What Supports High Home Values in Palo Alto
Original post made
by stephen levy, University South,
on Jun 14, 2012
Another title would be "Why do people want to live in Palo Alto".
I believe it is because we have great schools and lots of amenities, many of which are publicly funded.
I think residents agree as they pass school and library bonds, raise money privately for our public schools and value the extra public sector amenities that Palo Alto offers.
Town Square has a series threads questioning the value of money for our public schools and asserting that Palo Alto spends money on frills defined as programs that they don't think necessary.
Are residents stupid to pass parcel taxes and bonds for our schools and raise private money? Are they stupid to value libraries and Children's Theater and other amenities not found in all neighboring communities?
Isn't it reasonable to assume that these investments are a major reason why people want to live here and push housing prices up?
A great community benefits the economy, benefits residents who gladly pay for services and also benefits homeowners who personally don't like all the spending.
Don't you think housing prices would be less if Palo Alto did not have great schools and special amenities?
Like this comment
Posted by Wayne Martin
a resident of Another Palo Alto neighborhood
on Jun 15, 2012 at 8:24 am
Let's look at a little historical data, and some projections based on that data
The data for 1994-2004 is real, taken from on-line sources, for home sales here in Palo Alto. The data from 2005-2025 is projected, based on the real data--
Year| # |Ave. Price |
As a reality check on the projected data, it seems that the median price of a home in Palo Alto has crossed the $2M mark recently:
The projection for 2012 is $1.8M, so the long-term yearly increase in prices based on the 10-year data seems to be good. (Using the rule-of-sevens, prices double every ten years when the yearly rate of increase is 7%. So, the doubling in price is more rapid as the yearly price increase becomes greater than 7%).
What's interesting about the real data is the number of homes actually sold in Palo Alto on a yearly basis. The average is just under 500. Notice that when the economy tanked in 2001, housing sales dropped by half. So, the attractiveness of Palo Alto is definitely linked to the regional economyrather than "the schools".
If this cost increase were to hold for any length of time into the future, home prices are going to be out-of-reach for "young families" that are not holding tens of thousands of shares of some newly IPOed tech company, or some corrupt party boss whose wanted on charges in Beijing, and looking to hide some of his loot in American real estate.
One also has to wonder how many people who can afford to pay $5+M for a home in Palo Alto are going to spend any significant time in a public library, or park? The who fabric of the town must necessarily change, over time, to accommodate the tastes of this class of home buyers.
Like this comment
Posted by Wayne Martin
a resident of Fairmeadow
on Jun 17, 2012 at 6:43 am
> What made the first wave of Chinese pick Cupertino
So when did the first "wave" of Chinese hit the beaches? Let's look at some Census data for that answer:
This percentage of Asians in Cupertino also needs to be seen in terms of a constantly increasing population
Source: US Census
We don't have school enrollment data for Cupertino, but presumably it was increasing with the population and reflected demographic changes in the population.
So, starting around 1980, Cupertino began to grow remarkably, seeing a disproportionate number Asians choosing Cupertino as their home. Presumably these Asians were immigrants, but this level of Census data does not provide that information, unfortunately. It might also be interesting to know the origins of the Chinese immigrants, on a per-decade basis. Immigration from the Chinese mainland was not all that free in the 1970s and 1980s. Presumably the Chinese immigrating in those days were from Taiwan, or other countries with Chinese populations interested in living in the US.
Of course, companies like Apple also chose Cupertino as their home, which provided employees of these companies to think favorably of Cupertino as a place to live and keep the commute time down. (It's not clear that there were any "amenities" in Cupertino in the 1970s when Apple opened its doors.)
It would really help to have immigration information (such as the number of H1B visas that companies like Apple were awarded during those days, but that is out of our grasp, at the moment.
But back to the Schools of Cupertino..
> Don't you think that the Chinese picked Cupertino because
> of its schools?
How would the average person know the answer to such a question? School evaluation is a hundred times more complicated that trying to make any sense out of housing data? The average person only knows a little bit about his own school/school district, and most couldn't name the schools/school districts in the next town over.
As it turns out, I happen to have an interest in these things, because the local media is so poor when it comes to investigative reporting, and the State of California happens to be pretty good about collecting, and releasing school-related data.
I've built many databases over the years, which provide some clues to school performance that suggest that the tax-and-spend claims of certain economists are off-the-mark, where school performance is concerned:
The following data was provided to the PAUSD recently
Six County API vs Cost-to-Educate Data.
One of the most important factors in high student performance happens to be parent education. This relationship is one of the few positive relationships involving the hundreds of "variables" in the data files released by the Education Department that can be established readily.
The following was also provided to the PAUSD recently:
API Scores vs Parent Education For Six-county SF Bay Area School Districts:
Notice how the API scores drop off almost linearly as the years of parent education decreases. Or perhaps it would be better to say: As the years of parent education increases, the standardized test scores for individual students increases so that the API for the school district increases.
We obviously have a Chicken and Egg problem here. Which came firstthe high quality of the Cupertino schools, or the education levels of the Chinese immigrating to the US and choosing Cupertino to live?
Unfortunately, API data only goes back to about 1998, or thereabouts, so trying to do a full analysis on the Cupertino/Chinese immigration question can go no farther without having access to records not generally available to the publicif these records even exist.
The physical appearance of the schools could also be a factor in this choice, but that data is not generally collected. Perhaps someone could provide it, but it's outside the realm of readily available statistical data. There are other, very difficult to characterize issues toofor instance, is Mandarin taught in the schools? How much control of the School Board did the newly arrived Chinese immigrant population acquire? We parents integrated into the education process in Cupertino that could not be found in other school districts?
Difficult to Measure Variables
The following was found on a web-site a Cupertino school web-site a couple of years ago--
We believe a strong partnership between school and home is an essential component of our program and is key to our students' educational success. Students should remain in the program at least through fifth grade in order to gain the full benefit of the program. Parents need to make this long-term commitment and are expected to be active participants in their child's education at school and home.
Parents agree to provide transportation for their child to and from school daily and to arrive on time.
Parents agree to a six-year minimum commitment to the
Two-Way Language Immersion program.
Parents agree to support fundraising activities and direct donations to the program.
The Cupertino Union School District supports the program with teachers, facilities, and the English portion of the program. All aspects of the Mandarin portion of the curriculum must be financed by parent donations and other outside sources. Funds raised, primarily from direct donations by the parents and supporters of the program and educational grants, have financed the Mandarin curriculum development, all Mandarin specific classroom teaching materials (books, posters, workbooks, writing materials) and classroom equipment (PCs and related Mandarin software), instructional aides in the classrooms, and Chinese cultural and enrichment activities.
It is clear that parent commitment is crucial to the educational model being practiced in Cupertino. Something that most educators, as well as people promoting more spending on the public school system have tried to erase from their doctrine, and practice in the creation of the education delivery models in place in most of the schools today.
It also doesn't take much to see that the public schools in Cupertino are being used to create a kind of Chinese enclavewhich has little to do with education in the American sense, and much to do with education in the Chinese sense.
Sofor those who believe that the Chinese are somehow better educated a people, or a culture, and their decisions about education need to be seen as somehow "superior" to those of us who are not Chinese---your beliefs need a reality check.
Like this comment
Posted by OhlonePar
a resident of Duveneck/St. Francis
on Jun 20, 2012 at 3:04 pm
PACT, Come on,
The operative word is "smaller"--baseball, once there's a field available, doesn't take a lot of money. Ergo, you don't need to spend much time raising it. Not everything valuable is readily self-sustaining. To use a business example, the average new drug takes ten years of development with a lot of misteps on the way--but are you willing to say a new, effective cancer treatment isn't worth it? Even though it takes more time and costs more to develop than a new software program?
Palo Alto mom,
I know we often agree on matters and I appreciate your calm approach here, but I do differ with you on this one--I don't see how the city-sponsored activities infringe on the nonparticipants--whereas MI actively does. And while I don't think families move here exclusively for the cultural activities, it *is* a factor. And for a town of 60,000, there's a lot going on--a professional theatre company, local opera, amateur musical and theatre groups and, of course, the wide array of performers who come to Stanford. We also have both a city museum and the Cantor arts center. Can you name me a city of a similar size in the U.S. that has more? I know of several families who choose to live here because there "are things to do." Remember, our housing price premium isn't just school scores--Cupertino's noticeably cheaper.
Yes, misleading--because *AGAIN*--the camps are a small segment of what PACT does. It does not include the kids who are in a school play run by PACT--Ohlone's last PACT play had around 70 participants. It does not include classes. It does not include classes. It does not include the kids performing in the plays. It does not include the Saturday Playhouses.
PACT's ticket sales are in the tens of thousands, but not a *single* ticket sale comes from those camps. Not one. (And, for that matter, people pay for those camps. There's a summer fee as there is for other city activities.)
I mean, your fiscal "analysis" is so off-base that I'm going to have to read all your comments with more skepticism than I previously did.
You also ignore the fact that PACT's current management is actively working to increase participation in its activities and, oh, *succeeding*--750 quite a boost from that earlier 400.
Your comment about the billionaires exemplifies the having your cake, but not having to pay it for attitude that I mentioned earlier. We all benefit from the work done by earlier generations to make Palo Alto a vibrant, culturally rich community--I don't see why we have to run to the rich lords of the Internet to pay for it. This isn't the middle ages and I'm not a serf.
The city could be more efficient, no question, but I don't blame PACT for the Palo Alto process which, IMO, hinders the development of a better tax base. I'm near Edgewood Plaza and we *all* want something there. There even seems to be an agreement on what should go in, but who knows when the hell they'll get something done.
Mr. Levy points out some of the deeper issues--a lot of the complaint about the *relatively minor* (and, yes, in terms of overall costs and budget, they *are* minor) costs of Lucy Stern and the nearby offerings is a clear case of not seeing the forest for the trees. Wiping out PACT, the zoo and the museum would leave us in the same budget fix we're currently in while making our city a noticeably less-interesting and less pleasant place to live. And, once they're gone, they're not that easy to bring back.
Given that there's a Palo Alto premium for housing, we, frankly, need to keep those little "extras" that add to quality-of-life here--because there are *other* good school districts and certainly plenty of housing that costs less elsewhere. Honestly, we need would-be buyers to fall in love just a little bit with our city.
And while there *is* a perception among some that PA schools are somehow a funnel to Stanford, I think that's balanced by those who know their kids will have a better chance of getting into many schools (including the UCs) if they're *not* in this district--i.e. it's a lot easier to be in the top 4 percent of a mediocre school than it is here.
Mr. Levy, in general, people with time to spare and complaints to make *are* going to be the most likely to post here, so it is skewed. People who think everything is fine are doing other things besides posting how great everything is.
As for "special interests"--I think Pat Briggs at PACT did have a cosy relationship with city managment and oversight of PACT did get sloppy. Judge Lucky, though, is an outsider who's just working hard as he can to make a good program. I think this is a program that has made real strides in living up to its mission.
But, in general, the "special interests" in Palo Alto are simply small-town politics. People who grew up here are better connected than people who arrived, oh, 20 years ago. We seem urban and sophisticated, but the city government is more akin to Main Street USA than people might realize. There are people who know people--you want something turned around fast--you use a contractor who knows how to work the city regulations and is known to the city.
The more established and savvy someone is, the easier it is to get things done around here. Ironically, the core of Palo Alto doesn't care much for outsiders. I think it is because so many people are transient.
As a relative outsider, I have mixed feelings about it--it can be frustrating and insular, but I also think it has helped maintain Palo Alto's character.