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Million Dollar Homes and Overcrowded Schools?

Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. ()

March 21st, 2007 · 1 Comment

Wendy Kandasamy, agent with Alain Pinel RealtorsToday’s guest post is from friend and colleague Wendy Kandasamy, who is not only a top-flight agent, but also a mother with kids in Palo Alto schools — and a very involved mother at that. She’s been doing a lot of thinking about how property prices in Palo Alto may be affected by the overcrowding in local schools.

Take it away, Wendy!


Palo Alto is the highest priced city on a per square foot basis in the mid-Peninsula. The two nationally ranked high schools — Gunn and Palo Alto High, are major contributors to these high prices.

The Association of Bay Area Governments (ABAG) predicts that Palo Alto will have 80,000 residents by 2030. Compared to the ~60,000 residents today, that’s roughly a 30% increase in 13 years! Where are all of these people going to live? In 2000, the there were on average 2.3 people per household, and, again on average, 280 new housing units have been added per year over the last 7 years. If the housing stock continues to increase at the same rate, and the number of people per household stays constant, the town will be short of housing for over 11,000 people!

Aside from the question of where the land is on which to build new units, what about the quality of life for Palo Altans? What is the projection for school enrollment in the already over-crowded Palo Alto Schools (PAUSD)? Professionally speaking, I welcome the increase in inventory, since that will mean there’s more to sell!

Overcrowding in schools is a phenomenon affecting certain school districts, primarily districts with high performing schools and high API test scores. Will property values be affected by school overcrowding? To some extent, I believe it will. Not being able to attend a neighborhood school is a factor for some buyers. The most important factor will be the student’s access to programs and classes. When the students cannot get into an AP class due to a lack of classrooms or teachers, people will stop buying in Palo Alto. As long as the schools can accommodate the students in a way that does not impede their progression, parents can overlook the portable classrooms and rationalize that Palo Alto is still the best place to live. Since most buyers for Palo Alto homes are families with school-age children, especially those entering high school, the schools will be bursting at theirs seams before the city will feel the squeeze. Property values are decided by the market place.

For all Palo Alto homeowners, keep an eye on your investment by being aware of the issues affecting your property values.

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Tags: Consumer · Palo Alto · Real estate · Schools

1 response so far ↓

  • 1 Athol Kay // Mar 29, 2007 at 3:42 pm

    Good schools are vital to good property values. Even if you don’t have kids yourself, crappy schools will result in lower overall demand for property in your area. i.e. lower prices.

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