Factoring in schools

When Jennifer and Marcus Errico purchased their home last year in Pasadena for just under $450,000, they had two things on their minds: affordability and steering clear of Los Angeles Unified School District.

It was much the same story for Giselle and Craig Arteaga-Johnson, who in April bought a $326,000 Pasadena house. Both couples hope to start families in the next year or two, and concerns about where their kids might someday be learning the alphabet and social skills figured prominently in their decisions on where to buy.

“Education and school systems were at the top of our list,” said Marcus Errico, news director for E! Online. “One reason we didn’t look in Eagle Rock is we were terrified of our kids going to LAUSD schools.”

In Los Angeles County’s overheated housing market, where just about anything not straddling a fault line has soared in value, real estate experts say that, all things being equal, quality schools accelerate home sales and appreciation. And although precise dollar amounts are difficult to gauge, brokers have been successfully selling test scores and superior schools for years in communities such as Burbank, Glendale and Calabasas. Now a fleet of new and improved schools may give a similar boost to LAUSD neighborhoods.

Quality schools are considered a cornerstone of healthy neighborhoods, according to G.U. Krueger, vice president for market research at IHP Capital Partners, an Irvine-based real estate venture capital firm.

“The most important variable for people when they are looking for housing is the perception of the schools,” Krueger said. “It doesn’t matter if the housing stock is new or old, people see schools as a reflection of communities.”

Conversely, a widespread aversion to LAUSD -- borne of low test scores, managerial fiascoes such as the long-delayed $200-million Belmont Learning Complex and facilities in disrepair -- hasn’t helped market homes in parts of that district.

Long hammered by local politicians, the district has alienated two generations of parents as a result of substandard performance and inefficiency. But test scores have been inching up in recent years, and the fractiousness that once characterized the school board has somewhat abated.

An unprecedented school building boom is underway that will deliver state-of-the-art campuses in neighborhoods from Panorama City to Pico Union and Sun Valley to El Sereno. The push has already resulted in new schools opening in Silver Lake, Van Nuys and Los Angeles, to name a few.

Tapping roughly $9 billion from state and local bonds passed between 1997 and March, the district has set out to build 160 new schools and add 162,000 new student seats by 2012, while at the same time improving dozens of other campuses districtwide.

Phase 1, funded by the passage of Measure BB seven years ago, is plowing forward with a goal of 80 new schools by 2007 to relieve overcrowding and cut down on year-round schedules in the district’s most densely populated areas. So far, 23 projects have been completed and nearly 100 others have broken ground.

Highlights of the first phase include an $87-million arts high school next to Walt Disney Concert Hall and the $111-million Vista Hermosa High School, also downtown, which will accommodate 2,600 students in four distinct campus communities and include an adjacent park. The arts campus is scheduled to open in 2006; Vista Hermosa in 2007.

Overall, the district’s task represents a public works project more on the scale of a small nation than a school district, and some question whether LAUSD has the wherewithal to pull it off. And even if the building goes well, there is no guarantee that the new schools will do any better than existing ones at churning out accomplished students.

On the other hand, the lure of shiny new campuses, with new textbooks, air-conditioning, clean bathrooms and perhaps even reinvigorated teachers is sure to play a role in the ever-shifting dynamics of neighborhood desirability in Los Angeles.

“LAUSD didn’t necessarily have a distinguished history of success in the facilities construction area,” said Jim McConnell, chief facilities executive for the district, and a former Navy captain with the Seabees. “But the culture is changing.”

For Phase 1, the district has used the power of eminent domain to force owners of about 300 pieces of commercial real estate and 227 single-family homes to sell, according to McConnell. The district needed to acquire about 800 parcels of land, roughly 440 acres, for that phase alone.

Although the use of eminent domain acquisitions has drawn criticism from some, the district hopes benefits to remaining residents will outweigh the negatives.

“Most of the neighborhoods we’re building in desperately want us to build new schools,” McConnell said. “And it’s amazing to see how quickly they become centers of the community.”

One reason is that resources have also been put toward athletic facilities, grass fields and play equipment. Outside of school hours, the district will maintain an open-door policy for the 240 acres of recreational space that will come with the new schools. Such spaces can be a big draw in parks-starved Los Angeles County.

Clearly, the district views its construction boom in the context of neighborhood building. School Board President Jose Huizar points out that the new schools are the first to be built in 30 years, even as the district’s population swelled by 50% to its present total of about 750,000 students.

“Today, most of our schools are over 60 years old. Overcrowding has meant more busing, more bungalows and more year-round school schedules,” Huizar said. “These [new] schools are a community resource that are an important piece of a larger puzzle.”

Will district perceptions change as new and renewed school facilities come on line?

Already, some areas of the district are forging reputations for strong academics and quality schools.

That’s been a boon for property owners in areas of the city such as Mt. Washington and the Wonderland Avenue Elementary School neighborhood in the Hollywood Hills, to name two, where top-notch instruction and active parent involvement have clearly had an effect on neighborhood desirability.

“Mt. Washington is crazy. You’ll see bidding wars on houses that are 700 square feet,” said Michael Raske, an agent with the Los Feliz branch of DBL Realtors who represented the Arteaga-Johnsons in their search.

“I know a lot of people who will consider spending $150,000 more than they want to because if they have two kids they figure they won’t have to put them into private school.”

Among schools set to open by the end of 2005, those in the Mid-Wilshire and Koreatown neighborhoods are expected to have a positive influence on property values in those areas, according to Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

“New schools can do much to bring back those neighborhoods,” he said. “There are a lot of areas in the urban core that have character and proximity to amenities, but they’ve slid. And that starts with the schools going downhill.”

But amid the optimism, there are doubters.

Although real estate appraiser Don Glaza agrees that superior schools can lift property values, he questions whether new schools will automatically make a difference. The key for parents, he said, is consistently high test scores, not new facilities.

And there are other considerations as well.

“If you live two blocks away from a new school, that’s great,” he said. “But the houses right next to a new school can actually lose value because that’s where the traffic is.”

Krueger also strikes a cautious note. “New schools,” he said, “can’t be a substitute for improved instruction and better scores.”

Errico said he and his wife scoured the Internet for test scores and spoke to people in the neighborhood about area schools before making their decision to buy in Pasadena. Still, they are hoping the local schools improve a bit in the next few years.

“I would love to send my kids to public schools,” Errico said. “And not just for economic reasons.”

And would he consider buying a house in Los Angeles? Perhaps.

“All this money being poured into building new schools gives me hope for the future,” he said.

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Darrell Satzman is a freelance writer based in Los Angeles. He can be reached at satzman@earthlink.net.