NAHB: New Data Confirms Low Number of School-Aged Children in Multifamily Building

New Data Confirms Low Number of School-Aged Children in Multifamily

Building new multifamily housing tends to increase local demand for public education, but the real question is by how much. Results published in NAHB’s Multifamily Market Outlook in 2004 showed that there were, at that time, considerably fewer children per unit in multifamily housing compared to the number in single family detached units (click here for report).

Those results were based on the HUD/Census Bureau American Housing Survey (AHS). It’s now possible to revisit this issue and see if the single family/multifamily results can be replicated using a new data source—the American Community Survey (ACS), an ongoing annual survey conducted by the Census Bureau that is designed to replace the long form decennial Census questionnaire. Compared to the AHS, the ACS produces data more frequently (every year instead of every other year) and is based on a much larger sample. The weakness of the ACS is that it contains relatively little information on specific characteristics of multifamily and other types of housing units.

Nevertheless, the ACS contains enough information that it can be used to investigate the number of school-aged children in different categories of housing of units. Results from the most recent ACS data available (2007) are consistent with the AHS results reported in 2004. Per unit, households living in multifamily buildings tend to have fewer children than other types of housing structures, and the number of school-age children tends to be particularly low in larger multifamily structures, and in multifamily condominiums.

The Public Education Budget

Education generally accounts for the largest share of local government budgets. Across all local governments in the U.S., the expenditure on public education is about $433 billion—far more than other major categories such as social services, utilities, public safety, and transportation, etc., according to the 2002 Census of Governments (Figure 1). During the fiscal year 2001 to 2002, local governments in the U.S. spent a little over 1.1 trillion in total, and the largest share is on public education. Among the $433 billion on education, $407 billion is spent on elementary and secondary schools. Even the second largest budget item—social services—only account for $120 billion dollars. In contrast, only $28 billion is spent on housing and community development.

Although residential development has an impact on the demand for public education, it is important to remember that school enrollment can also rise as a result of natural population growth or households with different numbers of school-age children moving into and out of existing units. Moreover, there are many other factors that tend to mitigate the impact of new residential construction on local school system. For one, in most parts of the country, when new households move into an area, school districts typically receive additional state and federal government aid.

Also, some parents choose to send their children to private schools. According to the National Center for Education Statistics (NCES), there are about 11% children enrolled in private elementary and secondary schools nationally in 2005, and this percentage is projected to be quite stable in 2006 and 2007 as well. Since local governments rarely subsidize private schools, this tends to further reduce public school expenses, although the extent to which that occurs varies from place to place. There were about 2.2% school-age children receiving home schooling in 2003 according to the NCES statistics.

Finally, if there is excess capacity in the school system or economies of scale exist, cost per pupil goes down as enrollment rises.

Fewer Children in Multifamily

As shown by the 2007 ACS, there are 50.9 school-age children (age 5 to 18) for every 100 households in the U.S., illustrated in Table 1. However, the average number of school-age children varies substantially across structure types.

As illustrated in Figure 2, there are 32.6 school-age children per 100 households in multifamily structures, compared to 58.8 in single family detached homes, 42.9 in single family attached homes, and 50.2 in manufactured housing units. A traditional explanation for the differences is that families with children have a preference toward homes with back yards that the children can play in.

Within the category of multifamily housing, larger apartment buildings tend to have fewer number of school-age children on average than small, garden-style apartments. There are about 43.1 school-age children per 100 households in structures with 2 to 4 units, compared to 33.1 in multifamily structures with 5 to 19 units, and 20.8 in 20+ unit structures.

Renters Compared to Owners

Within a given structure type, renters have more children than owners, but the magnitude of the difference varies by structure type (Figure 3). In multifamily buildings with 2 to 4 units, there are 45.1 school-age children per 100 renter households and only 34.9 per 100 owner households. In multifamily buildings with 5 to 19 units, these numbers become 35.4 per 100 renter households versus 14.3 per 100 owner households. Fewer numbers of school-age children exist in 20+ unit multifamily buildings. A similar pattern is observed in other structure types such as single family detached, single family attached and manufactured housing.

As noted above, there tends to be fewer children per household in larger apartment buildings. If this is combined with the effect of ownership status, it produces an even larger spread between 45 children per 100 renters in 2 to 4 unit multifamily buildings and fewer than 11 per 100 owners of condos in 20+ unit buildings.

Recent Movers

In multifamily structures, households who stay put tend to have more school-age children than households that have moved in recently (Figures 4 and 5). This is not generally true for other structure types, however. Recent movers into single-family detached homes have, on average, 67.9 school-age children, which is much larger than 57.9 per 100 non-movers in single family detached homes.

In Table 1, the highest number of children per 100 households is 90.8, and this is for households who have recently moved into newly constructed single-family detached rental units. The lowest number is 3.2 for newly constructed 20+ unit condominiums. .

Conclusion

On average, there are fewer school-age children in multifamily structures than in other residential structure types. There are even fewer in particular types of multifamily structures—such as condos, or buildings with more than 20 units. Therefore, when local governments make plans for new residential development, it is important that they take these factors into consideration when estimating the impact on their education budgets.

To get a complete picture of the budgetary impacts, local governments should also take the benefits of new construction—including income and jobs for local residents, as well as increased taxes and other forms of government revenue—into account. Estimates of these local economic benefits for general multifamily housing in a typical metropolitan area were last published in the October 2005 issue of Multifamily Market Outlook. Estimates of the benefits of tax-credit multifamily development were last published in the October 2007 issue.