School Desegregation and Urban Change: Evidence from City Boundaries

Abstract

I examine changes in the city-suburban housing price gap in metropolitan areas with and without court-ordered desegregation plans over the 1970s, narrowing my comparison to housing units on opposite sides of district boundaries. The desegregation of public schools in central cities reduced the demand for urban residence, leading urban housing prices and rents to decline by six percent relative to neighboring suburbs. The aversion to integration was due both to changes in peer composition and to student reassignment to non-neighborhood schools. The associated reduction in the urban tax base imposed a fiscal externality on remaining urban residents.