At the end of March, the Illinois senate voted to lift the residency requirement for Chicago Public School teachers. Formerly, teachers and other school employees who worked in the CPS system also had to own Chicago real estate within the city limits unless granted a waiver by the Board of Education. Similarly, all other city employees have had a residency rule since 1919.
Mayor Daley has blasted the decision, which now goes to be voted on in the Illinois House. The Mayor cited the downtown areas of Detroit and St. Louis as negative examples of what can happen when a city lets its municipal workforce live in the suburbs.
Pros of the Decision
Although Chicago school officials and the city’s mayor are against the idea, there are reasons to let Chicago teachers live in the suburbs, especially during these economic times. Proponents of the decision think that allowing teachers to commute to their CPS job will increase applications for teaching positions and draw better candidates to the job. With many teachers near retirement, broadening the employment pool now is a priority.
Likewise, the CPS system is striving to bring the highest quality of instruction to its schools. By enacting a more flexible residency rule, proponents of the decision are hoping to enhance the quality of teaching candidates and keep promising young teachers in the system.
Another consideration is recession-caused circumstances affecting CPS staff. Teachers’ spouses could be losing their jobs in this economy, making the cost of living in Chicago a burden. During the recession, teachers might want to move to areas with lower costs of living or might want to move in with family in the suburbs. As of now, they are prohibited from doing so. Letting CPS employees live outside the city could keep them in their jobs during the recession.
Cons of the Decision
Alternately, the decision could be a drain on downtown Chicago. Like Detroit and St. Louis, instead of creating a better community through better teachers and education, lifting the residency requirement could attract teachers who aren’t invested in the schools’ communities since they don’t live in them. The residency requirement was created to ensure that teachers and other government employees were knowledgeable about and personally invested in the community they worked in. Without living in the community themselves, they might be less connected to their pupils and less prepared and dedicated to educate them.
Historically, cities that have allowed their government employees to live in the suburbs have seen a large migration of the middle class out of urban areas. Not only could this affect the quality of instruction in schools, but it could also diminish the tax base available to the city government. With fewer residents paying property taxes, local governments have less funding for their schools, weakening the school system as a whole. If teachers and other government employees don’t elect to live in the communities where they work,
Effects on the Chicago Real Estate Market
Obviously, the performance of public school systems and property values are closely related. The primary effect that could be negative for home values in Chicago is any change in the school system that would make schools less desirable to attend. Poorly performing school systems obviously lower the overall home values in that area.
A lack of good public schools could also deflect potential buyers with children. Without good public schools, buyers have to add private school tuition to a home’s price tag. While the intention of lifting the residency rule is to make schools and their instructors better, if the overall effect is negative, it will be bad for real estate values.
Similarly, if this decision keeps middle class citizens from moving to urban areas of Chicago in favor of the suburbs as Mayor Daley thinks it will, sellers might face a problem finding buyers. According to recent trend reports, the largest groups of buyers now are first time buyers and buyers of entry level homes priced toward the lower end of the market. The median sale price of homes in Chicago in 2010 has been around $250,000.
Without people moving to the city to take new teaching jobs and other government employment, sellers who can’t find buyers in the city might find themselves in foreclosure or short selling. More distressed homes in the market won’t help selling prices or home values, as we’ve discovered in the past two years.
Of course, proponents and detractors of the residency rule both have the well-being of Chicago on their mind. Make sure to keep an eye on developments regarding the decision as it progresses through the state House.
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