On Rezoning and Property Values
Tonight is the latest chance to offer feedback to the Community Education Committee (CEC) on their rezoning plan for Park Slope’s public elementary schools. Previous meetings have seen many legitimate objections raised, but one largely unspoken complaint underlies every discussion: property values.
Those who bought houses or apartments in the highly-sought-after PS 321 school zone (or in public schools 39 and 107) and now find themselves zoned out are panicked at the thought of plummeting real estate values. The Wall Street Journal estimates a difference of $6 to $19 per square foot between 321 and surrounding school zones. That’s $6,000-$19,000 for a 1,000-square-foot apartment and $24,000-$76,000 for a 4,000-square-foot house.
Another analysis finds a greater discrepancy, citing 321 home values as 46% higher than those zoned for PS 39 (though condos with 2-10 units are worth only 13% more). So a $3,000,000 house in 321 would be worth $1,620,000 when zoned for PS 39. That’s a loss of $1.3 million.
Anecdotally, it makes sense that homes zoned for 321 are more valued. Certainly, realtors find ways to mention their properties are zoned for 321, even though it is borderline illegal. A $75,000 drop in value for a home, maybe. But $1.3 million? Something doesn’t add up.
Homes in the North Slope, zoned for the less sought out PS 282, sell for more than those in the Center and South Slope, according to a cursory review of NYT sales activity data. For instance, a single family house at 226 Lincoln Place (in 282) sold on October 5 for $3.7 million. The day before, the same sized house at 778 Carroll Street (321) sold for $3.05 million. A few weeks earlier, an equivalent property at 609 6th Street (39) sold for $2.75 million. Properties in the North Slope, closer to Manhattan and more subway lines and historically subject to earlier waves of gentrification, sell for more than those in the Central Slope. The same is true of Central Slope homes versus South Slope counterparts. It’s a good bet that a thorough review of apartment sales will review a similar trend.
With that in mind, it is probable that proximity to Prospect Park, subways and Manhattan plays a greater role in valuation than school zones do. This is not to say that some people won’t pay more for a living space in 321 than they would for the same space in the new school district, or a 107 home wouldn’t command a greater price than a home in PS 10’s zone. But there are plenty of people buying property who do not have children under five, or whose education plans involve private school, or who are just as happy to have their kids go to one highly rated public school as another.
This is all to say that those objecting to the school rezoning because they fear their property values will decrease should not panic. It isn’t clear how the WSJ arrived at their $6-$19/square foot figure, but it’s probably a lot closer to the truth than 46%. Best guess is that condos and coops are less affected, and fall closer to the $6/square foot figure, while houses end up closer to $19/square foot. But this is conjecture, and only time will tell how property values in Park Slope will be affected.
