Fairer schooling for a better housing environment: Effect of abolishing school zones on the housing market

Abstract

Access to high-quality public education is often closely linked to residential property ownership and location in many countries, contributing to rising housing costs in areas with better educational resources. This creates challenges in housing affordability and perpetuates inequality in education access. Our study explores the effectiveness of two policies aimed at reducing the association between property ownership and access to premium public education: the "six-year-one-position" policy, which limits school enrolment to one student per property every six years, and the "multi-dicing" policy, which uses a random allocation system for student placement. While this research focuses on Beijing, China, the implications of such policies are of broader relevance to cities worldwide facing similar issues. Using a spatial difference-in-difference approach, we find that eliminating school zoning can decrease housing prices by 2.5% in areas where these policies are implemented, with reductions of 4.4%–7.9% in districts previously associated with high-ranking schools. However, the announcement of these policies triggers short-term price spikes, with increases of 2.7%–4.7%, reflecting a panic-buying effect. Moreover, we observe a spillover effect, where demand shifts from regions that abolished school zones earlier to those that implemented the policy later, as revealed by a staggered difference-in-difference analysis. These findings offer insights for policymakers in other urban contexts where educational access is intertwined with housing markets, highlighting the need for balanced strategies to address both housing affordability and equitable education access.