In 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