foot high school three years ago and the following year approved a new $28 million bond to expand it and build an elementary school.

“We know our enrollment will stabilize and decline in the next 5 to 10 years,” said David Bolitho, the Northville school system’s assistant superintendent for administrative affairs. “The community is getting built out and not many new families with children are moving in. But our elementary schools are already at capacity. Do we build another school now, knowing that one will have to close in a few years?”

Does This Make Sense?

Rapid suburban population growth often increases home prices and local taxes, forcing many families with children to look elsewhere for more affordable housing.

What’s remarkable about the choices Northville and other school districts are making to build new schools, even if they may soon close, is that the trend is occurring in a time of state budget deficits, fierce debate about reducing taxes, and the desire of voters to compel public institutions to do more with less. When it comes to school construction, those values no longer seem to apply.

On one level, this makes sense: Parents believe nothing is too good for their children. Sweeping school financing policy changes make it easier to pay for new schools. The state has a multi-billion dollar construction fund open to districts that approve construction bond millages. And districts have authority to decide what to build and where.

But Michigan’s school construction boom is producing long-term economic and cultural distortions that threaten to reduce the state’s overall future prosperity.

Even as new schools are built in fast-growing suburbs at extraordinary cost, older schools that could be renovated for far less money are closing in cities and inner-ring suburbs. Approximately 300 such schools have closed in Michigan since 1996, many of them fine candidates for renovation. Of the $16 billion spent on school construction since 1996, just a third has gone to renovation. That’s a shame: For instance, Battle Creek renovated its 238,000-square-foot Central High School for $7.6 million two years ago; a new one would have cost at least $30 million. Meanwhile districts built an estimated 500 new schools even though statewide enrollment is essentially unchanged.

The added costs of building new schools instead of renovating old ones saddles business and homeowners with a 20-to-30-year tax burden that they may still be paying when their shiny, new, family-attracting, community college-like campuses in the woods suddenly face abandonment.

The One-Two Punch
The precise dimensions of those economic costs are not known and are beyond the scope of this report. But, clearly, the trend reduces older cities’ tax revenues while simultaneously pushing new suburbs ever deeper into debt. Such fiscal policies increase our tax burden making Michigan less, not more, competitive.

On one hand, new school construction outside of established cities prompts school closures within them that weaken urban neighborhoods and decrease city tax revenues. For example, an analysis conducted by the Michigan Land Use Institute in cooperation with the City of Jackson found that average home property values within a half-mile of an open, stable elementary school rose at a 3 percent higher annual rate than they did around a similar neighborhood with a closed elementary school. Had that school remained open and home values had similarly increased, the city, county, and schools would have realized almost $2 million more in property taxes from 1994 to 2003.

On the other hand, rapid population growth in distant suburbs often increases home prices and always requires expanded roads, sewer and water services, police, fire protection and ambulance services, courts, and jails. These expanded municipal services require higher taxes and more user fees; typically, the increases are equal to or exceed the millage increases that paid for the new schools: Just a mile of sewer costs between $250,000 and $350,000; a  mile of improved road costs between $250,000 and $500,000. Annually, the actual cost of every police officer is $75,000 to $100,000.

The Disappearing Dream
In other words, the factors that encourage families to move further out — lower housing costs and taxes, low business costs, wide open spaces, uncrowded new schools — gradually disappear. In Okemos homes now cost $350,000 and are increasingly out of reach for most young Michigan families. Less than 6 percent of Okemos-area homes are valued at under $100,000, according to the U.S. Census.
Northville is worse: Today it typically costs $400,000 to buy a house there, according to the Southeast Michigan Council of Governments.

When costs take flight, so do new young residents and entrepreneurs. The next wave of couples planning families and businesses seeking lower costs simply drive down the road to the next Interstate exit. As Okemos High School enrollment declines, for instance, school officials in Williamston, just down Interstate 96, are anticipating an enrollment burst that will probably require school expansions.
But Williamston residents are reluctant to spend for more classrooms. In April, they turned down a bond millage for nearly $30 million to build a new elementary school, buy land for a new football field and possible future high school, and expand the seven-year-old high school.

The dilemmas faced by Okemos, Williamston, and Northville are the same for communities statewide. In southeast Michigan, for example, school districts that experienced significant school-age population growth from 1990 to 2000 — Livonia, Farmington, Southfield, and Troy — will see their enrollments decline in the next five years. This decline will continue for 30 years, according to a report by the Southeast Michigan Council of Governments.
But during that same period other districts further to the north and west of these rapidly maturing Detroit suburbs that were themselves small, rural communities 20 years ago — such as South Lyon and Novi — will see school-age population double or triple over the next 30 years.

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