Schools’ trouble may hit housing

Dionna Baylor could benefit and suffer from the Clayton County school system’s loss of accreditation.

Her employer buys “ugly houses” to rent and eventually sell to out-of-state investors. The accreditation loss might make houses even cheaper, Baylor said.

But her son, Derrick, is a freshman at North Clayton High School, so last week’s decision by the Southern Association of Colleges and Schools is upsetting. The accreditation loss could make it harder for Clayton students to get into their preferred colleges and obtain financial aid.

“It may help business, but, all in all, it’s not better for the community,” Baylor said. “And at the end of the day it’s all about what’s better for the community.”

The decision against the 50,000-student system could further injure Clayton’s bruised real estate market and change the look of the county for years to come.

More single-family detached homes might become rental properties owned by investors who live elsewhere. Already, 40 percent of those dwellings are rented, according to David Barton, vice president of governmental affairs for the Metro South Association of Realtors.

Too many rental properties is damaging, University of Georgia demographer Doug Bachtel said.

“There’s a real loss of community because those people are transitory,” Bachtel said. “They’re really not going to get involved in community affairs. Voter participation could decrease.”

If educated professionals leave in “bright flight” for better schools, economic development could suffer.

“Generally, what you have left are schools filled with kids who can’t get out,” said Abel Bartley, a history professor at Clemson University who studied the 1964 accreditation loss in Duval County, Fla. “When you have a school system with those types of kids, investment doesn’t go there.”

Bachtel added educated parents are “the ones who volunteer for the PTA and the chamber of commerce. The people left behind are just wondering where the next tank of gas is coming from.”

Clayton’s real estate market has been reeling for a while, so whether the accreditation loss will cause further harm remains to be seen.

About 30 percent of residential and commercial properties in Clayton have lost value since last year, while only 17 percent have increased, the county says.

Trans Union credit reporting agency reported that in May Clayton had the highest delinquency rate for mortgages out of 11 counties in the metro area.

Equity Depot, a local company that tracks foreclosures, says Clayton has had as many foreclosure notices as Cobb County since the beginning of 2007 —- and Cobb is more than twice as large.

Clayton’s home sales declined nearly 15 percent from 2006 to 2007 and the median resale price dropped almost 12 percent, according to SmartNumbers, a real estate research firm. Houses that Baylor’s employer buys cost as little as $25,000.

The school system has struggled to perform better and some of its elected leaders have been accused of acting improperly. Gov. Sonny Perdue removed four school board members last week who were found to have violated the state Open Meetings Act and the state code of ethics.

“You would think people have adjusted their expectations to a certain level already,” said Velma Zahirovic-Herbert, assistant professor of housing and consumer economics at the University of Georgia.

A study done in North Carolina found that “local house prices did not decline for local schools labeled ‘low-performing’ … suggesting that residents already knew that these schools were low-performing,” Zahirovic-Herbert wrote in a research summary.

Zahirovic-Herbert looked at how a low-performing school system in Louisiana affected real estate there and concluded prices didn’t necessarily sink but houses stayed on the market longer.

A third study, done in Florida, found that a favorable report card on a school could boost home prices 10 percent or more.

Clayton school officials said the accreditation loss will be appealed. The system will have to show that the accrediting association was wrong and that the nine mandates required by the accrediting agency have been met.

If the appeal ruling is favorable, accreditation would be restored back to Sept. 1, 2008. If the appeal fails, the school system would have to start the accreditation process from the beginning, which likely would take about three years.

Barton, who has three young children in Clayton schools, said the Realtors association is trying to make sure agents know the facts.

“The perception is what hurts this real estate market, not the reality,” he said.

With Clayton’s low prices, families can buy a big home and still have money to send their children to private schools, Barton said.

Baylor said she’s waiting to learn more about the situation before deciding whether to move her family out of their apartment.

“It’s so fresh, it hasn’t settled in,” she said. “But I’m not going to wait too long.”