Does School District and Municipality Border Congruence Matter? A Spatial Hedonic Approach

Research on zoning typically assumes city planners aim to maximize housing prices with their land use decisions, either explicitly for public choice reasons or implicitly through the approval of land uses that create local net benefits. Noncongruence of school district and municipality borders severs the link between costs and benefits in the eyes of the median voter, however, which could result in excessive residential development and fiscal externalities that lowers property values. This paper uses a hedonic approach to indirectly observe the presence of these externalities. Border congruency between school districts and municipalities in Ohio is measured using GIS data and matched with a data set of 56,717 home sales. The hedonic results indicate that noncongruence is associated with lower housing prices, while the degree of noncongruence is positively related. For most school districts, the negative effect of noncongruency dominates. My results are robust and consistent across different model specifications and empirical approaches.