City Responds to Ongoing New Apartments/Student Enrollment Concerns
Decatur Metro | October 12, 2015 | 12:28 pmIn the October issue of the Decatur Focus, the city responds to two key concerns that have popped up around here for many, many, many years. Namely, “Apartment developments will be flooded with school-aged children.” and “Apartment developments will cost the school system money.”
So let’s get right to it…
Using existing enrollment numbers and the local tax revenue generated by downtown multi-family buildings, it was shown that these developments created a healthy, positive net income for the school system. For example, property taxes paid on a $700,000 single-family home generally provide enough school tax revenue to cover the local cost of educating one student. The local cost of educating more than one child from a $700,000 home or from homes valued below $700,000 must be covered by other taxpayers. Commercial and multi-family developments, as well as empty nesters and senior citizen homeowners, provide the needed school tax revenue to make up this loss. Here are a few other issues that are frequently topics of conversation:
“Apartment developments will be flooded with school-aged children.”
The primary market for these dwellings is singles and young professionals. These projects fill a gap in Decatur’s housing market by providing a new, urban rental housing option for those looking for the flexibility and freedom from maintenance that rental housing provides. The city has worked closely with the school system’s enrollment consultant to provide information on these anticipated developments so that enrollment effects could be incorporated into estimates of the school system’s growth and expansion plans.
Many assume that these new developments will exceed the school system’s projections but it is important to consider the size of the units in the projects. Of the 624 units currently being built, approximately 69 percent (430) are efficiencies or one-bedroom units. The likelihood of any of these units being inhabited by more than one person is extremely unlikely. The remaining 194 units consist of approximately 30 percent two-bedroom units and only 2 percent three-bedroom units. Using the enrollment consultant’s estimate for potential students from residential apartments, these units would represent an enrollment growth of approximately 27 students. Even if all of the efficiency and one-bedroom units were included, the estimated number of students would be 87.
“Apartment developments will cost the school system money.”
Unlike owner-occupied condominium developments, apartment developments do not qualify for homestead exemptions and are taxed at their full assessed value. The projected local property tax revenue for City Schools of Decatur from the three downtown apartment buildings under construction (Place on Ponce, the Alexan and the Arlo), will be about $715,000 per year. With an estimate of $7,000 in local tax revenue needed to educate one student per year, these three developments will provide local property taxes that cover the costs for 102 students.
- Using a high-end estimate of potential enrollment of 87 students, the school system will receive at least $105,000 annually to cover costs for other students.
- Using a mid-range estimate of potential enrollment of 57 students, the school system will receive at least $315,000 annually to cover costs for other students.
- Using a low-end estimate of potential enrollment of 27 students, the school system will receive at least $525,000 annually to cover costs for other students.
Rendering courtesy of ColeJenest & Stone
Thanks for posting this. However, I’m not sure it’ll tamp down debate on the issue. It seems like there’s a set of Decatur residents that will never believe the city’s estimates on enrollment impact from these developments. No matter how many times numbers are analyzed, re-analyzed, dissected and discussed, there always seems to be a few people who think parents will be shoving 3 kids in a closet in order to make sure they get into Decatur schools.
The amazingly striking thing about all the comments is: all the comments. As a candidate for the City of Decatur’s only city wide elected general government office, I cannot draw anything from all these comments other than the Decatur Planning Commission and the Decatur City Commission have completely failed to provide a planning impact analysis that has the confidence of Decatur’s residents. Decatur needs leadership that is competent, trustworthy, and not for sale to for profit special interests. Until we have this kind of leadership which we deserve, we will continue to be buffeted with point counterpoint banter. I again call on The Decatur City Commission to invoke an immediate moratorium on new high density development until we can honestly, calmly, and wisely determine the relevant facts and develop a trustable and respectable impact analysis – and then, and only then, start to make tactical decisions about development based on a long term vision of where we as a city want to want to go. To do this, the Decatur City Commission must have serious full time leadership who understands that leadership is not to be found in 20 and 30 year old strategic plan documents written by committee but rather informed and experienced elected leaders with a healthy vision of Decatur’s future and concrete proposals for how to get there.
“Decatur needs leadership that is competent, trustworthy, and not for sale to for profit special interests.”
Are you alleging someone was bribed or gained financially for approving certain developments? That’s a bold statement. Please elaborate.
To me, it seems like the city is doing the analysis and showing their work. The emotional fear-mongering is coming from other places…
Agree Rival. Mr. Ridley makes it sound as if we have a crisis in planning and leadership – at both the staff and commission level. Is Mr. Ridley implying that the crisis is not only in competency – that is, our staff and elected officials are in over their head – but also the crisis extends to questions about legal and moral issues? Is that what Mr. Ridley is saying? If so, that absolutely does not jibe with my perception on how things are happening at city hall.
I personally believe, after working with cities all over Georgia on a daily basis, that ours are some of the most competent staff and commission members anywhere in the state. I also know that Decatur is the envy of cities throughout the southeast. Our staff and commissions win awards, host others seeking “best practices,” and are recognized as being forward-thinking and on top of things. That is how we are perceived from the outside. It also is how I’ve generally perceived our city for the many years I’ve lived here. Under the current regime at city hall we have, by almost all “typical” measures, been successful. What am I, and the rest of the state, missing?
Mr. Ridley – am I making the wrong inferences about your statements?
“…the Decatur City Commission must have serious full time leadership who understands that leadership is not to be found in 20 and 30 year old strategic plan documents written by committee…”
It’s worth noting that Decatur may have begun its legacy of planning 30+ years ago but the city’s present strategic policy decisions are rooted in the 2010 Strategic Plan, a ten-year plan completed just five years ago that we as a city are currently half way through implementing.
Last night’s forum had multiple references by a number of candidates along the lines of “it’s time we start planning,” as though planning is some alien endeavor that no one’s thought to consider before. Given that Decatur’s legacy of engaged citizen planning and subsequent follow-through by elected officials exceeds that of pretty much every municipality in the Atlanta metro and beyond, there’s no shortage of irony in such statements. Where were these folks in 2010 when 1000+ residents and business owners committed up to 8 hours each to create the very plan some of our current candidates are apparently unfamiliar with? Or, in case they were busy that year, where were they in 2000? Because it was done then too.
Perhaps the issue is one of disagreeing with our present plans and priorities and, if so, that’s fine. In fact, it’s great. Because that’d make for a valuable and substantive discussion of differences. But to suggest we’re operating in the absence of plans is, frankly, insulting to the thousands of Decatur residents who have made it a priority to contribute to such efforts.
+1000
I think the worry is that someone with 3 kids will rent a 1 bedroom, for example, for the COD address, but not actually live there. Thus, the estimates of how many children would or would not come with a small apartment can be significantly off. It’s much cheaper to pay the rent on that apartment than to have paid tuition at COD (no longer an option, but in the past) or a private school for 3 kids.
Well, these one bedrooms are / will be running around $1,300 a month. If someone from outside the city added that amount to whatever they’re presently paying for a mortgage, they could buy a house pretty much anywhere they wanted their kids to go to school.
I agree that when you can get a small, cheap apartment for $500 or so in a place with desirable schools, it’s ripe for abuse. But once you’re over a thousand a month, you’re in a zone where people have a lot more, totally legit options.
An action such as this would, of course, be illegal.
Well – “rent a 1 bedroom, for example, for the COD address, but not actually live there” would actually be illegal. Kids are supposed to attend schools in the districts in which they actually live. I don’t think it would be wise to change the current development policies based on an illegal hypothetical. Since this hypothetical is illegal, there are ways to prevent it from happening.
NOTE: Given this comment on the school tax potential needs, the Development folks think ” as well as empty nesters and senior citizen homeowners” should foot the extra bill? Really when these folks should now begin to have their tax base reduced to keep seniors in the city. We have lost the majority of the African American community, so now the target is on the back of seniors.
School Board & City Commission – It is time to reduce the taxes of seniors period, not count on these folks to continue paying for schools.
I don’t understand why seniors should get a tax break based on age. In this country, the age group with the highest net worth are 65-74 year olds:
http://www.demos.org/blog/9/8/14/wealth-distributed-extremely-unevenly-within-every-age-group
And, if they paid their bills on-time, they should be living mortgage free at this age (or close to it). In addition, most of them probably aren’t responsible for kids, so they don’t have extra mouths to feed and clothe. Of course, this doesn’t apply to all, and there certainly should be adjustments based on net worth (not income), but not by age.
I think it should be both–age AND income. Someone who is age 25 and low income needs a tax break. But someone age 85 and low to middle income REALLY needs a tax break, and a bigger one, because there is no more chance of increasing income and prices inevitably go up.
The 65-74 age group may have the greatest net worth, but they also have to fund their existance for the next 10 to 30 years with potentially no income other than Social Security. I’ve run many projections and that money doesn’t last all that long.
Baby boomers benefitted from senior citizens subsidizing education. But now that the boomers are seniors, the idea is totally unreasonable . . .
Thanks DM and DF.
“$700,000 to educate one child”.
Am I the only one who finds this hard to believe? And if it is true, shouldn’t we have a discussion about reducing this amount with vouchers, home schooling or early high school graduation?
Huh? I think you mean $7,000, right? Anyway, I’m not surprised by this figure. Since I guestimate that CSD spends around $14,000 a year, that would mean $7,000 from the state and $7,000 from local revenues. There’s hardly a new car that you could get for $14,000–surely a year of a child’s education is worth that. (And they last longer and depreciate less quickly! 🙂 ) The Georgia average is around $12,000 total per student per year. Where I grew up, they now spend over $30,000 per student per year. Granted the cost of living is higher overall but it’s not like Georgia is known for its extravagant spending on education!
Thanks AH. My bad.
Not exactly what it says. Rather, it’s “property taxes paid on a $700,000 single-family home generally provide enough school tax revenue to cover the local cost of educating one student.”
Still, it is pretty incredible. Annual property taxes on a $700k home are about $15k, I am guessing? It’s a lot of money. And note that the article says that covers only the “local” cost, which I suppose refers to the portion of costs not covered by Uncle Sam.
And all this dough is before you all pump another $70 million of borrowed money into more construction.
How on earth did anybody get a proper education back in 2005 when you couldn’t spend $700k on a house in Decatur if you wanted to?
The balance of households with kids to households without kids was different. There were lots of households without kids subsidizing those with.
Actually, the school tax on a $700k home is under $7,000. The millage rate is applied to one-half of the assessed value, less any exemptions. Here is the typical math: A house assessed at $700K will be taxed on 50% of that assessment, or $350K. A $10,000 exemption is applied to almost every such house (a little more for seniors), giving a basis of $340K for applying the millage rate. Last year’s rate was 20.5, but this year’s has been reported as something under 20. Using a high estimate of 20 mils gives school taxes of $6,800, which is near to the local level of per-child funding. So, saying that the taxes on a $700K house pay for the education of one child is pretty close to what the math supports.
That read the taxes on a $700,000 home would educate the child not $700,000 to educate the child.
It’s not just a money issue but a space issue. If the space doesn’t keep up with enrollment, however lucrative it proves or doesn’t prove to be revenue wise, then the schools will be crowded. And it always takes a while to plan, finance, get voter approval for, and build new buildings. More high density developments may be worth it but the benefit isn’t instantaneous and schools can be crowded in the transition. A transition of 4 years can seem like nothing to someone age 50, but it’s all of elementary school (K-3) in CSD. I’ve never been categorically against high density in City of Decatur, especially Downtown, but always surprised that people don’t see that it can have negative consequences for the school system if there isn’t adequate school planning, funding, and construction to go along with it.
If the number of units is correct there will be approximately 200 units with 2 or 3 bedrooms. An increase of 27 students seems a bit understated. Even 87 seems low. The rent on a 2 bedroom at $2000 would seem reasonable if you want to enroll 2 children in the CSD.
I keep wondering if the number-crunchers are underestimating parental motivation and diversity of expectations (specifically, concept of space). There are many parents who believe the most important thing they can do for their children is to give them the best education they can possibly afford, and who are willing to get creative to make that happen.
The Atlanta area is chock-full of transplants (not just from different cities but different countries and cultures with various concepts of space and thrift). What may seem unbearably small to some is quite workable to others, in particular once you weigh in the baked-in perks: great schools, walkability, restaurants, nearby hospitals/jobs, public library, public transport, weather that makes the outdoors available year-round (and the relative safety to use this space). Let’s not forget Marie Kondo’s popularity…
Here’s an article on living small in the big city: http://nymag.com/thecut/2015/07/4-people-650-square-feet-a-love-story.html The comments show both sides of the argument: the ones who say “wait until puberty hits/you will have to move!” and the ones who can’t understand what the fuss is all about.
If people moving to Decatur didn’t mind living in small spaces, why are so many small homes being torn down and being replaced by large houses?
Different folks. There’s definitely two different groups moving in–the folks who can pay $750,000 to $900,000 for a huge new you-know-what. And the folks who are desperate for CSD schools and are willing to cram themselves into something inside COD somehow.
Indeed. Some folks can afford the big and pricey house. I’ve heard it said more than once that “the house is more expensive, but look at what you are saving in private school tuition. And the house keeps appreciating.” Why not have both, if you can afford it? Some folks can.
But not everyone can swing that. My question is whether long-term, those studio/1-2 bedroom units turn out to be a school attendance growth sector that was not accounted for simply because the scenario runs counter to the planners’ personal preferences and experiences. The families (in my scenario) who would be willing to live in small spaces are folks who could not afford private school or pretty much any house in Decatur (rental or not). If these folks were previously unable to move to Decatur because of a lack of available small apartments, that barrier is now being lifted somewhat. Even if these families move away later in search of a bigger home, the little babies/toddlers could impact the early childhood programs, no?
Living small can translate into significant savings. That money can go to the things one values and has decided to prioritize: paying off student loans asap, starting a family sooner, doing what one loves vs. chasing the paycheck a bigger house would require, being able to afford to be a stay-home parent… This may be a type of diversity (of thought, of lifestyle) that Decatur has not planned for because it’s not as common here as it is in other places like NYC, San Francisco, Europe (and plenty other places where people are used to living with a lot less space, stuff and income that is considered “normal” for this area). Maybe it will remain uncommon.
“And the folks who are desperate for CSD schools and are willing to cram themselves into something inside COD somehow.”
I think such folks are more likely to choose N.Fulton or N. Gwinnett rather than cram into an apartment. But I guess time will tell. Regardless, the revenue is needed–even if it means some extra students–to offset the exodus of childless folks in single family homes and subsequent turnover to families with young children. Without it single-family homeowners will have to pay a larger share of the tax burden.
FWIW, when we sold our 2br 2ba condo in Decatur this summer, 6 potential buyers looked at it and none-as best as our realtor could determine-had kids.
To put this potential growth in perspective, according to my realtor neighbor, in the last 12 months there were almost 500 residential home sales in Decatur. A majority are single family homes, though that number includes condos and townhomes.
I bet most of those sales will be long-term contributors to 2.2 children each to the city population. Home sales (and I’m guessing significant renovations) are likely still the largest contributor/predictor to/of annual enrollment growth. I hope their models for enrollment projections (assuming they exist) use sales data and building permits and property types as “inputs” to any such growth model.
The Dectaur Focus provides information based on utilization of the word currently, as in –
“Many assume that these new developments will exceed the school system’s projections but it is important to consider the size of the units in the projects. Of the 624 units currently being built, approximately 69 percent (430) are efficiencies or one-bedroom units. The likelihood of any of these units being inhabited by more than one person is extremely unlikely.”
———————–
What about the 849 other apartments from the developments starting next year?
“But two even larger mixed-use complexes get going next year, meaning that in the next four or five years 1,473 new apartments will come online along with 35 more town homes.” AJC , Aug 8, 2015
Why is the data presented for 624 units as opposed to 1,473 new apartments?
What is the % of 2 and 3 bedroom apartments in the 849 apartments starting next year?
The additional units you reference are in various stages of planning by their respective development teams but none have formally submitted plans or received approvals from the city. They’re speculative until that point.
How are the projections of CSD enrollment provided by Decatur Focus not speculative if it is not based on the entire # of apartments, as opposed to a fraction, with the remaining composition of the majority of units-currently-unknown?
King Tommen is correct in his observation of the city commissioners as it relates to Callaway. In fact, I thought JC (first comment) was alluding to the commissioners when I first read the comment.
Apples and oranges. Of course projections are speculative. I’m saying I’m assuming pending projects are not in the present numbers because they’re not officially underway from a permitting standpoint.
Once they are, we should be at a point where we have some real numbers on the current three, which will allow the city and schools to fine-tune the projection metrics for the next round for even an more accurate forecast.
Both are now really close though, as I understand it.
Didn’t the city commission just tell the people behind the Calloway plan to “try again” because it was residential-heavy and they worried about the impact to schools? If the city commission is doubting these numbers, why shouldn’t residents? If these residential-intensive projects are such a boon for the schools, why were commissioners put off by the proposal?
“The possible impact on the schools is even worse than we anticipated,” Commissioner and Mayor Pro Tem Kecia Cunningham said.”
http://www.decaturish.com/2015/08/decatur-city-commission-balks-at-plans-for-callaway-building/
Well of course there is going to be some percentage of kids, and the more apartments the higher the total number. The commission wanted a more balanced project, obviously.
In an ideal scenario, I’m sure the Commission (and others) would prefer 100 percent office/retail, but that’s not realistic. If fact, the market for retail is probably about maxed out in Decatur, and office space has always been a tough sell. In hindsight, perhaps the better move would have been to turn this property into a school. Probably the best option for the commission now, though, is to push for a high percentage of studio and one bedrooms to minimize the impact on schools.
It is interesting that we are having the conversation about potential apartment freeloaders and/or apartments bringing in too many students at the same time we are having a general community conversation about the decreasing diversity of Decatur and how many families are being priced out of the community.
Personally, I don’t think there is a large number of people out there scheming of ways to somehow cheat the system that they could otherwise afford – if you can afford a nice house in unincorporated DeKalb and an apartment in Decatur, you can likely afford a house in Decatur. Given the complications of trying to make the multiple residence strategy work, 99%+ of people will simply buy the house in Decatur and move on. If there are suddenly tons of students coming from one apartment complex in excess of projections or historical experience, I imagine the school system will take a closer look at the eligibility of those kids.
On the other hand, if someone can no longer afford a home in Decatur, but instead chooses to rent an apartment (of whatever size) because they prioritize education and want their children to get the best education they can, those are exactly the sort of people I think we would want in our school system. Having residential options other than single family homes is a way to address some of the concerns about decreasing diversity in the schools and the community at large, and we should be open to making sure our community is accessible to those of all income levels, not just those who can afford an (increasingly) expensive single family home.
Regardless, the question of needing additional space in our schools will not go away, even if we stopped construction on the apartments currently being built and tore down every single existing condo and apartment building. Growth is being driven primarily by the turnover of single family homes from couples without children in the school system to couples with children in the school system. As a community, we need to decide how to address that issue, whether through the bond (which I personally support, especially given current borrowing costs), by starting to impose very large impact fees on developers doing teardowns and infill construction (which would certainly slow turnover, but would increase the price of homes even more and would not provide the certainty of funding the bond would), or by agreeing as a city that we will accept a significant and substantial degradation of the quality of our schools because we are not willing to provide sufficient funding for them (which would be approaching killing the goose with the golden eggs).
Insightful comments, though I believe there will be a few more ‘bad actors’ than we think; moral hazard aside, it makes economic sense for someone with 2 + kids to potentially game the system.
Not sure if folks have seen it, but here is a link to get more information on the proposed GO Bond. Check it out, provides nice detail on enrollment projections, costs and other good information on the issue.
goyesdecatur.org
“moral hazard aside, it makes economic sense for someone with 2 + kids to potentially game the system.”
It’s more than moral hazard. Gaming the system in this manner is a felony, something CSD should make very clear in its enrollment process. And if it truly is a problem (which I’m skeptical of, as rents are very high in these complexes and will see annual increases), CSD should put some resources into investigation.
And CSD is proposing to hire an additional, full-time enrollment investigator to look into exactly these sorts of situations. Ironically, that proposal is being condemned as a sign of administrative bloat by many. If illegal enrollment is an issue, the investigator pays for themselves; if it’s not (as I personally suspect), I am at a loss for what else CSD can do to assuage fears about illegal enrollment.
A projection of 87 students does not seem plausible. Does that take into account the single family homeowners who no longer want to live in their homes? Now is a prime opportunity for empty nesters to sell their homes and move into apartments/condos. They can make a ton of money off the sale of their house and still live in Decatur without all the upkeep of a home. Meanwhile, more families with children move in (which is great), and we continue to tax a school system that is already busting at the seams.
As I understand the current apartment-based student projections, the numbers provided are based on historical experience (both long-term and short-term) with the number of students that CSD sees from apartments each year. While there may be second or third order consequences, those are generally impossible to predict – a greater supply of rental apartments (which is what is currently being built) leading to a number of long-time Decatur residents choosing to sell their (likely paid for) homes to move to an apartment downtown (for which they would have to pay a monthly rent, likely in excess of current or forecasted property taxes) is not something any planning department anywhere can estimate with any level of certainty.
In any event, the underlying issue is not the apartments, it is the turnover of existing single family housing stock from families without children in the schools to families with children in schools. I don’t think a moratorium on apartments would have any significant impact on that turnover, and I would much rather have a conversation of growth, assuming we need to have one, on that turnover and how to slow it/deal with its consequences as opposed to the red herring of new apartments, which historically have had a marginal impact on student numbers.
Hope some of you will attend the community forum tomorrow, which addresses upcoming legislation, including the school bond request as well as annexation and new cities and changes to the DeKalb board of ethics.
Confirmed guests include Scott Drake, Garrett Goebel, Pat Killingsworth, Howard Mosby, and Elena Parent.
Wednesday, October 14 at 7:00 p.m.
North Decatur Presbyterian Church
611 Medlock Road, Decatur
With all of the money coming into the school system why have the COD teachers not seen a raise in over 5 years?
http://www.decaturish.com/2015/10/whats-it-to-utz-bond-vote-one-of-the-most-important-in-recent-memory/