Affordable housing is an elusive concept. Money writers, myself included, have a bad habit of separating out individual life choices and analyzing them, as if they happen in isolation. Take, for instance, my recent series detailing the number of counties in America where average incomes can’t support average-priced homes. I did the best I could, and came up with some standards and average benchmarks, and examined data using them. But in truth, life doesn’t work that way.
In real life, buying a home you can reasonably afford involves a complex series of variables that are very hard (impossible) to cram into a formula. How stable is your employment? What are your prospects for regular raises? How much can the grandparents help with child care? It’s smart to overpay for a home if Nana can watch the kids for free, for example.
Perhaps the most significant, and least understood, “soft” variable in home affordability is education cost. As I peruse the thousands of family budgets that readers have generously sent to me as part of The Restless Project (send yours to Bob at BobSullivan.net!), one fact leaps out: The clearest indicator of struggling versus getting by is whether a family feels like it has to pay for private school for the kids. That $15,000 to $45,000 extra annual cost is a budget killer. The only thing worse for many parents is the fear of sending their kids to an inadequate public school.
This leaves many parents lying awake at night in dread, faced with a Hobson’s choice between their kids’ future and their financial future. And this is why smart observers argue that the quickest way to solve America’s affordability problem is to solve America’s education problem.
In the meantime, a smart financial decision for families is to move to a place where the public schools are good. Sounds obvious enough. And that’s the problem. Everyone knows this, which means there’s stiff competition (i.e., higher prices) for homes near good schools.
Good schools, affordable homes, but no jobs
Already, you can see how complicated this calculus has become, but real life also includes another variable: Find a good school district in a place with affordable homes, and you’ve probably found a rural area where there aren’t many jobs. Hey, this stuff is complicated.
The data-rich folks at RealtyTrac, who have been working with me on several Restless Project stories, have taken a whack at this problem and come up with fascinating results. Below is a list of top ZIP codes where there is a good public elementary school, homes are affordable, and unemployment is low. If you are a young family just starting out, it would be a good idea to visit a few of these places.Before you look at the list, understand that this is another imperfect data analysis that rests on a series of presumptions. To qualify: Schools had test scores that were at least one-third higher than their state’s average. The intra-state standard means a better school in a state where education is better overall could be penalized. And of course, school scoring is fraught with peril anyway.
The unemployment rate criteria is simpler: 5.9 percent or lower. And affordability means home payments (using the formula we used last time) are 33 percent of income or lower.
Here’s the good news: There are plenty of places with good schools, jobs and affordable homes. Of the 7,500 ZIP codes examined by RealtyTrac, 489 fit the bill. They are spread around the country, too, so Americans do have options.
They tend to be on the small side: nearly 300 of them have populations under 30,000. But big places aren’t excluded. Staten Island, N.Y., made the list; so did Phoenix, Portland, Ore., and West Chicago. The list is peppered with ZIP codes in Colorado, North Carolina and Florida. And when we start to talk about the most affordable places, well, the list is self-explanatory.
A few more facts, before the list:
- Cities with the highest amount of affordable ZIP codes with good schools were led by Orlando, Fla., (nine); Raleigh, N.C. (eight); and Phoenix (six), followed by five cities each with five affordable ZIP codes with good schools: Chandler, Ariz.; Colorado Springs, Colo.; Grand Rapids, Mich.; Lexington, Ky.; and Wilmington, N.C.
- States with the most affordable ZIP codes with good schools were New York (105), North Carolina (66), Florida (62), Illinois (50), and Michigan (40).
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